A Roundup of M&A Strategies for Success: Part 1

Top 5 principles for merger and acquisition decision-making, from brand architecture to cultural considerations

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With more than half of consumers planning to return to their local branch once things normalize post-pandemic, it’s more important than ever for financial institutions to find ways now to maximize the branch banking channel and seek additional growth opportunities for the future. No other touchpoint empowers bankers to deepen relationships with customers quite like the branch. But critically, brand also presents rich opportunities for engagement. It’s the reach of the branch and the power of the brand married together that have banks seeking to augment their organization’s scale and scope through targeted merger and acquisition activity.

Beyond optimizing what you have, what are the top principles for banks as they undertake M&A that will make the most of the marriage of two brands? We’ve rounded up five of the best M&A strategies and solutions focused on brand architecture, branch network and your internal culture.

1) Define Your Brand Architecture

How will two brands relate after the merger or acquisition is finalized? Whether it’s a House of Brands, an Endorsed Brand or a Singular Brand, understanding and calibrating the relationship between the brands post-merger will help determine the roadmap forward. M&A represents a distinct competitive advantage for financial services to scale, but only if a clear brand architecture is put in place to maximize operational efficiency and take advantage of the key assets each brand will bring to union.

2) Local Influence

With effective decision-making for the branch network, banks are looking to achieve a critical mass in any given market area, so market share exceeds their branch share. According to Believe in Banking, “This is where market opportunity meets efficiency. When evaluating potential merger/acquisitions, look for those that bring you the most concentration in the areas of highest market opportunity – ideally without overlap but contiguous to your current footprint.” Maximizing the branch network is a key consideration for M&A.

3) Know Who and How You Serve

Another key question concerning brand architecture comes from the audience and service-set standpoint. In very specific circumstances, keeping dual-brands post-merger can work, but only under specific scenarios. Does each brand have different audiences, brand promises and geographic areas? Only when the answer to all three of these is yes, do multiple brands under one umbrella make sense. More often, banks will operate under one brand following a merger – expanding geography and enhancing offerings.

4) Understand Why You’re Merging

Merging or acquiring shouldn’t just be a shortcut for growth. There are many considerations in the M&A environment including the pace of change. Sean Keathley, president and CEO of Adrenaline, says, “You could convince people it’s absolutely faster to acquire and it allows you to scale more quickly. In some ways that’s true. But it does come with more baggage… Systems and culture integration and then the physical manifestation of change need to be part of your equation to define the value-add of buying versus growing.”

5) Focus on Culture

Understanding the culture of two organizations and leveraging and laddering their strengths is critical to the success of a merger. In our experience, brands that thrive in the post-merger landscape have two things in common: learning and listening. An empathy-led approach welcomes people in and values their participation in creating culture. With an employee-first approach from the launch through to daily operations, culture can be the glue that binds a brand’s people together or it can be the wall that creates diversions and divisions.

In Part II of M&A Strategies for Success, we will focus on brand considerations following mergers, specifically principles and best practices surrounding financial brand conversions and how to bring the brand to life when bringing together two organizations. If you’d like to speak with one of our branch optimization and M&A experts, contact us at info@adrenalinex.com.

Adrenaline is an experience design agency that creates and implements end-to-end branded experiences through creative and environmental design. We enhance our clients’ customer experiences across digital and physical channels, from their branding and advertising to design and technology in their spaces. After transforming an organization’s brand, Adrenaline extends it across all touchpoints — from employees to the market to in-store environments. And, we focus on serving industries that sell human experiences including financial, healthcare, sports and entertainment.

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