At first blush, mergers can seem like a foolproof way for your firm and its brand to grow quickly, but it’s just as easy to fail as it is to succeed.
M&A’s have become an increasingly popular strategy for accounting firms. They are attractive largely because they offer a relatively quick way to gain credibility, add intellectual firepower or change the balance of power in a particular market. But, as with any growth strategy, they come with their share of risk.
In this post, we’ll cover three major, brand-related pitfalls associated with M&A’s and how to avoid them.
1. Loss of Differentiation
One of the most potent benefits of establishing a strong brand identity is the value that can be achieved through uniqueness. In other words, having strength in a specific service or industry provides a firm with value that clients are willing to pay for.
Any merger or acquisition that can dilute a firm’s uniqueness poses a risk to that firm’s value. The take-away: avoid any M&A in which the features and the benefits they provide have no real relevance to your target audience.
If what the acquired firm offers does not directly support and enhance what your firm does and provide a strengthened competitive advantage, it’s not an asset – it’s a liability. The best course of action is to avoid this situation before you begin merger talks. However, if you’ve already made the commitment, don’t panic., you can still pull it off.
Start by modifying your target audience to accommodate the combined services you’ll be offering and then develop a new set of strong differentiators. Remember, for differentiators to work, they need to pass the three tests -- are they true, relevant to prospects at the time of selection, and provable?
About Lee Frederiksen
Lee W. Frederiksen, PhD, is managing partner at Hinge, a marketing firm that specializes in branding and marketing for professional services. Hinge conducts groundbreaking research into high-growth firms and offers a complete suite of services for firms that want to become more visible and grow.