When a Masterbranded Corporation Acquires a Strong Product Brand

When a Masterbranded Corporation Acquires a Strong Product Brand

How to effectively transition brand equity when retiring a brand

We were recently asked how best to handle the brand transition when a strongly master-branded corporation acquires a separate, strong product brand in a space in which the corporation has no current awareness or equity.

Whenever a decision has been made to retire a brand and replace it with another, the key is to transfer as much of the equity to the successor brand as possible. Ideally, the new brand owners will know and appreciate the value of the acquired brand, because the communications program needed to sufficiently transfer the to-be-retired brand’s equity typically costs more than management expects.

We generally split the communications efforts for the brand transition between two fundamental audiences: Existing customers of the to-be-retired brand and competitor customers.

Communications to Existing Customers

The goal of the communications to customers naturally is to minimize the number of defectors to a competitor upon rebranding. This requires a careful and tailored program of communications to existing customers. In our experience, it is most effective to think about these communications in three stages.

Prelaunch. Whenever possible, the coming new look and feel of the product or service should be announced in teaser-like fashion several times in advance of actual brand cut-over to allow customers to catch a glimpse of, and get excited about, the new look and feel and learn about some of the additional benefits they might expect before finding out the new brand name (which should be left for the actual launch). The power of this is that customers are gradually introduced to a change and are given the option to see where it is going. More important, it allows the new brand owners to inoculate customers of the to-be-retired brand against a negative shock reaction from a sudden and unexpected switch-over (those rarely go as well as assumed).

A relevant example of such a pre-launch: Even though this was not part of transition to a new brand name, changing the look and feel of an existing product brand can be quite negative. Accordingly, when CNBC recently changed the look and feel of their app and website, they informed users via pop-ups that a change to the look and feel was coming and to click here to get a “sneak peek” or click there if they wanted to be surprised. By offering both alternatives, users of the app and site were left with no good reason to be upset at cut-over. The teasers ran intermittently for several weeks before the cut-over, making the actual cut-over a “non-event”.

During this pre-launch phase, it’s also a good idea to survey customers of the to-be-retired brand what additional products and services of the acquirer/successor brand each customer is most interested in, allowing the actual launch campaign of the successor brand to be more tailored.

Launch. At cut-over, the communications campaign to existing customers of the to-be-retired brand should be along the lines of “same great product, now with a new name and these additional/new benefits…”. Ideally, a personalized outreach to each customer with a tailored offering keeps customers from switching to a competitor.

Separately, a campaign to appropriate customers of the successor brand’s other offerings should be undertaken to drive those customers to embrace the new product offering.

Post-launch. Following launch of the successor brand, a drip campaign of messages aimed at reminding continuing users of the successor brand’s available options, offers and benefits should be undertaken, along with regular provision of testimonials/stories of user experiences with the additional products and/or services and how-to videos will do much to keep more customers.

Similarly, customers of other products and services from the successor brand should be continually enticed to also become customers of the new product/service, as appropriate.

Communications to Customers of Competitors

In order to attract new customers to the successor brand, we would recommend using a sector-appropriate mix of channels (e.g., paid/organic social media marketing, search engine marketing/retargeting and ad placement) based on appropriate market research.

The most effective messaging to convert users from their existing brands to the successor brand would, in our opinion, most likely focus on the concept of the successor brand’s additional benefits and offerings.

Of course, each situation is unique and requires a nuanced, customized approach. Call the branding professionals at Six Degrees for specific case studies and a consultation for your brand transition needs.

Frank Schab
fschab@six-degrees.com

An experienced marketing and branding strategist, Frank has been helping clients optimize the value of their brands through insightful analysis and effective strategy for more than three decades. Along with holding positions at General Motors and Pfizer, Frank served as a Managing Partner at Interbrand New York and VP of Global Brand Research at Opinion Research Corporation before co-founding Six Degrees. His brand-building work in various sectors including hospitality, medical device, pharmaceutical, automotive and technology has taken him to 17 countries on four continents. Frank holds a doctorate in psychology from Yale University and speaks fluent German.

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