M&As are especially popular in the professional services space with the growing wave of retiring Baby Boomers and a rapidly changing economy and marketplace.

So what is the impact of all these mergers? More importantly, does an M&A make sense for your firm?

At Hinge, we’ve studied the factors that drive premium valuations and high growth and uncovered some facts that may surprise you.

Strategic M&A: Seeking a solution to a business problem

There are essentially two kinds of mergers and acquisitions: strategic and financial.

A financial merger or acquisition is pursued, as the name implies, for financial reasons—often to pick up some quick cash or as an investment. But I’m not really interested in financial M&As for this particular discussion.

Strategic mergers and acquisitions offer a solution to a different business problem. Perhaps the acquirer is looking to grab a new product line, add some additional facilities, enter a new market, or gain expertise and intellectual property. For professional services firms, a strategic M&A is often about gaining credibility, adding intellectual firepower, or changing the balance of power in a particular market.

The bottom line is a strategic merger yields value for both the acquired and the acquiring firm. To reluctantly use a hackneyed phrase, it’s a “win-win” for both parties.

So what does a strategic merger look like? Here’s a good example:

A few years back we were researching firms that received unusually high valuations. One caught my attention. It was a smaller firm that specialized in top-secret work and had deep experience and contacts in one of the intelligence agencies. This firm was sold for an eye-popping 10-times revenue.

When we asked the acquiring firm why they were willing to pay such sums, their reasons were perfectly clear.

The target firm offered must-have qualifications and contracts with a must-have client. Not having these capabilities would put the acquiring firm at a significant disadvantage when competing for upcoming work. In short, they believed the long-term value for the acquiring firm was much greater than the inflated purchase price.

That’s a strategic merger.

But when is it advantageous to proceed with an aggressive growth strategy of mergers and acquisitions, rather rely on disciplined organic growth?

When M&A Works as a Growth Strategy

Mergers and acquisitions make perfect sense in a variety of situations. For example, maybe an opportunity presents itself that requires fast, decisive action. Or maybe a competitive threat compels a defensive move to get bigger, faster.

Here are five situations in which mergers and acquisitions have proven useful as a growth strategy:

1. Fills critical gaps in service offerings or client lists

When the marketplace changes in response to external events or new laws and regulations, it can create a gap in a firm’s critical offerings. It is a prime opportunity for a strategic merger.

After 9/11, the national security and defense industry lacked the relevant skills to match rapidly changing federal requirements. Companies quickly realized they would be sidelined without the skills and experience necessary to meet the new security demand. The firms with the requisite experience and relevant client lists suddenly found themselves strategically valuable and highly sought-after acquisition targets.

2. Efficient way to acquire talent and intellectual property

Many industries are seeing an acute shortage of experienced professional staff. Cybersecurity, accounting, and engineering are just a few examples that immediately come to mind.

The reality is, intellectual property (IP) is the new currency of modern business. Once squirreled away and carefully guarded, IP is now actively bought and sold. For many companies, the acquisition of a firm and its IP is the quickest path to market dominance—or at least a roadblock to competitive incursions.

3. Opportunity to leverage synergies

A strategic merger, if done as part of a thoughtful growth strategy, can result in synergies that offer real value for both the acquired and the acquiring.

There are two basic types of M&A-related synergies: cost and revenue.

Cost synergies are all about cutting costs by taking advantage of overlapping operations or resources and consolidating them into one entity. In a strategic M&A, a number of areas are suitable for cost-cutting, such as redundant facilities, workforces, or business units and areas of operation. But cost synergies can also result in an increase in buying and negotiating power thanks to the larger combined budget.

Revenue synergies alter the competitive balance of power and create opportunities to change market dynamics, sell more products, or raise prices. Companies can take advantage of revenue synergies and make more money in many ways, including the following:

• Reduce competition
• Open new territories
• Access new markets (through newly acquired expertise, products, services, or capacity)
• Expand the customer base for cross-selling opportunities
• Develop sales opportunities by marketing complementary products or services.

4. Add a new business model

Many professional services firms are based on a billable-hours business model, but that is certainly not the only option. Some firms generate revenue as a fixed fee or through performance incentives. Others may employ subscription models (popular in the software industry).

Of course, the value of an effective M&A growth strategy is not just about how you are paid. A merger may also offer a new type of service, such as brokerage, insurance or money management. If you’re considering a new business model, the easiest way to develop and test it out is to acquire a firm that’s already using the model successfully. That way you avoid possible missteps from inexperience.

5. Save time and long learning curves

Much like adding a new business model, a strategic M&A may help you save considerable time and expense in your growth strategy.

Let’s say you’re considering a new service for your business. Your firm is fully capable of developing and delivering that service on its own, but it will take more time, money, and resources than you’re willing to devote. It might be easier and more cost-effective to simply acquire the capability.

Not only is this a practical and smart shortcut to the sought-after service and expertise, you also acquire a built-in customer base and target audience. Bingo!

When M&A Falters as a Growth Strategy

But not everyone succeeds when mergers and acquisitions are part of the overall growth strategy. Sometimes a solid strategy is derailed by problems in implementation or flaws in the logic or reasoning behind the strategy.

Let’s explore how an M&A growth strategy can go wrong:

1. Cultural clash

Different firms have different cultures. No surprise there. But the difference in cultures can be problematic.

You can guard against culture clash by being clear about the culture you want and using all tools at your disposal to ensure you achieve it. For example, education, the right incentives, and a focus on your employee brand is most helpful when looking at a possible merging of corporate cultures.

2. Loss of differentiation

Avoid mergers when the features—and benefits—that make one firm valuable are not relevant to the other brand. Rather than add critical assets, capabilities, or value, the acquired or merged firm dilutes the brand and competitive advantage.

A merger should be the result of a carefully researched brand analysis. It should NOT be an ego-driven trophy deal.

3. A major distraction

Mergers and post-merger integrations are resource-intensive activities that usually involve some of the most senior people in the firm. If they are not prepared for it, they can easily be distracted by other critical, but less urgent activities.

The potential for distraction is greatest—and most profound—after the deal is done and the focus moves to integration. If senior management gets too distracted, you risk having the merger flounder as well as damaging the underlying business.

4. Marketplace confusion

Let’s say Firm A, a highly respected accounting firm that specializes in manufacturing, acquires Firm B, a cybersecurity firm with specializes in helping retailers. The acquisition seems very strategic. Seeing an opportunity, the combined firm, A+B Associates, tries to add retail to their specialization. The result is a confusing marketplace.

Does A+B still specialize in manufacturing? Are they no longer an accounting firm?

The confusion can be even worse if the only rationale for the merger is growth for growth’s sake. The whole confusing mess could be avoided with a solid, research-based plan to position the merged brand and help current and potential customers understand the rationale and benefits of the merger.

5. Loss of brand strength

If the marketplace is confused, the strength of your brand will suffer. After all, brand strength is the product of a simple equation:

Reputation x Visibility = Brand Strength

Where reputation is what you’re known for and visibility is how widely you are known for it. Understanding this equation can help you avoid the perils of diminished brand strength.

An ill-timed merger can quickly diminish the strength of both the acquiring and acquired brands. Here’s an all-too-typical example:

Brand M, which has considerable visibility in the Midwest, wants to expand into the Southeast. To accomplish this, Brand M acquires Brand S, a southeastern-based firm. But there is a problem. The Midwestern brand is unknown in the southeast, so its overall brand strength is actually diminished by the acquisition. And, when the southeastern firm adopts the brand identity of Brand M, its brand strength is also diminished. Everybody loses.

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The M&A Guide for Professional Services Firms

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So how do you overcome this problem? Sometimes a gradual transition to a new brand is the right answer. Other times a concerted focus on building the visibility of the new brand in the market where it’s less known is the key.

Watch out for situations where you must change both the focus of the reputation and increase visibility. These are the most challenging mergers.

Developing Your High Growth Strategy

Achieving high growth starts with a true understanding of the marketplace as it really exists and how your firm is actually perceived (not as you’d like it to be perceived). Do your research and understand fully what each firm—the acquired as well as the acquiring—bring to the equation.

In the end, a successful high-growth strategy will include the following elements:

It is forward-looking—A good strategy is not just a response to what has been. It’s about what can be achieved. Where do you really want your firm to go? How will you get there? What needs to happen to do it?

It doesn’t require complete consensus—If absolutely everyone thinks it’s a great plan, then you’re not taking appropriate risks.

It does require buy-in—Senior management must be on board and embrace what needs to be done. Without management buy-in, any strategy is doomed to failure. But don’t forget your employees. Workers at all levels should be enthusiastic about what the firm is gaining and where it’s heading.

It focuses on implementation—High growth requires careful implementation of every aspect of a business strategy and plan. Follow through with implementation.

If M&A is a part of your growth strategy, focus on the emerging culture and brand and carefully shape the new firm. And consider carefully how the merged firm will generate organic growth.

Free Resource

The M&A Guide for Professional Services Firms

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The post Mergers and Acquisitions as Part of Your Growth Strategy appeared first on Hinge Marketing.

If you are thinking about bringing new life to your professional services firm brand, this article can help you answer questions like these and lay a path to a smooth and successful outcome. While every firm is different, there are a set of rebranding strategies that are proven to work for any firm, whatever its size or industry.

In this article we explore common reasons firms undergo a rebrand. Next, we take you through a proven seven-step rebranding strategy that will deliver strong differentiators and positioning, clear messaging, and a fresh visual identity. Finally, we examine two real-world examples of firms that have undergone a rebrand. 

Let’s begin by answering an essential question: why?

Purpose of Rebranding

There are many reasons why a professional services firm might consider rebranding. Here are four of the most common:

1. Refresh a tired brand. The marketplace is continually evolving. After a few years of neglect, a brand can lose its relevancy, look and sound dated, and become a drag on a firm’s success. 
2. Address a merger or acquisition. A merger or major acquisition can create a major shift in target audience or business strategy. It may even require a new name.
3. Overcome a public relations crisis. Rebranding can be an effective way to change negative public perceptions and begin the process of rebuilding a firm’s reputation.
4. Reposition the firm. Most professional services firms lack strong differentiators or a compelling reason for buyers to choose them over competitors. Rebranding can uncover your differentiators and tell a powerful story.

These four reasons have one thing in common: firms need to connect at an emotional level with their audiences. Rebranding equips firms with the messaging, visuals, and credibility to stand apart—and stand for something. In a crowded and confusing marketplace, a strong brand gives buyers a reason to notice you. And to care.

If you have read this far in this article, you are probably at least thinking about a rebrand. Whatever specific reason is driving your interest, you have to consider one more thing: how do you rebrand your firm in a way that yields the business result you desire?

That’s what we’re going to cover next. What is the right strategy to rebrand your professional services firm? Let’s find out! (For more in-depth coverage, check out our Rebranding Guide.)

A 7-Step Rebranding Campaign

If you go into it without a plan, rebranding your firm can take many wrong turns and waste a lot of time and money. But if you approach it methodically and lay a solid foundation, the process should be smooth and exciting. The rebranding strategy below is based on two decades of experience with professional services firms of all stripes. It works because it builds on each piece that comes before. 

1. Start With the Business Reason

Any rebranding strategy should start with a thorough understanding of the business reason behind the rebranding. Is it driven by a need to accelerate growth? Does your firm need to compete with larger, more established competitors?

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The Rebranding Guide for Professional Services Firms

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Some of these business cases are very easy to make, such as a merger of two firms. Others are more subtle, such as outgrowing your image. If you are not clear about the business reason driving the effort, you run the risk of wasting a tremendous amount of resources. Some of the other top reasons to rebrand your professional services firm includes:

• You need to compete at a higher level or in a new market.
• Your brand no longer reflects who you are.
• Your firm is spun off from an existing brand.
• You have a legal reason compelling you to change.
• You need to simplify and focus your message.
• You have a new marketing team.
• You are launching a new service line.

2. Research Your Firm and Your Target Clients

When you are clear on the business case for a rebranding, the next step is to conduct independent research on your firm and your clients. If you are attempting to move into a new market, that research should include your new target clients as well. The goal is to have an objective understanding of your current brand perception and competencies.

Without this research, you will be operating from an internal perspective only. Our own research on professional services buyers and sellers shows that virtually all firms have blind spots and distort how the marketplace sees them. After all, we are all human. Without objective research, you will build a brand on false assumptions.

3. Use Positioning and Messaging to Capture Your Brand Strategy

As you develop your firm’s market positioning and messaging architecture, you will uncover the essence of your brand strategy. Your market positioning is a brief description of where you fit into the market space. Are you an innovative leader or a low cost provider?

This positioning will drive many of your subsequent decisions. But you can’t just make something up. It needs to balance who you are as a firm and who you want to become. You must be able to support your positioning or your brand will be hollow.

Your messaging architecture articulates your messages to each of your main audiences. These messages must be consistent with your overall brand and supportable. This is not marketing copy. It is the skeleton upon which marketing copy is built.

4. Build Your Brand Identity

This is the part of the rebranding strategy where you develop the visual elements that will communicate your brand. Think firm name (if needed), logo, tagline, colors, business card design, stationary, and the like. These elements are often described in a brand style guidelines document, which provides a set of parameters to ensure your brand is implemented consistently across all of your marketing materials.

Many folks confuse these elements with your brand. Your brand is your reputation and your visibility, not your firm’s name or its logo. Your brand identity is a sort of visual shorthand for your brand.

5. Build Your Website and Online Presence

Your website is your single most important communication and business development tool. It is the place where you can tell a compelling story to each of your audiences. It is the first place a prospective client or employee will turn to learn more about your firm.

It is no exaggeration to say that a website and your online presence are the heart of a modern professional services firm. All rebranding strategies eventually involve your website. In a very real way, a website is built on the framework of your messaging architecture. Together with your remaining online presence (think social media, for example), it is the full expression of your positioning.

6. Marketing Collateral

At this point in your rebranding strategy, you will develop all of the marketing materials that you need to communicate your brand and services messages. Think pitch decks, proposal templates, brochures, one-sheet fliers and trade show booths.

These are the tools that you will use to communicate your message. They should be firmly anchored in your brand strategy.

7. Brand Building Plan

The final element of your rebranding strategy is to develop a plan to promote and strengthen your new brand. How will you launch it internally? In professional services, it is essential that your employees embrace the new brand. After all, they are your product.

It’s also important that you build the brand in a way that communicates your firm’s reputation and expertise, as well as its name. It must communicate your market positioning. Brand building is different for professional services.

Some rebranding strategies fail because they try to shortcut the process. Others fail because they picked the wrong partners to work with. But it doesn’t have to be that way.

Start with a sound rebranding strategy. Find an experienced partner. Give rebranding the attention it deserves and the rewards will follow. A well-positioned firm that clearly communicates its brand is a formidable competitor indeed.

Rebranding Strategy Examples

To help you understand how a strategy like this plays out in the real world, we’d like to share two examples from our own practice at Hinge. In this way, you can see with your own eyes how and why rebranding works. 

Example 1: Jones CPA Group

Strickland & Jones was a 3-office accounting firm in the Tidewater region of Virginia. One of two founding partners had just left the firm, and the remaining owner—Stephen Jones—wanted to reconceive the firm and position it for growth.

Hinge took the firm through the rebranding process, including interviewing 43 clients, influencers and staff members and renaming the firm Jones CPA Group. During the research phase, we discovered that what clients valued most from the firm was their accessible, friendly, approachable style. We decided to position them as great communicators. While communication may not be a unique trait among CPA firms, none of their competitors were talking about it, much less building their brand upon it. And Jones was prepared to go all-in.  

To bring this concept to the fore, we did two things: we developed the tagline, “Let’s talk success,” and we created a logo that incorporated a speech bubble element. Together, they delivered a clear message that anyone could understand.

We also created a suite of stationery and collateral they could use to carry their message to the marketplace. 

Example 2: S&ME

S&ME was a top-100 civil engineering firm that had grown through acquisitions—and it showed. With more than 30 offices across the eastern United States, they had no unified message or brand. It was time to look, sound, and act like the leader they were.

Hinge conducted research that provided the insights upon which we could construct a new, unified brand. We learned that perhaps their greatest asset was their versatility, so we built their positioning around that concept. To communicate that positioning to the marketplace, we developed a tagline: “Built for versatility.”

Next, we redesigned the firm’s logo to anchor their new visual identity and give them a modern look unlike any of their competitors. The new mark features the letters S, M, and E configured out of just two basic shapes—a literal expression of versatility!

We developed a new color palette, dominated by a vivid green, and built out the rest of their identity and collateral. Finally, we designed and launched a powerful new high-performance website, featuring the new positioning and equipping the firm to grow with confidence.

Read the full S&ME Case Story

Take a Bold Step Forward

If you are ready to embark on a rebranding journey, use the roadmap we outline above to get the most out of your investment. Change is never easy, but it can be a lot of fun if you approach it with the right strategy and mindset. In fact, rebranding can—and should—be one of the most exciting and rewarding initiatives your firm will undertake. You’ll uncover opportunities you never knew existed. And you will give your team, your clients, and your prospects a whole new reason to believe again.

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The Rebranding Guide for Professional Services Firms

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The post Rebranding Strategies: A Step-By-Step Approach for Professional Services appeared first on Hinge Marketing.

What is Brand Development?

Brand development is the process of creating and strengthening your professional services brand. As we help firms develop their brands, we divide the process into three phases.

• The first phase is getting your brand strategy right and aligned with your business objectives.
• Second is developing all the tools you will need to communicate the brand, such as your logo, tagline and website.
• Finally, there is the phase of strengthening your newly developed or updated brand.

Your brand development strategy is how you go about accomplishing these tasks. To make the task a bit easier, we’ve broken the brand development strategy into 10 steps.

Your Brand Defined

A professional services brand is best understood as your firm’s reputation and it’s visibility in the marketplace. The strength of your brand can be measured as Reputation X Visibility.

There is another important dimension of your brand as well: how relevant it is to your target client audience. More about that later.

A 10-Step Brand Development Strategy

1. Consider your overall business strategy.

A strong, well differentiated brand will make growing your firm much easier. But what type of firm do you want? Are you planning to grow organically? Your overall business strategy is the context for your brand development strategy, so that’s the place to start. If you are clear about where you want to take your firm, your brand will help you get there.

2. Identify your target clients.

Who are your target clients? If you say “everybody” you are making a very big mistake. Our research clearly shows that high growth, high profit firms are focused on having clearly defined target clients. The narrower the focus, the faster the growth. The more diverse the target audience, the more diluted your marketing efforts will be. So how do you know if you have chosen the right target client group? That’s where the next step comes in.

3. Research your target client group.

Firms that do systematic research on their target client group grow faster and are more profitable (see figure below). Further, those that do research more frequently (at least once per quarter) grow faster still.

Research helps you understand your target client’s perspective and priorities, anticipate their needs and put your message in language that resonates with them. It also tells you how they view your firm’s strengths and your current brand. As such, it dramatically lowers the marketing risk associated with brand development.

4. Develop your brand positioning.

You are now ready to determine your firm’s brand positioning within the professional services marketplace (also called market positioning). How is your firm different from others and why should potential clients within your target audience choose to work with you?

A positioning statement is typically three to five sentences in length and captures the essence of your brand positioning. It must be grounded in reality, as you will have to deliver on what you promise. It must also be a bit aspirational so you have something to strive for.

5. Develop your messaging strategy.

Your next step is a messaging strategy that translates your brand positioning into messages to your various target audiences. Your target audiences typically include potential clients, potential employees, referral sources or other influencers and potential partnering opportunities, to name a few of the usual suspects.

While your core brand positioning must be the same for all audiences, each audience will be interested in different aspects of it. The messages to each audience will emphasize the most relevant points. Each audience will also have specific concerns that must be addressed, and each will need different types of evidence to support your messages. Your messaging strategy should address all of these needs. This is an important step in making your brand relevant to your target audiences.

6. Develop your name, logo and tagline.

For many firms, a name change is not required. But if you are a new firm, are undergoing a merger or are burdened with a name that no longer suits your positioning, a name change may be in order. Even if you don’t change your firm name, a new logo and tagline may make sense to better support your brand positioning.

Remember, your name, logo and tagline are not your brand. They are a part of your brand identity, the ways to communicate or symbolize your brand. You must live it to make it real.

And don’t make the mistake of showing the new logo around internally to get a consensus. The name, logo and tagline are not for you. They are for your marketplace and should be judged on how well they communicate, not how much the partners like them.

7. Develop your content marketing strategy.

We could have called this step “develop your marketing strategy.” But we didn’t. Instead we call for a content marketing strategy.

Why? Content marketing is particularly well suited to professional services firms in the Internet age. It does all things traditional marketing does but it does them more efficiently. It uses valuable educational content to attract, nurture and qualify prospects.

Remember that your brand strength is driven by both reputation and visibility. Increasing visibility alone, without strengthening your reputation, is rarely successful. That’s why traditional “awareness-building” advertising or sponsorships so often yield disappointing results. On the other hand, content marketing increases both visibility and reputation at the same time. It is also the perfect way to make your brand relevant to your target audiences. Case closed.

8. Develop your website.

Your website is your single most important brand development tool. It is the place where all your audiences turn to learn what you do, how you do it and who your clients are. Prospective clients are not likely to choose your firm solely based on your website. But they may well rule you out if your site sends the wrong message.

Further, your website will be home to your valuable content. That content will become the focus of your search engine optimization (SEO) efforts so that your prospects, potential employees, and referral sources will find you and learn about your firm. Online content is central to any modern brand development strategy.

These days, professional services websites come in two varieties. The first is a branding site. Such a site tells your story and conveys who you are, who you serve, and what you do. In short it conveys your brand message. The other variety does the above and also generates and nurtures potential new clients. We call these High Performance Websites.

9. Build your marketing toolkit. 

The next step in the process is to build out the remainder of your marketing toolkit. This might include one-page “sales sheets” that describe core services offerings or key markets served. In addition, there may be a brief “pitch deck” that overviews the firm or key offerings and an e-brochure about the firm. These are rarely printed pieces anymore.

Increasingly this marketing toolkit also includes videos. Popular video topics include firm overviews, case studies or “meet the partner” videos. Key services offerings are also very useful. If prepared appropriately, these tools serve not only a business development function but also are important for brand development.

10. Implement, track, and adjust.

This final step in the brand development process may be one of the most important. Obviously a winning brand development strategy doesn’t do much good if it is never implemented.  You might be surprised at how often that happens. A solid strategy is developed and started with all the good intentions the firm can muster. Then reality intervenes. People get busy with client work and brand development tasks get put off… then forgotten.

That’s why tracking is so important. We strongly recommend tracking both the implementation of the plan as well as results. Did the strategy get implemented as planned? What happened with the objective measures, such as search traffic and web visitors? How many new leads, employee applications and partnering opportunities were generated? Only by tracking the entire process can you make sure you are drawing the right conclusions and making the right adjustments.

There you have it — a 10 step brand development process to drive the growth and profitability of your firm.

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A Brand Development Example

Let’s consider the following real-world example of brand development. Heller Consulting is a technology consulting firm for nonprofits that approached Hinge when their marketing program was not delivering the results they desired. As a brand, they struggled to define themselves in the marketplace. 

We began our engagement with research  to understand how Heller was perceived by their prospects and clients. One discovery from this research was that their brand had unintentionally developed a narrow reputation as fundraising technology experts. They wanted to be known for more. With this brand research in hand, we were ready to proceed to the next phase of the brand development process.

We used what we learned about their firm’s strengths and how they compared to the competitive landscape to develop a set of key differentiators. This exercise led to the development of a compact positioning statement and persuasive messaging they could use in all their marketing materials. 

One of the key areas where this new marketing language needed to be reflected was on the Heller website. Hinge helped Heller redevelop their website for an improved user experience and to incorporate they new positioning and messaging. We also made it easier to find and consume their thought leadership—gating the most valuable content to help turn web visitors into leads. It was now easier than ever for Heller to be identified and known as a thought leader in their space.

The results? Heller experienced a 400% increase in website conversions and a 50% increase in organic search traffic after a two year period. “Hinge gave us the foundation for a powerful, long-term marketing program,” said Heller COO Smita Vadakekalam. 

The post A 10 Step Brand Development Strategy for Your Professional Services Firm appeared first on Hinge Marketing.

These are excellent questions — and we hope you are asking them early in the process. They don’t, however, have simple answers. After all, your situation may be very different from someone else’s: the sizes of the companies involved in the transaction, the delta between their cultures, differences in business models and the procedures an organization puts in place to handle the transition can dramatically affect the outcome and timeframe of an integration.

Let’s begin with the question of time. 

How Long Will it Take?

Assuming the two engaged organizations are able to coalesce and coexist, how long before they are cooperating and working as one? If the deal is a simple acquisition of a smaller firm that does essentially the same thing as the larger firm (for instance, a regional law firm that buys a small practice in another town), the culture shift may be fairly small and the friction minimal. The two firms could be working together with relative cohesion within a couple of months. 

If, however, the differences are larger, or if the companies involved are complex, it can take up to three years for all the dust to settle. But even in the most complicated circumstances, some order should be emerging in the first 90 days, and the new organization should be seeing tangible progress within six months. In the majority of cases, the integration will be producing the expected efficiencies and synergies by the end of the second year, if not sooner.

Next, let’s discuss what metrics you might monitor to determine how your merger or acquisition is performing.

10 Measures of M&A Success

To a large degree, how you define success going into a deal will determine the way you measure it. So much depends on what you expect out of the merger or acquisition. For instance, if your expected outcome is access to a new market, you’ll likely want to keep an eye on regional sales and indicators of increased visibility in that region. If, on the other hand, you bought a firm to add new expertise to your portfolio, you’ll obviously want to monitor interest in, and sales of, those services. But you also might also want to look at utilization in that practice area, as well as overall firm profitability.

No matter what you expect from your merger or acquisition, you’ll want to track multiple metrics—beyond your primary objectives. Here are 10 common ways you can assess the success of your integration:

1. Number of clients. Consider tracking this number across your entire firm (in case there is a halo effect that benefits multiple practice areas), as well as for the specific area of your business that has changed.

2. Revenue. There is no reason to go through the significant trouble of M&A if it doesn’t make you money. Again, look at both the whole firm and the affected business unit(s). With so much change in the organization, it’s easy to take your eye off of the business development ball.

3. Revenue per client. Are you now able to attract larger, more valuable clients?

4. Run rate savings. Your run rate is simply an extrapolation of your current revenues and expenses into the future. Plot your actual and expected run rates on a synergy curve and track the results over time. How quickly are you seeing the benefits of synergy? Most successful integrations completely realize these efficiencies within two to three years.

5. Cross selling of services. A well integrated firm will be able to upsell and cross sell services. How often are your other practices referring and selling the new services?

6. Cash flows. Has the merger or acquisition facilitated or impeded your flow of cash? A successful integration should have a very positive effect once you have achieved synergy.

7. Client complaints. M&A activity can wreak havoc in a once-smoothly running organization. Keeping a log of client complaints is a good way to understand the scope of the problem — and pinpoint the areas you need to address most urgently.

8. Quality of new clients. Quality can be a subjective measure, but it can give you a sense of which direction your M&A activity is taking you, especially if you have a pre-M&A benchmark to compare against. One way to measure quality is to score a client on a 1-5 scale across a handful of factors, such as: 1) Do they pay on time?, 2) Are they easy to work with?, 3) Do they allow you to do exceptional work?

9. Level of staff stress. Has the merger or acquisition made working at your firm more difficult on your staff? Are managers and HR fielding more internal complaints? Are people taking more sick days? Are they working longer hours to compensate for the distractions of an evolving organization? Is the office atmosphere more tense than usual? It’s not unusual for the level of stress to increase in the months following a deal, but you should be taking measures to mitigate those issues over time.

10. Staff turnover. Depending on the nature of the integration, you may or may not expect people to leave the organization. If the merger or acquisition created redundancies, then staff departures were probably part of the plan from the beginning. The worst outcome, however, is when unforeseen circumstances — often clashing cultures — compel top talent to leave the firm. Closely monitor this trend from the very beginning. It can sink a promising integration like a torpedo.

Whatever your reason for considering a merger or acquisition, be sure to define clear expectations for the deal. Set quantifiable goals — objectives that can be measured and monitored along the way. Then track your progress as you roll out your integration plan. Do you need to make adjustments? Is there a major problem (like the departure of key staff) that requires emergency triage? If you aren’t looking, you will miss many of the early warning signals. And if you are a firm that plans to grow through acquisitions, measurement helps you learn from your mistakes.  

Free Resource

The M&A Guide for Professional Services Firms

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The post How to Measure M&A Success appeared first on Hinge Marketing.

How do mergers and acquisitions impact a firm’s brand (maybe even multiple brands if we’re talking about a “house of brands”), marketing and business development? Let’s explore some of the challenges and opportunities that may be in store.

Mind the gaps

Mergers and acquisitions bring all kinds of operational opportunities and challenges to the table. In this post, we’ll focus on strategic M&As from the perspective of branding and marketing. While a merger or acquisition can be a path to growth, teams must be vigilant to avoid introducing new problems that might damage a firm’s reputation or open up rifts between internal teams. Speaking of rifts, owners and the managers responsible for implementing the M&A process may have very different expectations for the resulting brand. This misalignment of vision can set up unnecessary tension and distraction early on, slowing down integration and leaving opportunities on the table.

When owners and key leadership teams develop their M&A strategy, they often focus on key benefits like:

• Operational efficiency: Is the consolidated organization in a stronger position to streamline operations and reduce expense?
• Business development: Do new teams provide access to untapped markets or better positioning throughout the lifecycle of projects?
• Talent and infrastructure: Would a merger or acquisition bring compelling additions to leadership and expertise? Fully functional teams also reduce the need for costly training and mentoring.

Directors and practice leaders may not hear about potential M&As until negotiations are nearly complete — or already a done deal — so they may focus on more downstream concerns, such as:

• Cultural alignment: Do combined teams share the same cultural values? How will we all get on the same page?
• Clear communication: How will we message this merger or acquisition to current and potential clients? What about recruits? Will we lose our focus or create market confusion?
• How are we going to update our brand identity materials?: There are a lot of branding projects to consider when teams join forces. Business cards, collateral, email signatures, website, event materials, IT, signage — the list goes on and on.

Both perspectives are valuable, so it is important to clearly define expectations and prepare your teams at the earliest practical point in your M&A branding and marketing adventure. They will have plenty to think about.

Market perception

Mergers and acquisitions are creating larger and more complex organizations with broader reach and more diverse services. In theory, the resulting firm can do things neither of its component companies could do before. In reality, however, many mergers and acquisitions produce poorly differentiated brands that lack the focus, personality or market appeal of their progenitors.

Hinge’s most recent professional services buying behavior research has shown that buyers prefer professional services firms that specialize — usually in either the buyer’s industry or the specific problem they need to solve. This preference for specialists presents a challenge to any firm that is drifting toward a more generic brand perception.

A plan that works

The good news is that with some planning, firms can navigate M&A branding challenges and benefit from the strategic opportunities a merger or acquisition presents. First, think about the audiences you will be addressing.

• Internal audiences: From business-unit and company-wide leaders to subject matter experts, your executive team needs clear brand and positioning guidance. Focus first on people in your organization who have the most contact with current and prospective clients, then work inward. Paint a clear picture of your consolidated brand’s new position in the marketplace and how you will address the inevitable questions and objections. Client-facing teams will have to explain and defend the new brand, so be sure you develop the appropriate tools and training they need. In short, equip your team to be compelling advocates.
• External audiences: Even with the best training and tools, internal teams will have limited reach when it comes to explaining your brand’s recent evolution. M&As introduce new teams, services, sometimes even completely new business models — so it is important to update your external communication tools to reflect the new firm. Without a strong message that explains your transformation, your audiences may come up with their own narrative, and it may not be a flattering one. Be prepared to control the message from the beginning. A press release alone may not be sufficient to define the newly coalesced company. A more sophisticated launch strategy may be required.

Now that we’ve divided our initiatives into the highest-level audiences, we work toward an objective understanding of overall brand equity and prioritize any key roles within those groups. What are the biggest questions and objections to address inside your organization and outside?

Example Internal Objections:

• How does our org chart change?
• Do our responsibilities change?
• Now that we have two teams that do X – who do I go to?
• How do I refer to our brand?
• When is our branded material going to be updated?
• Am I still going to have a job?

Example External Objections:

• Are my contacts and services going to change?
• What about “X” – isn’t that a conflict of interest?
• Who bought whom? What’s the relationship between the brands?
• Is leadership changing?
• What else do you do now?
• Now you’re the same as “X-generic-brand”.
• What does this mean for my project?
• Will we receive the same level of service?
• I’ve never heard of your brand. Are you new?

One of the best ways to get an objective view of your brand’s perception is to research your target audience. Interviewing clients and prospects will help you to identify objections and prioritize your messaging. Perhaps more importantly, you may uncover what values and traits resonate with specific audiences. Keep in mind that the validity of your results depends on the quality of your survey design and the experience and perceived impartiality of your interviewers, so this may not be the place to do it yourself.

When designing a baseline study, it pays to think about the future, too. Will you be repeating this research later to determine if you’ve actually achieved your marketplace perception and visibility goals? If so, design your study questions carefully so they make sense in the context of both an initial survey and a follow-up study. Using the same instrument, you can produce a valid, apples-to-apples comparison.

Internal team perspectives matter too. It’s a great idea to use a marketplace study as an opportunity to also “take the temperature” of your internal teams. You will be able to compare internal perceptions to external ones, which can show you how well attuned your people are to your clients’ perceptions. And the more involved teams are in your overall positioning discussion, the more likely they are to buy into the new strategy. I’m not advocating a committee consensus approach (that pretty much guarantees a long and torturous process), but by building a process that encourages internal input, the M&A branding process can be positive, inclusive and insightful.

When establishing an objective baseline, your firm also has the opportunity to assess relative brand strength to help determine next steps and prioritize communication efforts. For example, if a newly acquired firm has very little brand recognition in the marketplace, the faster it is incorporated in the stronger brand, the better. Chance are, this will take less investment than if that same firm was highly visible and had a strong reputation on its own. It’s a lot like physics – a stronger incoming brand will require more effort to offset existing brand perceptions and educate audiences about your new brand configuration.

Using your initial assessment of the merging firms’ brand strengths, your team can develop an appropriate milestone schedule and budget for implementation. If mergers and acquisitions are part of your firm’s ongoing growth plan, it would be worth the effort to create implementation plan templates for typical brand strength scenarios.

A few high-level examples:

• Plan 1 – Small brand with little visibility and reputation
  • Fast integration schedule– focusing on internal training, maximum cost efficiency and promoting the value of its more visible brand assets.
• Plan 2 – Medium brand with regional visibility and reputation
  • Moderate integration schedule– balancing cost efficiency with clear internal and external communication programs and local visibility campaigns.
• Plan 3 – Larger brand with national or international visibility and reputation
  • Longer integration schedule – considering pre-integration campaign, brand rollout, and post-integration campaign.

In addition to laying out clear implementation milestones (are teams executing the plan as intended?), any plan should outline key visibility and engagement metrics so you can evaluate your progress and make adjustments along the way. Keep in mind that the longer the integration schedule, the greater the chance that market changes will move your goal posts.

Regular reporting and discussion around these metrics have secondary benefits, too: they support internal team engagement and help to improve moral and retention. Don’t forget to keep your internal teams informed about changes to your positioning or messaging. Tying your goals and progress back to internal survey findings are also a great way to show teams that they have been heard by leadership.

Once you’ve launched your newly integrated brand, consider scheduling another brand perception study a few months out to see what affect your merger or acquisition has had on your buyers. An impact study is also a valuable tool for internal team communication. Typically, it will provide areas to celebrate success and progress – and highlight areas that require continued focus and training.

Strategies and tools

A thoughtful M&A plan should not only set the goal posts, it should identify the specific initiatives and tools you’ll need to carry it out. The most successful mergers and acquisitions anticipate and plan for every detail. Here are some things to think about as you develop your plan:

Consider overall ROI: What if your firm has been growing through M&A but has skipped the step of integrating or absorbing the brands? In this “house of brands” scenario, businesses may be left to operate profitably with relatively little obvious influence from the purchasing firm. Keep in mind that there is a cost to maintaining separate brands, and doing so does little to enhance the reputation of the purchasing firm.

Based on Hinge’s industry research, smaller firms typically spend a higher percentage of revenue on marketing and business development efforts for the same return. When multiplying this higher relative cost across brand, there must be a strong case and value attached to maintaining individual, specialized brands that must remain specialized (consider Proctor & Gamble’s house of brands, for instance).

Source: 2019 High Growth Study: All Professional Services Edition  

Position clearly: Maintaining a clear positioning strategy anchored by compelling firm-wide differentiators is crucial for any professional services firm. But it can be even trickier for firms going through the M&A process. In an M&A situation, the positioning strategy of one or both firms may change — potentially radically. So make sure you can come out of the process with clear and compelling differentiators.

Incorporate employer branding: Attracting and keeping top talent is critical during and after the M&A process. Opportunities for professional growth, team mentorship, investment in personal branding and company culture will continue to be important factors, so don’t overlook them.

Build an M&A friendly website: A professional services firm’s website is one of its most visible and engaging brand assets. And it should support and reflect your firm’s growth strategy. A website that supports M&A fueled growth should be easy to update and flexible enough to support incoming teams and brand assets.

Lean on social media: Your firm’s website might be the hub of its online presence – but what about the spokes? Social media and backlinks from qualified publications are powerful visibility builders. During times of transition, these networks can also help educate audiences on new capabilities, teams and the ongoing evolution of your brand.

Build M&A friendly collateral and pursuit systems: Just like your firm’s website, collateral and pursuit tools like qualifications decks, proposals and interview kits should be designed with flexibility in mind. A well-designed system will accommodate new content, teams and transitional branding without a lot of help from outside vendors.

Have a plan for CRM and automation tools: Move to quickly incorporate business process that involve CRM and link to automation tools. Effective training processes, regular reporting and encouragement are key. The reward is real-time feedback on the impact of brand integration efforts. New teams bring new ideas and exposure so it’s important that information flows both ways during the training process and your CRM and automation tools are flexible enough to adapt new naming conventions business development stages.

Keep your ear to the ground with analytics: Online analytics tools like Google Analytics and SEO research tools like Moz and Ahrefs allow you to measure and adjust during the M&A process. Pay close attention to engagement metrics and user flow to understand friction points. While analytics are always valuable to any business, they are especially important to get right during brand transitions.

Wrapping it up

The last strategy I’ll share might be the most important — have fun! It’s easy to feel overwhelmed by the logistics of positioning and branding two firms during the M&A process, but each transition is an opportunity to re-evaluate what makes your brand valuable. It’s a chance to reinforce that message with internal teams and make sure everyone is rowing in the same direction. It’s also a chance to gather your teams’ input on important strategic branding decisions and surface new opportunities that might not even be on your radar. Help teams focus on the potential created by their combined strength and avoid crippling uncertainty and distraction.

Free Resource

The M&A Guide for Professional Services Firms

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The post M&A Branding and Marketing: Threats, Opportunities, and Strategies appeared first on Hinge Marketing.

As new firms emerge, they must establish a unified identity and brand message to differentiate from both competitors and earlier iterations of themselves.

Don’t sink before you leave the slip

When going through a merger or acquisition, leaders tend to focus on the quantifiable aspects of the transaction, such as financial models, tax implications, and employment contracts. However, it is important for firms going through a merger to establish a unified brand message that aligns with the new business strategy. When firms do not prioritize or consider their brand message they undermine and may sabotage the success of an M&A growth strategy—they sink the ship before it gets a chance to set sail.

Mergers and acquisitions present great opportunities for firms to rethink and refresh their brands. The manner in which a firm creates its new brand message after a merger provides insight into the new entity and how the unique aspects of the separate firms and cultures come together to create an “enhanced” organization.

Chart your course thoughtfully

It’s not an easy task to combine two company cultures to arrive at a unified brand with a common culture and brand message. The leaders of each firm must agree on a new brand that accurately reflects the combined strengths, differentiators, and value propositions of the united organization.

We recommend firms begin the process with a strategic planning session, during which leaders discuss and agree on the strategies and tactics for integrating all aspects of the merging firms, including operations, marketing and culture.

There is always a lot to cover. Here are a few examples of the marketing and branding decisions that should be made during the strategic planning session:

• Whether or not to rename the firm, adopt a new logo, or to co-brand
• The underlying brand position and how it will support immediate and long-term business goals
• Which key differentiators to highlight in marketing communications
• How marketing budgets and resources will be allocated
• What client retention strategies to implement

Row in the same direction

To avoid internal discord, spend time communicating with and listening to key stakeholders and representatives throughout the new organization. If everyone is “rowing in the same direction,” you will speak in a unified voice and be able to speak about the new organization—what it is and what it represents.

To gain maximum support and buy-in for the new brand message it’s best to get everyone involved early. Create an atmosphere of inclusion, in which people feel they can be heard and their voices matter. Not all opinions can be included, but people will know that the firm’s leadership listened to and considered their perspectives.

Don’t get caught without a paddle

Once a new brand message has been established, equip everyone in the organization with the knowledge and tools they need to communicate the message consistently. Leaders in marketing and communication can serve as key points of contact for educating the entire organization on how to speak on behalf of the firm.

The firm’s brand message must include the consistent application of the visual brand in all marketing and collateral pieces, including sales materials, brochures, pitch decks, and the firm’s website.

Land Ho

As you combine teams, provide your employees something to rally around and get excited about. Inspire their enthusiasm for the new brand by making internal communications a priority.

Consider throwing an internal launch event for employees and share the new brand message and materials with everyone. Explain key dates for external brand launch. Let them know what happens next, so everyone is on the same page when the new brand is fully in place. Keep employees at all remote locations informed as well. If it’s not possible to do this in person, plan to send regular communications like email newsletters from members of the executive team to keep everyone aware of what’s happening.

Don’t forget to tell your mates

Of course, you can’t forget your clients. Focus your rebranding efforts on your core brand message and positioning. Establish compelling differentiators and proof points so clients understand how they’ll benefit by working with you—how you will help them solve their problems.

Clients want to know that the merger will make their lives easier, not just grow the size of your business. Communicating the reasons for and vision of the merger is important for keeping clients as you merge.

Changing tides

Timing is critical when establishing a new M&A brand message. Moving quickly to energize staff, give clients confidence, and generate buzz about the transaction. To best leverage the communications opportunities, you must engage internal and external audiences from the start.

Establishing a new brand message due to a merger or acquisition can be a daunting process but when you plan well and communicate effectively it can present a golden opportunity to unify cultures, improve client relationships and strengthen a firm’s position in the market.

The post How to Convey a Unified Brand Message After a Merger or Acquisition appeared first on Hinge Marketing.

Post-merger or acquisition, most leaders are focused on the quantifiable steps of the integration such as cutting costs and streamlining efficiencies. While that’s all well and good, I’m going to walk out on a limb here and suggest a slightly novel prioritization of tasks – why not put your people first in an M&A integration checklist?

At professional services firms, people are your product and, to invoke a cliché, your most valuable asset. But what does that mean?

Your firm’s singular mix of talents, personalities, skillsets, and leadership are key components of your brand and contribute to your reputation. As you integrate with a new entity, it only makes sense to preserve the best parts of the culture you have worked so hard to establish.

Here’s a merger & acquisition integration checklist that starts with your people, as it’s critical to retain their loyalty and expertise.

1. Culture.

If you are undergoing a merger or acquisition, you’re in a bubbling cauldron of change. Whether two cultures are co-mingling, or one has literally acquired the other, there are probably more similarities than meet the eye. Suppose two competing industry giants are thrown together. Chances are, their missions resemble one another, but the expectations set by management are very different.

If a merger or acquisition is to succeed, a new culture must emerge. If you look for the best elements of both cultures you can develop a workplace that is both familiar and fresh to everyone. But how do you uncover these elements?

A little internal research can go a long way. Survey your employees and identify the common themes in each group. Ask what they liked most and least about their work environments, the way they delivered services, and their firms’ management styles. Compare the responses and themes from both organizations. Then see if you can develop a culture that includes elements of both.

While it may be impractical to build a new internal culture from scratch — one organization’s established culture is likely to dominate — the merger or acquisition is much more likely to be successful if you can accommodate all parties to some extent.

2. Employer brand.

Your recruiting and retention efforts have never been more important. In a time of change and competing priorities, how do you ensure your employees feel valued and supported? Happy employees provide quality service, while disgruntled employees can be less committed to that end result.

After a merger or acquisition, usually one of leadership’s first thoughts is to cut costs. This instinct to take away is what threatens employee morale, work product, and client experience. Why not focus instead on the employee experience and retaining your best people?

Don’t rush to decisions — listen to your employees and what is important to them. And never take the small things for granted. Work-from-home Fridays or hybrid work opportunities might be the reason many people took the job and taking away that perk might be the reason they leave. If your employees feel they are at risk of losing the parts of their job that they value the most, you’ve got a tough road ahead of you.

And just as it’s important to retain people, it’s important to recruit, too. No one wants to work for a company that has a revolving door of talent. Constant turnover is not attractive to potential candidates as it is a sign of instability and turmoil. The employer brand you portray now will directly impact your ability to scale.

3. Internal Comms.

Be the liaison your firm needs you to be. Your goal should be to build a culture of transparency and rapport. How — and how clearly — you communicate now will play a direct role in the success of the integration.

Do yourself a favor and don’t skip over the introductions. It’s critical that your new family operates as one — and that a close-knit dynamic doesn’t happen overnight. The key is to make sure you are covering your bases. Nothing can be more detrimental than if one part of the firm feels favored over the other.

Storytelling can be a powerful tool. Each organization needs to learn about the other, so consider asking each side to share stories about notable client engagements and important internal events — whatever experiences will help the two parties coalesce and bond. How you share these stories will depend on the size and structure of the firm, but try to encourage individuals to tell stories in their own voice, whether spoken or written.

And make sure your communications are thoughtful and strategic. Your plan won’t work if your message is unclear and doesn’t deliver the intended impact.

4. Branding and marketing.

Unless a merged or acquired firm is taking on the identity of the dominant brand, a merger or acquisition presents a great opportunity to reposition your firm or do a brand refresh. But first, you need to understand how the two firms are perceived in the marketplace and internally amongst employees. Brand research can identify opportunities in the marketplace that will inform your new positioning. Use the occasion to strengthen your reputation and increase your visibility. A stronger brand will resonate not only with your clients but also with your own employees – moving your closer to that unified brand culture.

5. Business Development.

If you don’t shape the narrative about your firm, your clients will create their own story, one that won’t necessarily reflect who you are. Make sure your people are on the same page and are saying the same thing. Identify messages for each of your audiences and equip your business development team to answer the hard questions.

6. Processes and procedures.

It’s no accident that I’ve saved this one for last. Only after the integration is complete will you know what operations and procedures you need to support your marketing objectives and culture. While a lot of effort and expense can go into the operational systems and procedures, their impact is often overestimated. When the post-merger integration is complete you want to end up with systems and processes that support your strategy, marketing objectives, and culture. They may come from either firm.

People are the building blocks of every professional services firm, so you’ll want to make sure they are taken care of. While leadership will always remain focused on the quantifiable aspects of a merger or acquisition, you can undermine the success of an M&A growth strategy if you don’t put your people first. Without the right people — happy, highly motivated professionals — the integrated firm isn’t likely to achieve the efficiencies and synergies that the merger or acquisition promised. But if you take these six factors into account, your odds of success improve dramatically.

Free Resource

The M&A Guide for Professional Services Firms

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The post An M&A Integration Checklist for Professional Services Firms that Puts Your People First appeared first on Hinge Marketing.

When most people think of a company’s brand, the logo is usually the first thing that comes to mind. However, redeveloping a brand goes beyond simply redesigning an icon or word mark.

In this blog, I’ll review the different scenarios that can call for a brand refresh or redesign. I’ll also identify several components of effective brand management to consider along the way.

When is it time to revisit the branding process?

1. When you’ve gone through a merger or acquisition

M&A activity continues to be brisk, and if your firm hasn’t been part of a merger or acquisition yet, some of your competitors likely have. Some firms are turning to M&A as an alternative recruiting tool in a competitive labor market, and large-scale complex projects are driving the demand for similarly large and diverse organizations to service their needs. Expanding service portfolios have led to inconsistent messaging and diluted positioning. On the other hand, well-planned, strategic mergers have created powerhouse players in an already crowded playing field. In most cases, the need for a rebrand is obvious (for instance, the merger of two firms with different brands), but sometimes the need to re-position is not as clear cut – such as the emergence of a new competitive advantage, a significant new service line, or the addition or loss of a highly visible expert.

2. When you’ve changed your firm’s service offerings or target market

It’s common for professional services firms to evolve their service offerings as they embrace new audiences or expand their geographic reach. But a change in a firm’s services, markets or even where they operate can dilute a firm’s differentiators. In rare instances, a change in services can be for the better, giving a firm a stronger hand as it positions itself against poorly differentiated competitors.

3. It’s long overdue

For many professional services firms, brand management is an afterthought. Before you know it, you can’t remember the last time you thought about your brand positioning and whether you are still headed on the right track. It’s a good idea to re-evaluate your positioning every 4-7 years, using some fresh research to take the pulse of your marketplace. These insights will inform the adjustments you need to make.

Next, let’s look at a few of the most critical elements of a successful brand. From brand identity to brand promise to a firm’s personality, redeveloping a brand is an opportunity to not only differentiate your firm but to turn your brand into something that people can see and experience. You can think of your firm’s brand as the product of its reputation and visibility in the marketplace: so successfully rebuilding a brand requires that you consider the key elementsthat factor into this equation.

For instance, your brand identity speaks to the visual elements that communicate your brand, such as your tagline and colors. But it’s your name and logo that are perhaps the most memorable.

What’s in a Name?

In the world of professional services, a firm’s name can help it stand out from its competition. A good name is easy to remember and won’t be confused with any of your competitors. In most cases, a name change is likely not required, but if you are a new firm, have changed your positioning, are undergoing a merger, or are recovering from an unfortunate PR situation, a name change might very well be in order. But before you go the great lengths to change your name, consider a new logo or tagline to support your new positioning and personality.

Let Go of Your Logo

Is your logo up to par? Does it reflect your brand personality? Does it look out-of-date? Is it memorable? Logo redesigns signify change, and change can be a scary thing. But your logo is one of the first aspects of your brand that prospects are likely to see and serves as a familiar touchpoint throughout their experience with your firm. Your logo will appear on every piece of marketing collateral you produce, from your website to signage to your proposals. The visual expression of a brand suggests to buyers that a firm is credible, established and different from otherwise similar firms. When conditions warrant a change in your brand, a logo redesign is well worth the effort.

Brand Positioning

What truly makes a brand successful and elevates it above the competition? Strong positioning. Your brand has to stand for something, and in turn, its positioning must accomplish three things:

1. Be different
2. Be focused
3. Be relevant

A brand that stays relevant, focused and differentiated will attract buyers’ attention and have a distinct advantage in the marketplace. The problem most professional services firms experience is that they offer a myriad of customized services that are hard to define. A positioning statement can help define your marketing messages and the services you offer — translating and communicating complex information into something more tangible. But by uncovering your firm’s fundamental purpose, and tying each service back to that foundational idea, you create a lasting emotional connection with customers that fuels growth, reputation and visibility.

Is it time to reimagine your brand? That may or may not be an easy question to answer. At the very least, I hope this article has inspired you to look at your firm’s brand with clearer eyes. Certainly, a brand refresh requires an investment of money and time. But in the right circumstances, it can provide much needed momentum and compel people to think about your firm in a new way.

Free Resource

The M&A Guide for Professional Services Firms

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The post When Is it Time for a Brand Refresh? appeared first on Hinge Marketing.

Today, we’re going to talk about five top measures of M&A success. In 2020, the fundamentals continue to look strong so we can expect quite a few more M&As in our industry.

TRANSCRIPTION:

Today, we’re going to talk about five top measures of M&A success. In 2020, the fundamentals continue to look strong so we can expect quite a few more M&As in our industry.

Everything from tight talent to succession planning as baby boomers are looking to retire, or other strategic considerations continue to play a part. For this discussion, we’re going to assume that your firm is somehow involved in a merger or acquisition. And thinking about Hinge’s perspective on brand and marketing strategy integration, we’re going to focus on some simple factors for success.

First, let’s talk about the overall pool of clients. Whichever side of a merger you’re on, it’s important to look at how many total clients you have, how many have been added by the new firm configuration, how many competitive relationships have been resolved. Is client retention remaining stable for the first year or two?

This can be a great high-level post. Next, let’s think about the cross-selling of services. This is often a starting place for strategic mergers and acquisitions. So there’s often an opportunity to add new offerings whether it’s in a form of services, tech, or newly combined infrastructure. This often has a direct line to incremental revenue, so it’s a great idea to track some of those metrics specific to cross-selling success.

Next, let’s talk about revenue per client. Now of course, overall revenue is important. But keeping track of revenue per client pre and post-merger can be a telling indicator of client confidence, efficiency, and as cross-selling opportunities that we just talked about. Client experience is really important in a merger or acquisition. By nature there’s a lot of change going on.

So it’s important that you develop a clear communication and support plan for clients, and regularly monitor their experience in a systematic way. Now, last but not least, employee experience is really important too, how are our teams doing internally? Considering that new talent is often a key value considered in a strategic merger or acquisition, it’s important to create or emphasize those techniques and tools that monitor teams’ experiences and apply efforts to retain the best talent.

It’s important to remember that in an M&A situation, new recruits didn’t actually choose your combined firm like they would in the typical job search. Your firm chose them. So onboarding and support are often crucial to get the most value out of your newly combined firm.

If you’d like to learn more about this, I encourage you to check out hingeuniversity.com.

The post Top 5 Measures of M&A Success [Video] appeared first on Hinge Marketing.

Use this checklist to make sure you think about and address the scores of tasks that, if overlooked, can derail you later on. Note that this list does not include the many financial, tax and legal-due-diligence issues, as they can vary significantly from deal to deal. We recommend that you consult a qualified accountant and attorney to advise you on those aspects of your merger or acquisition. 

Let’s dive in!

Pre-deal Assessment

• Professional Valuation—Hire a qualified valuation expert to assess and value the firm(s) to be acquired or merged. Using an experienced outsider can remove much of the emotion and subjectivity from the process.
• Look for Hidden Costs—Do your due diligence. Are there any undisclosed financial costs—today or looming in the future—that aren’t accounted for in the valuation? For example, a roof that needs to be replaced, or a disgruntled client that is about to file an expensive lawsuit. 
• Attractive Financials—If you are trying to sell your firm, you are more likely to get a premium valuation if you can demonstrate several years of consistent growth—with all projections pointing to similar results in the future. “Lumpy” revenues can be a turnoff. Your ability to show healthy profits over the same period also be important. Finally, make sure you don’t have a lot of unnecessary overhead that will make the deal more expensive than necessary.
• Differentiation—When considering a potential acquisition, assess the target firm’s differentiation in the marketplace. Does it offer anything unique or of strategic value?
• Risk Mitigation—Do your best to identify the potential risks of the deal. What happens  if the promised benefits fail to materialize? What if the two teams can’t get along? Is there an escape hatch if the integration—despite heroic efforts all around—just doesn’t work? Once you’ve identified the major risks, develop realistic contingency plans to handle each of them.
• Organizational Structure—What will the post-deal company look like from a management, structure and personnel perspective? Go ahead and map it out, knowing that some key details may change. It will help you identify potential redundancies, job title problems, structural problems and other issues.

Download the M&A Guide for Professional Services Firms

Plan for Integration Challenges

Bringing two disparate groups together is fraught with potential complications. Raised with different cultures, management styles and expectations, they are likely to eye each other with suspicion and even a little fear, at first. 

• Cultural Differences—How different are the two cultures? It’s important to understand this critical factor before agreeing to a deal—if the cultures are too different they could be impossible to reconcile. In fact, cultural incompatibility is one of the biggest reasons mergers and acquisitions fail. That’s why it’s important to focus more on cultural differences than similarities in the two groups.
  
  Once you’ve determined the two groups are likely compatible, you then need to figure out how you are going to unite the two cultures. A merger or acquisition can be the ideal time to initiate cultural changes, as the employees are already primed for change. And it’s a perfect opportunity to introduce a new set of values to the firm.
  
  These values, however, have to be manifested in countless small ways: how and when you celebrate people’s successes, how you deal with failure, how much flexibility you offer, how you make decisions, how people dress, how people collaborate, how people disagree, how meetings are conducted, how much responsibility people have, how (and if) they are held accountable… the list goes on and on. Don’t expect to change everything at once. Look for the most glaring differences between the two groups and start there. Then build more bridges over time.
• Contrasting Management Styles—Depending on the nature of the deal, management style may or may not be a significant issue. 
• Layoffs and Reassignments—If layoffs will be required, start planning for them early—you’ll be better prepared to develop internal messaging and answer staff questions. While you may not be able to determine every likely personnel change at this stage, you should be able to draft a preliminary list.
• Compensation Differences—Compensation models, pay scales and pay cycles can differ dramatically at different firms, and they can create a lot of headaches down the stretch if you don’t plan ahead. Despite management’s best efforts, many employees discuss their pay, so inconsistencies and inequities will be noticed. Where one firm relies on a performance-based incentive system with a significant upside, another firm might offer only fixed salaries. The simplest approach—and one most employees would welcome, at least at first—is to keep everyone’s compensation the same (though you may need to synchronize everyone’s pay cycle). Then over time you can standardize the model. But every circumstance will be different, and you will have to evaluate your situation before deciding the best path forward for your organization and people.
• Job Titles—Reconciling the way job titles are handled between two uniting companies can be maddeningly complex. Unless you are lucky and job titles happen to align relatively neatly, you may be better off keeping most of them intact, at least until the new organization is more stable.
• Talent Retention—Is there anything in the deal or its aftermath that could trigger a brain drain? Address any concerns early-on, before the exodus begins.
• Uncertainty and Morale—Employee fear is a natural part of almost any M&A situation, and if left unaddressed it can create significant problems along the way. What you can tell whom, and when, during a merger or acquisition varies from deal to deal. But to the extent possible, err on the side of providing more information to employees as early as possible. Communicate how the deal will create new opportunities and benefits for staff, but don’t hide the potential downsides, too. Staff will want to know how the deal will affect them.
• Recruiting—Are there any roles you will need to fill right away? And will you be prepared to hire if top talent decides to leave the firm?

Address Employee Benefits

In an ideal world, you would simply take the most generous benefits from each company and make everyone happy. And that is exactly how many firms handle the challenge. If that approach is not financially viable, however, you will need to suss out the best compromises you can, understanding that you might lose some employees along the way. Be open about your challenges and, if practical, let people know early-on what the likely benefits package will look like.

• Health Plans—How different are the two firms’ health plans? Losing good insurance can be a deal-breaker for some employees. Can you afford to take on the better plan? Or is there an attractive compromise you can reach?
• 401 K—Determine how you will resolve differences in retirement plans. Retirement planning is a big deal to some workers.
• Other Benefits—Vacation, sick leave, flexibility, remote work options, paid parking—there are a multitude of benefits and policies that, if scaled back or revokes, could affect employee morale. Compare the two firm’s employee manuals so that you make decisions with your eyes wide open.
• Employee Manual—Start updating or replacing your employee manual so that these policies are documented for everyone the day the integration happens.

Download the M&A Guide for Professional Services Firms

Create a Communications Plan

How will you explain the deal to your employees and the world? If you don’t establish the narrative, others will fill the vacuum—with unpredictable results. Developing a communications plan pre-merger or -acquisition puts you in the driver’s seat and equips you with the messages you need to set up long-term success. Here are some key components of your plan:

• Audiences—The three most important audiences for your plan are: 1) employees, 2) clients, 3) prospective clients (and the rest of the marketplace). But you may want to consider other audiences, as well—for instance, influencers, referral sources, strategic partners or prospective employees.
• Key Messages—Begin by identifying each audience’s likely objections, then craft messages that overcome those objections and lay out a positive vision of the future.
• Communications Calendar—How will you communicate to each audience? When? How frequently? To answer these questions and add structure and accountability to your plan, create a detailed calendar that designates what dates, media and specific messages you will deliver over the course of the rollout. These are not loose guidelines—your communications calendar should be a prescriptive, day-by-day playbook. 

Plan for the Brand

Depending on the nature of your deal, the implications on your brand may fall anywhere on the spectrum, from having little effect to requiring a soup-to-nuts overhaul. Mergers, especially those that produce an all-new firm, are the most likely to need the full treatment. Here is a list of brand elements that may need your attention:

• Positioning—Does the deal change whom you compete against? What adjustments do you need to make to the way you describe your firm?
• Messaging—How does the merger or acquisition affect the messages you deliver to your audiences? Have your audiences changed? What about prospective new hires—is there anything different you would say to them?
• Name—If a new name is in the offing, tackle it right away. It will appear on everything to come. If you want to register your name with the Patent and Trademark Office (strongly recommended), keep in mind that it takes time to vet and clear it. Hire an IP attorney to help you.
• Logo—Will you need a new logo to differentiate yourself from the old firms and/or old competitors? Or do you need to make a few tweaks to a logo that still has legs.
• Tagline—Do you need to convey a new trait or message in your tagline?
• Collateral—From your pitch deck to the collateral that describes your services, chances are you’ll have some updates to make.
• Website—The merger or acquisition may be the excuse you need to redesign your website. Or at the very least, you’ll want to update key pages that discuss your capabilities, team and history.
• Brand Style Guidelines—If you make significant changes to your brand, be sure to capture them in a new set of brand style guidelines. That will help you preserve your brand investment and prevent its decay over time. If you are tweaking an existing brand, update your existing guidelines to document key updates.

Update Your Marketing Plan

You are undergoing a merger or acquisition for a reason. Now it’s time to profit from that significant investment. Determine what changes you need to make to your marketing approach and update your plan accordingly. Here are a few questions to ask yourselves as you retool your plan:

• Will you have new audiences? If so, how will you reach them? 
• Will you have new services, products or expertise? How will you promote them?
• Will the deal position you to enter new geographic markets? What’s your plan to raise your visibility in those markets and outflank established competition?
• Do you need to need to invest in new tools, training or personnel to accomplish your goals?

Download the M&A Guide for Professional Services Firms

Every M&A deal is different. While this list is a great starting place, it can’t cover every contingency. Most likely, as you do your due diligence you will encounter special issues that pertain to your situation. Add them to your list. You’ll be glad you did!

Did you notice anything missing from this list? Drop it in a comment below — if it fits our criteria, I’ll update this post to include it.

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