When two brands are better than one: communicating the benefits of an acquisition

Despite the pandemic, 2020 was a year filled with mergers and acquisitions, as brands looked to partner in order to gain a competitive advantage in a disrupted marketplace.

While the individual companies and circumstances vary, the reasoning behind the acquisitions often refers to “synergies” and “opportunities” and “collaboration”, but overlooks the actual benefits to consumers.

It’s essential that brands factor in this critical part of the communication process, always keeping in mind their number-one priority: customers. What will customers gain (and, perhaps more specifically, not lose) through the acquisition? What are the benefits of having this larger brand now supporting the smaller one? Why does the new partnership matter to them? How will it make their lives—or, at the very least, their shopping experience—better?

Consider these two examples:

In 2005, the hedge fund that owned Kmart saw an opportunity to acquire Sears and merge the two, creating Sears Holdings Corporation. It was hoped the two struggling retailers could share brands and cut costs by reconciling supply chains and reducing administrative overhead.

But what wasn’t fully considered or communicated was how combining the two entities might help consumers. What unique benefits could the new joint organization provide? What new offerings and experiences could it bring to the table? Sears Holdings continued to struggle until its bankruptcy in 2018.  

In 2014, Google acquired Nest, with a view to making a strong entrance into the smart home market. The acquisition seemed like a match made in heaven: Google’s outstanding track record in software development, combined with Nest’s core competency of building exceptional hardware.

However, Google shifted its focus away from customers in the hopes of leveraging Nest founder Tony Fadell (co-creator of the iPod) in other areas of the business. Ultimately Fadell left the company and innovation at Nest stalled.

Customers must remain the number-one priority—for two brands operating separately or together as one. At all stages of the acquisition, this commitment must be communicated, and that communication revolves around two key strategies:

  1. Looking at the acquisition through a customer lens:
    • How do the strengths and weaknesses of the master brand and sub-brand line up? How do the strengths of the master brand now enhance those of the sub-brand?
    • How do the two customer journeys compare? How will they now overlap? And more importantly, how will the journey improve?
  1. Getting customers excited and keeping them informed:
    • How could communications be leveraged beyond a standard corporate news release? How could consumers be given more ownership of “their new brand”? e.g.: Social media? Event planning? In-store?
    • How could the buzz be maintained? For instance, could key business milestones be leveraged as promotional opportunities—e.g.: countdowns to new product/service releases?

It’s no surprise that consumers tend to assume the worst when one brand acquires another. They worry the attributes that made the sub-brand special will be overshadowed by the master brand. Sometimes, however, two brands are better than one. It’s up to them to make customers aware of exactly how.