Marketing Success After an M&A

By Paul Schaus

Bank mergers and acquisitions (M&A) are rebounding across both small and large regional banks, according to Deloitte. A 2016 Bank Director survey found that more than half (51%) of banks intend to purchase a healthy bank within the next 12 months.

Clearly banks are in the market for M&A, especially to counteract increasing regulatory costs. In compliance, economies of scale matter. A $200 million bank likely spends as much on compliance as a $1 billion.

Other banks are finding it difficult to fund capital improvements or have decided that it’s too difficult to ‘go it alone.’ The sweet spot for smaller banks to become more efficient and increase revenues seems to $1 billion.

From a marketing perspective, however, an M&A can be tricky. If your bank merges or acquires another bank—particularly if that bank is located within your geographic footprint—you face many challenges. These challenges are not insurmountable but they do require more innovative solutions than may have worked in the past.

Keep the following five points in mind as you navigate a slew of marketing decisions.

  1. Customers may be mad.

If your bank merges with a bank similar to your own in terms of geography, customer base, and products, your job as a marketer just got more difficult. It’s possible that customers specifically chose one bank because they had at one time been a customer of the other bank and left, perhaps due to a bad experience or high fees.

They are not going to very happy to now be back at the bank they left.

As a marketer, use extra caution if the banks are in the same market. It’s not all that uncommon for a bank that crossed over the $1 billion threshold due to a merger finding itself down to $800 million in less than one year.

Some customer runoff is expected—and some is even encouraged. But losing too many customers negates the benefits of the transaction.

  1. Focus on the customer experience.

As you design your pre and post marketing plan, always keep your focus on the customer experience. What is it about the merger that will positively impact customers?

Hopefully the banks complement each other. Perhaps you can now offer expanded or new services such as wealth management, small business lending, or credit cards. Will an expanded branch network give customers more choices? Stress how the size of the bank improves bank stability and why that’s important to customers.

  1. Don’t be bigger. Be different.

In today’s market, you can’t be everything to every customer. Differentiation and having a niche is a much more successful strategy.

After a merger or acquisition, hone in on how the transaction makes your bank special. Don’t try to market your bank as just a smaller version of Bank of America or Wells Fargo.

Define your market and focus on it.

  1. Look for the cultural fit.

During a merger or acquisition, culture is critical. But I’m not talking about the bank or employee culture: I’m referring to customer culture. If the culture of the combined customer bases don’t fit, marketing will have a very difficult time.

If bank management and the board hasn’t considered the culture of its customers before the transaction, your bank may discover that what they thought was a smart strategy turns out to be less than positive due to high customer attrition.

  1. Treat each M&A as unique.

Perhaps you’ve already been through a merger or acquisition and you’ve got a template to follow. Unfortunately, each transaction is different, and what worked in the past may not work today.

Create a marketing strategy based on the unique aspects of this deal. What culture differences do you need to address? What products and services will you offer? How does this M&A impact your brand? Will your quality of service change?

What is the overall impact on the customer experience?

Keep Your Cool

During an M&A, marketing is often in the hot seat. Even if marketing had very little input into the deal, they are held responsible for making sure that customers don’t leave and that the bank brand remains strong.

It may be small solace to know that if the marketing fails, it’s likely because the bank’s growth strategy was flawed and this particular merger or acquisition never should have occurred.

In marketing, bigger isn’t always better.

Paul Schaus is the President, Chief Executive Officer and Founder of CCG Catalyst. Contact him at PaulSchaus@ccg-catalyst.com or (800) 439-8710 ext 201. Follow CCG Catalyst on LinkedIn and Twitter.

 

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