Article published by the Indiana Technology & Innovation Association (ITIA) on June 21, 2024
https://www.indianatechnology.org/news/13372907
“To merge, or not to merge.” That is the question that companies often discreetly ask in today’s business environment. These undisclosed, perhaps even taboo conversations, being done in the back room or over glasses of wine seem to be happening—especially in the technology industry—at a steady clip in 2024. When companies look to combine forces through a merger or acquisition, the pace of negotiations means their reputation and a well-thought-out communications strategy often gets overlooked.
In our firm’s experience of supporting both the acquirer and the acquired companies, the overarching theme we’ve encountered is that clear, concise and consistent communications is at the epicenter of a successful acquisition. Moreover, the cohesiveness of a strategic M&A plan—and its actualizations—must include safeguarding reputation as a paramount consideration.
Merging for More Than Financials
When analyzing and auditing a respective business to determine if proceeding with a merger makes sense, considerations include the strength of both companies’ balance sheets, cultural similarities, and compatible technology and overall strength of brand and vision.
“A merger has to make sense financially for both organizations, but we also place a lot of emphasis on shared vision,” Paris Chevalier, former chief marketing officer for Xceed, an El Segundo, California financial institution that merged with Kinecta Credit Union.
“In addition to a thorough review of both entities financials and an in-depth review of products, services, locations and associates, we carefully examine a company’s mission, vision and values,” she said.
If two entities decide to come together, communication must be considered in the context of logistics and cultural sensitivities, customer nuances and understandings. Then the importance of timing and channels of communication can make all the difference in keeping institutional reputations intact.
Timing Is Everything
Communication is important before, during and after a merger. Determining how to communicate and reputation risk considerations are often brought into the realm late. These important components should be brought in early, however, to help maximize opportunity, identify vulnerabilities and ensure a smooth transition.
To ensure a potential merger happens seamlessly, multiple departments should be involved beforehand – not only the top-level executives. Be sure to include members of your operations, IT, communication, marketing, HR and even legal teams. It is also important to solidify that the board, executives, managers, customer or client-facing staff and spokespeople are unified in their communications. This can be accomplished with what we call “message unity training” to ensure everyone’s “singing from the same song page” when details of the acquisition are announced.
Up, Inside & Out: Multi-Prong Approach to Announce Acquisition
During an acquisition, a multi-prong approach with a well-orchestrated cascade of communications should follow the sequence, “Up,” “Inside” and “Out”:
Communicate “Up”
- Internally to the acquiring the company: The board, executives, and managers.
- Internally to the company being acquired: The board, executives, and managers.
Communicate “Inside”
- Internally to both staffs, customers, vendors, partners and industry associations (e.g., ITIA).
Communicate “Out”
- Externally to the public, communities, media and social influencers.
Communication Questions To Ask
How can you refine your overall communications strategy and manage your reputation before, during and after an acquisition? Ask yourself these key questions:
- What exactly and clearly do you want to communicate?
- Why do you want to communicate it?
- Why should each audience care about the acquisition?
- Why is this partnership or consolidation happening now?
- Who are the existing and prospective customers you want to communicate to and prioritize?
- How/where (i.e., what channels of communication) will you communicate?
- One-on-one meetings, phone calls, emails, newsletters, video, media and social media.
- When is the best time to communicate your message?
Humanize the Acquisition
A company’s early communications to both staff and customers regarding the acquisition are of the utmost importance. The first step is a personalized note from the CEO that welcomes and reassures acquired customers, placing emphasis on their value to the combined company’s future. A heartfelt video message from the CEO is also a nice touch. However, face-to-face direct interactions, when appropriate, can occur to have even more impact on customer attrition.
Employees are, in essence, the face of the company and are, therefore, absolutely essential to customer retention. As such, the benefits of the acquisition should be thoughtfully and clearly communicated to staff first. Failure to clearly communicate the details of the deal early with employees translates into confusion and later poor customer understanding.
Staff meetings should be held immediately to bring the core benefits of the acquisition to light—and what it all means to them. It’s also very important that executive leadership present messaging to staff in a clear, unified voice. Training and practicing the talking points will keep the desired message consistent. Staff should be instructed to relay these key messages to customers.
Following initial staff meetings and the delivery of talking points, ongoing communication across multiple platforms (e.g., mobile, website, in-office, written marketing materials, video) will welcome questions, build excitement and, above all, express to customers that they are valued and what to expect next.
The value of genuine communications to strengthen staff and customer retention through the post-acquisition integration process is quite clear. Lost employees and customers must inevitably be replaced by new ones. Even a small improvement in staff and customer retention can make a big difference to deposit balances, fee streams, loan portfolios and, ultimately, the bottom line.
Keep The Communications Coming
Many acquisitions fall short of expectations because of a failure to understand the importance of communicating. Even though the acquisition may look great on paper, it’s important to pay attention to the reputation ramifications, as well as the communication needs of the post-acquisition integration process. This is the secret to making a company M&A deal truly successful.
Assuming the reason for merging is to bind together, prosper and grow, the six months after an acquisition should be considered a working juncture of continued proactive communications and reputation enhancement. A company should use this opportunity to retain staff and customers, as well as to attract new staff and customers. Direct communications can also help strengthen the bond with the communities that the combined company serves, through staff volunteer time, addressing important issues and being stewards of the acquisition process.
Casey Boggs is president of ReputationUs – An ITIA member, and a public relations, reputation management and crisis mitigation firm specializing in technology.
