The 1990s have fostered an outbreak of mergers and acquisitions.
Last year a record $2.4 trillion worth of deals were booked. There were 200 in the average week, many of them related to the banking industry.
In the hectic process of wrapping up a bank merger, attorneys and executives often pay scant attention to a bank's most valuable asset-its corporate brand.
More than merely a logo or slogan, the corporate brand is the stated character and purpose of a bank and its services. The brand is an intentional marketing-oriented communications platform across all the business units, media, and audiences. It is, in effect, a promise the bank makes to depositors and customers.
A strong brand maximizes return on investment, strengthens the bottom line, and positively affects stock value. It also influences customer preferences, giving the bank an advantage over competitors. It's a rallying cry for the troops as well, helping smooth out rough spots during times of challenge and change.
A brand's value is especially important during a merger or acquisition. Which brand should you keep and build on? Should a new brand be introduced?
The recent merger of BankAmerica Corp. and NationsBank Corp. created the United States' largest bank. Operating as BankAmerica, it serves a full spectrum of individuals and businesses.
Key elements in their branding program are a new Bank of America logo and a new corporate symbol, evoking the bank's scope, pride, and the unity of its people under one banner. The word "America," representing the powerful idea of freedom to pursue ideas and ideals, played an important part in the branding decision.
At the time of the merger, chairman and chief executive Hugh McColl was quoted as saying:
"We began with the two best names in financial services. We interviewed more than 5,000 customers, clients, and associates to determine the respective strengths of the two. ... Based on our research, we are confident that the selection of Bank of America will position our company for success in today's-and tomorrow's-swiftly changing and intensely competitive financial services industry."
Implementation of the bank's branding system has already begun, but it is too early to measure the results. The merger went smoothly though, and the prospects for success seem good.
Not all mergers are as successful. For example, the Citicorp/Travelers deal appears to have been done with too little attention paid to branding.
One result was an information gap about synergies that gave the media ample opportunity for speculation about an internal turf war. Whether Citigroup's brand vitality will surpass that of either Travelers or Citicorp remains to be seen.
When determining a newly formed bank's brand, remember that it should represent the essence of the merger itself. Failure to properly understand and communicate the basics of the brand can lead to confusion, employee turnover, and a drop in the stock price.
Also remember that the media, customers, employees, and investors all focus on you during a merger. Be prepared to make use of this rare communications opportunity. A branding plan, including the name, message, materials, and a well-rehearsed spokesperson should be ready so you can clearly communicate the business logic behind the deal.
When choosing between the brands of two merging banks, the size of the balance sheets should not be the only consideration. Instead, select the brand with the greatest leverage. Once set on a corporate name and the branding message behind it, carefully plan the first month of post-merger communications, taking the communications offensive quickly in order to control the brand's definition. Then look to maintain your branding campaign for three to five years.
Don't forget the importance of your own people. Sometimes they need to be coaxed through a merger. Well-planned communications that reinforce brand values can help bring two cultures together more easily and effectively.
Mergers don't always work, of course. But they are still a tremendous opportunity for branding. And while the cost to get branding right is not much more than a decimal point on the deal, potential returns can be enormous. So take full advantage of the momentum and visibility mergers bring, and keep in mind that a brand, like any valuable asset, must be carefully shepherded through change.