Merger and Acquisition Blueprint for Banks and Credit Unions, Part 1

Mergers and acquisitions can create exciting opportunities for financial institutions and their consumers. The strengths of each organization, when properly combined, can create a stronger value proposition in the long run. 

However, when mergers are undertaken with inadequate planning and commitment, they can repel consumers, pushing them toward other financial institutions. In fact, consumers are three times more likely to switch financial service providers when their current providers merge with another institution.

Smart merger strategies must be implemented to prevent the loss of customers. Because consumers are suspicious and wary of change, your strategies for the merger must address these five foundational challenges:

  • Brand Equity
  • The Consumer Experience
  • Retail Strategy
  • Culture transformation
  • Communications

This article addresses Brand Equity and The Consumer Experience. PART TWO will cover Retail Strategy, Culture Transformation, and Communications.

Brand Equity

Research your consumer base to discover their current level of trust and loyalty with the merging brands. For each brand, examine the long-term business objectives, value propositions, corporate identities, target client profiles, product and service strategies, and competitor profiles.

The information you gather will help you develop operational plans for the merger. There are some key questions you’ll want to answer in order to formulate effective plans:

  • Which is the dominant brand in the market?
  • Is the acquisition-driven by the addition of new markets?
  • Whose consumers are more willing to try new products or services?
  • Whose consumers are more willing to pay a fee for your products or services?
  • Who can better leverage distribution channels?
  • Can the two brand histories mesh? How?

The Consumer Experience

A top area of focus for any brand merger or acquisition should be the consumer experience. Consumer confidence is easily shaken, and putting their fears at ease starts and ends with a positive consumer experience. New, or unfamiliar brands can elicit a distrustful, confused, or angry reaction from customers looking for dependability and consistency.

In addition to ensuring positive experiences, keep your frontline teams and consumers informed! Educate them on changes that are occurring: what will happen, when it will happen, and how it will happen.

Consumers are averse to change, and even more so when change comes as a surprise!

Understand the risks associated with mergers and acquisitions in order to maximize your potential, and prevent customer loss. Let us know if you want to start a conversation with NewGround Strategy. It’s your first step to understanding your best path forward.



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