Flip the Script on M&A Marketing

By John Oxford

It’s the end of a long day at work, the market has closed and right before you pack up to go home, a press release hits your inbox. The internal email attached to it says there will be an important conference call tomorrow morning. After reading the press release, you realize sleep is the last thing you should expect this evening. You have just received an M&A announcement.

Many different feelings crop up, depending on whether your bank is the acquirer or the acquired—and what your position is within your company. Having experienced more than a dozen different M&As, I’ve got some views on what might help should you receive an M&A announcement affecting you, your department or market place.

No time to stop thinking like a marketing strategist

For marketers, mergers and acquisitions offer lots of opportunities. Perhaps it’s the chance to acquire new talent or realign your department. It could be the opportunity to explore a rebrand or finally add some new bells and whistles to your marketing mix. Or—depending on the deal—it could be a great time to try something else you were scared to explore, now that you have some cushion to move on and explore other opportunities.

However, looking beyond the individual impact of M&As on you and your marketing department, marketers need to be aware of three lines of strategy during an M&A—whether you work for one of the banks in the transaction or a competitive bank in the same market.

  1. Retail checking disruption will not be as dramatic as anyone thinks.

Generally speaking, even the worst of bank mergers experience only about 10 percent of their clients leaving. Eight percent is usually the norm, and 5 percent or less attrition should be considered a really successful transition.

If you’re with a competitor financial institution in the same market as a merging bank, don’t bet all your chips on some magically incredible deposit pick up. Although the disruption of an M&A does create some fluidity to the marketplace, folks don’t like to switch banks. It’s hard to do, and frankly, if people wanted to switch banks, they would just do it anyway—not just because their bank is changing names. In addition, with the rise of digital banking, consumers can bank where and when they want. So as long as banks nail the mapping of their accounts correctly—other than an early day or two of high call center volume and maybe some social media chatter—any negative disruption impact will most likely be short-lived and highly overblown.

Now, there is one exception to this: when a smaller or rural community has limited choices for banking and, due to a merger, the community’s choices become even more limited. This is where a community bank may want to go all in on trying to market to retail checking accounts. Other than this unique scenario, planning a big ROI on marketing for retail deposit accounts from one or both of the merging intuitions may be a fool’s errand. It’s just dang hard to move retail bank accounts. On the other hand…

People—and especially bankers—love certainty. We have entire divisions called credit departments devoted to making certain our loans are paid back. FDIC insurance gives us certainty that our deposits are covered up to certain amounts. Certainty is in a bank’s DNA and it is part of the persona of most people that work in the financial services industry.  As you can guess, M&As cause both perceived and real uncertainty, which leads us to our second line of strategy.

  1. A better focus for your M&A marketing strategy is actually internal marketing.

Losing key employees who also take a book of business and/or clients with them can be very painful. If they take a whole team with them, the situation can be even worse. That can cause a perceived weakness in the organization they left. Beefing up your internal communication and marketing—and helping executive management provide clear messaging with as much certainty as possible—may save the day. It may also deter your institution’s employees from talking to a competitor or spending their days immediately following an announcement diving into a LinkedIn job search.

It helps to recognize that until the conversion of systems takes place—usually many months after the M&A announcement—clients do not see a lot of external changes. Yet inside your organization, there is often realignment taking place in anticipation of the newly combined company. So focusing your efforts on retaining talent might be the best marketing plan you have. And that plan has a logical corollary, which brings us to our third line of strategy.

  1. If you are a competitor in a market with a recently announced M&A, consider it open season in the hunt for talent.

Rather than going after the merging banks’ customers, your more strategic goal may be marketing yourself to those bankers left uncertain and disrupted by the M&A. Let’s repeat: bankers love certainty and clients are hard to move.

A talent acquisition strategy offering bankers an alternative choice with more certainty—and in many cases, the opportunity for a team to stay together—is much more likely to succeed than trying to land new account openings. One more time: bankers love certainty and clients are hard to move.

Your bank’s M&A communication strategy and secret marketing sauce is unique to your institution (as is ours). But tamping down the expectation of big retail deposit gains, focusing on internal marketing and communication and having a plan to retain or acquire talent will make you a more strategic marketer and help you provide more value to your organization.

To learn more about M&A marketing strategy and communication, listen to this week’s Marketing Money Podcast as I talk it over with co-host Josh Mabus of the Mabus Agency.

John Oxford is director of marketing at Renasant Bank and co-host of the Marketing Money Podcast.