Brand Consolidation: Strategies and Challenges

So, What is brand consolidation?

In a nutshell, it is the process of bringing two or more brands together and combining them to create one new fortified brand with a new identity and new positioning.

For example, the ebb and flow of business success demand brands to evolve; visual identities and positioning for brands can age over time and become less impactful, so it is widespread for existing brands who are looking for a new logo, a refreshed strategy, or a rebrand altogether, to opt for consolidation. There are many examples under our noses that we may not have realised – think about the technology giant Seimens AG, for instance – Europe’s largest manufacturing company. This global brand has only sometimes had the visual identity, positioning, and message that it owns today. The brand we know today was consolidated in 1966 between German brands Siemens & Halske.

It is essential to distinguish consolidation from a closely related brand strategy that is often confused with one another. A merger is fundamentally the combination of two or more brands in which only one brand remains. A brand equation may help clarify this idea: Company A + Company B = Company A. Company A is the dominant, successful merged company that will take in the best parts of both companies combined. That being said, a brand consolidation is also a possible outcome of an M&A deal (merger and acquisition)…

So why consider it? Read on to learn more about this useful refreshing tactic…

When does it make sense to consolidate brands?

It can be the step that elevates an ailing brand, disconnected from its purpose, into a much more substantial sum of parts. It may be considered if your current brand has an unclear purpose, your product offering is confusing, and you struggle to stand out from your competitors.

Here are some of the critical benefits of a well-planned, bullet-proof brand consolidation strategy.

Refreshed brand image: When two brands are replaced by a third, this provides an opportunity to cut through the market again with a contemporary, fresh brand identity that connects with potential new customers while giving previous customers something new.

Increased market presence: By consolidating with a larger brand, you increase the size of the final brand’s reach, inheriting a new target audience on top of your own and increasing the market share of the new brand.

More substantial brand equity: You can create an air-tight message and prove your brand value to audiences. By redefining your core values, messaging, brand name, and offering, you can increase customer loyalty by ensuring your brand outputs live by these principles. This is especially beneficial within B2B businesses whose success thrives on recurrent, loyal customers who return repeatedly.

Sharing of resources: let’s face it, brand management can be costly. To keep a brand afloat requires financial stability and clever bookkeeping. Through consolidation, the new brand created can share financial resources and reduce expenses over time through the economy of scale.

The challenges of brand consolidation

There are, of course, hurdles that can stand in the way. Here are some issues to be mindful of to maximise this strategy’s potential…

Redundancies: Unfortunately, the process of business acquisition and merger of two businesses can lead to staff cuts. By effectively creating one brand from two, the acquired brand team size may lose team members. Often, profits are prioritised, and costs are cut back where possible.

Financial problems: An issue to consider is that the brands forming their synergy may share economic problems. For example, the more prominent, more successful brand that has acquired a smaller brand may inherit debt from the larger brand.

Brand confusion: Can result from poor planning and a weak brand architecture. It can begin internally, with misalignments between stakeholders on your purpose, which can then impact the rollout of brand applications. For example, an unsuitable tone of voice or language on a new brand’s website, social media posts, and communications with the consumer can lead to confusion and distrust.

Strategic brand consolidation planning

Harvard business review revealed that only one in five brand consolidations succeed. For example, consider this oversight scenario for B2B companies that create a new brand due to an M&A deal. For B2B brands, it is super important to maintain continuous, trust-building relationships with their customers:

Two companies merge, but insufficient planning complicates brand consolidation and rollout, producing websites with mixed branding, confusing visitors and reducing the impact of their subsequent new brand.

Now, don’t let this deter you from plotting your next move; instead, let this be a lesson in the importance of rigorous research, fore-planning, and execution. With our valuable experience and insight, we have collated some strategic tips for brand consolidation for you to make the most of.

We cannot emphasise enough the role of research and thorough planning. A solid, well-considered brand strategy is at the foundation of a successful brand consolidation. Start by auditing your existing brand portfolio and the brands of the company you are consolidating with. Identify the weaknesses and strengths of your brands and the other company’s brands, and define what can be brought into the new brand.

To lay out a new strategy, you must strip away the ‘day-to-day’ noise that gets in the way and ask, ‘Why do you do what you do?’ – this is your brand purpose. A core brand purpose should resonate throughout all your brand touchpoints – think of it as the red-thread to be carried through your internal and external communications. What are you offering, and why? What differentiates you? Define this ‘why’, and let it guide you.

Next, distil your brand values (what comes through your messaging), and let these values take you towards your brand personality and target audience persona. This personality is key to your brand language and influences your tone of voice when communicating with your audience. Your visual identity must align with your brand purpose, creating a synergy across all outputs.

These principles will form the foundation of your new brand and will give it the framework for success.

Define goals and plan the path to success

Next, map out your journey to success and plan effectively for achievements.

Every business has different metrics for success and what their brand goals are. A good place to start is creating the plan for your next five years as a new brand, and from then, the success plan for the next year.

Think about these example questions when forming your plan:

• Brand Launch: what is your criteria for a successful launch? How many customers do you hope to retain from the previous two brands? How many new customers? Do you hope to get press coverage? Will you host a launch event and if so, what is your target attendance number? This can help you to build a launch campaign.
• Sales: What are your target sales metrics? How much do you aim to be selling, and therefore turning over, in your first year?
• Social media growth: How many followers do you hope to gain within this first year, and what is your target audience? This will help you to plan how exactly you will make this happen.

An excellent way to plan this is through a set of internal calendars that map out launches, social media content, campaigns, events, and promotions. This way you know exactly what you are working towards, and when.

Regularly check in on your success throughout the year, and be adaptable. The climate is unpredictable and requires creative thinking to solve problems. Ensure all stakeholders are aligned on your brand goals and the plan for success, and work together to achieve them.

Consider expenses – be realistic

Plan your costs meticulously. When consolidating with another business, it is essential to audit their finances, audit your own, look at what resources can be shared, and align on a budget that works with your goals for success.

Think realistically; factor in every detail when researching your proposed costs for creating your new brand. It is also always useful to allocate a contingency into your budget to accommodate any overspending and ensure no surprises. There is the work that goes into branding to budget for – such as creating your brand strategy, tone of voice, visual identity and brand guidelines creation, followed by your in-house training, and not to mention the rollout of your new brand through a launch campaign.

Although it can be costly to create a new brand, the investment is well worth it. A trusted, strong brand that is consistent throughout all of your touchpoints, is the most valuable asset you have, and can help to secure repeated sales when you launch.

Improve client interactions – personalisation is key.

When launching your consolidated brand, client and customer interactions are crucial in building brand equity and trust.

This is where your target audience persona, brand personality, and tone of voice play a vital role. You can convey your brand purpose with strength, while speaking to the preferences and needs of your target consumer.

Enhance B2B and B2C engagement tactics through research and strategic implementation:

• Define your target audience and understand their needs. Start by thoroughly understanding your customers’ business needs, goals, and challenges.
• Personalise your communication. Tailor your communication to each customer’s unique needs through a consistent tone of voice. Your TOV must connect with your brand purpose and deliver on your brand proposition. Understand the nuances of language, for instance, for a B2B brand you may need to adopt more dynamic tailored but professional language to sustain long-running customer relationships, whereas with B2C brand you may be able to have a more colloquial and personable tone to entice new audiences.
• Offer Value: Every customer interaction with your brand should provide value. Whether it’s a blog post, email, landing page, or webinar, your customers should walk away with valuable insights or solutions. Effective content marketing is a great way to do this, especially for B2B brands, as it allows you to address your audience’s challenges and interests.

Your brand messaging and communications offer an invaluable opportunity to follow through with your value proposition, so ensure to invest time and craft into this avenue of your brand.

Talk to experts

At Studio Noel, we have years of experience helping businesses harness the best brand strategy for them. From brand audits and workshops on your brand strategy and creating a unique visual identity to remote webinars that educate and support your in-house teams, we can guide you every step of the way in the process of consolidation.

Don’t hesitate to get in touch with our team at Studio Noel to start your journey.