Most professional services firms that want to grow eventually run into at least one of three obstacles:
- No name recognition in new markets
- Established competition that is hard to overcome
- An insufficient pool of qualified job candidates
One of the most effective ways to overcome these hurdles is to acquire businesses that already have the characteristics they need.
In fact, more than 46% of high-growth firms engaged in a merger or acquisition last year. While acquiring a firm can offer instant access to new markets, a larger customer base and a new revenue stream, it also raises a number of branding questions.
The question I hear most often is whether to fold the acquired firm into the buyer’s own brand or keep it separate. This is a problem of brand architecture, and how you choose to answer it can have broad implications on your firm and how it is perceived. Today, I want to focus on the approach most acquirers prefer: the unified brand.
The Unified Brand: A Seamless Integration
When I say unified brand, I mean the acquired firm is fully integrated into the parent company, adopting its name, logo, culture and messaging. This strategy has the advantage of simplicity and clarity. There’s no confusion in the marketplace about who you are or what you do.
However, achieving a truly unified brand is often easier said than done. Firms often acquire other businesses for strategic reasons without fully considering how they will integrate the new team. This can be especially challenging when the two firms have very different cultures or business models.
For instance, we worked with a traditional on-site accounting firm that bought a highly entrepreneurial firm with a fully remote team and whose clients paid on a subscription model. The acquirer wanted to assimilate the acquired firm into its traditional culture. You can imagine the problems they were having! While we were well suited to address their brand and messaging challenges, the cultural issues were outside our area of expertise.
Based on this and many similar experiences, I strongly recommend that any firm that is about to make, or recently has made, an acquisition to work with a post-merger consultant. They can help you see challenges in the offing and develop strategies to resolve any differences—or determine that a unified brand approach isn’t going to work.
How Multiple Brands Can Become One
Once any differences are addressed, it is often easy for an acquired firm to become a distinct service line under the master brand. This simple approach makes sense when the acquired firm brings an entirely new skillset or market focus to your business.
For example, a consulting firm might acquire a smaller firm that specializes in executive coaching and rebrand it as the “Executive Coaching Division” of the parent company. This allows the acquired firm to retain a degree of its specialized identity while still benefiting from the resources and reputation of the larger organization. This is a classic example of a branded house strategy, where all acquired firms inherit the name and logo of the parent firm but are also identified by their area of expertise.
This approach has several advantages. It allows you to each business unit to compete with specialist firms. At the same time, any business unit can tap into the diverse range of in-house expertise when needed, creating new opportunities for collaboration and cross-selling. However, it can be difficult for a business unit to distinguish itself from the overall firm, and specialized competitors may still have a perceived advantage. Often, however, prospective clients are looking for a firm with a wide range of expertise, offsetting the specialist’s advantage in some cases.
In many situations, however, the acquired firm is either very similar to the acquirer or there is much overlap in their capabilities. In these cases, the acquiring firm will often assign the people in the acquired firm to the practice areas or business units most relevant to their expertise.
The Role of a Branding Firm and Integration Consultant
Navigating the complexities of post-acquisition branding is something no firm should do alone. A branding firm can be an invaluable partner in this process. They can help you structure your post-acquisition brand architecture, whether you choose a unified brand, a house of brands, or a branded house approach. They can also help you create a cohesive visual identity that reflects your new, expanded organization.
Perhaps most importantly, they can help you develop thoughtful messaging that explains the rationale behind the acquisition to both internal and external audiences, which is crucial for minimizing brand confusion and anxiety in the marketplace.
It’s also wise to engage a consultant to advise you on the integration process itself. The key is to anticipate the challenges ahead and to have a clear plan to address them. With the right strategy and support, an acquisition can be a powerful tool to grow in size, talent and specialized expertise.
