SEATTLE-During a CU merger, the focus is often on internal issues such as personnel and eliminating duplicative costs, but CUs often overlook the need to ensure the brand experience is not diluted.
"You need to understand and learn that market very well first before you make any branding decisions," advised Mark Weber, president/CEO of Weber Marketing Group. "You're learning a regional dialect that can be substantially different, so it is imperative from a brand perspective to understand members and consumers in those markets and, perhaps even more importantly, to understand employees in that market. This is a healthy time to assess your own brand, because all brands evolve, and any time you expand into a new region you have to understand the implications to your own brand."
If a credit union recognizes that it does not have a strong brand identity prior to making an acquisition, Weber believes retaining the existing name of an acquired institution is likely the best bet while the acquiring CU moves immediately to shore up the brand.
"Discipline is everything," suggested Fairfax, Va.-based marketing and branding consultant Paul Lucas when asked how CUs can best ensure that brand experience is consistent across the board. He called for a top-down marketing structure with tight restrictions on branch independence, uniform use of logos and homogenous branches as chief among the ways to ensure brand consistency across the board. This firm top-down approach is particularly important for credit unions with a large geographical footprint, because of the potential for far-flung locations to break from the proverbial script, Lucas noted.
When expanding through mergers and acquisitions, it is imperative to examine the brand equity of the acquired institution and determine how important the name and culture is to both members and employees, according to Eduardo Alvarez, managing director of Brand and Retail Strategy at design-build firm NewGround in St. Louis. "You cannot negate what has existed with the other institution or institutions," said Alverez. "Once you see where that equity lays you have to develop a program to communicate with membership and your staff. It's a two way street when you are selling."
He added that while a transition in the model of Chase's acquisition of WaMu or Wells Fargo's purchase of Wachovia is sound for a 9 to 12 month period, "at some point I think you are going to have to bite the bullet, unless you are going to start acquiring and running these institutions as divisions."
While some CUs have notably chosen the "house of brands" as opposed to "branded house" structure by running acquired institutions as divisions, Weber believes such a strategy faces the potential of confusing and frustrating consumers. "When the consumer sees one value proposition of a brand that provides a holistic set of services, you get a wonderful branded house," he said.
Operational issues during a merger, especially those with unique geographic circumstances, usually take center stage. But ignoring or relegating to the backburner the deep emotional impact such an acquisition has on employees would be a critical mistake, according to Weber. "If your focus is on operational integration you are going to miss on the core of the culture. This has got to be about people and employees and helping them grasp the vision and emotional engagement of a culture that they did not pick," he said. "The key that unlocks it, in my experience, is to use brand as the flagship."
Once new and existing employees are on board with the new culture, then the operational combination can begin in earnest, sources told CU Journal. And, of course, it is imperative that the background issues be completely ironed out before launching a new brand at an acquired institution. "The worst thing you can do is switch names and logos and then not be able to deliver on the other side," Alavarez said. "That is the kiss of death."
