Many years ago, I opened a bank account at a nearby Hamilton Bank branch so that it would be convenient to cash my paychecks. They were the largest bank in the area with numerous branches and that factored into my decision. Since then I never moved the account, but I have experienced a brand transplant more times than I can remember. Along the way were National Central Bank, First Union, Wachovia, and now Wells Fargo.
I have become almost numb to my bank brand as a result. With each new transition, the new brand’s standard rhetoric about “improved services and options” is countered by my own thoughts of, “I hope I don’t end up having to pay more for my accounts.” Some of these mergers have been frustrating, but each time I think about switching banks, I only have to count the number of automated transactions that would require a changeover before I grudgingly decide to remain. There can be little doubt that direct deposit has done more for bank brand loyalty than all the free toaster promotions in history.
Transplants are tricky, but doubling up can be just as troublesome. In 1998, Daimler-Benz bought Chrysler for $37 billion dollars and renamed itself DaimlerChrysler. Initially, the move was an intriguing one, at least from an American carmaker perspective. Daimler was relatively unknown, but Benz was a super premium quality brand. Chrysler’s commercials soon referenced the “German engineering” that was part of their new company. An ad campaign featuring their Chairman, Dr. Deiter Zetsche, attempted to further underline the connection between the two brands. The “Ask Dr. Z.” commercials were friendly enough, but Dr. Z. had such low name recognition that most viewers thought he was simply a character created to personify the brand. In 2007, DaimlerChrysler sold off Chrysler to a private firm at a huge loss and the Germanification of Chrysler was officially a bust. Arguably, it left them weaker as a brand than before the merger.
The new Chrysler slogan, “Imported from Detroit,” now has the brand coming full circle. In the 1980s, then Chrysler Chairman Lee Iacocca famously led a patriotically tinged resurrection of the company with slogans like “The Pride is Back,” and “If you can find a better car, buy it.” Later, under Daimler’s ownership, the focus shifted to the presumed equity of German influence. And now, Chrysler’s use of rapper Eminem may prove to be a more effective branding move than Dr. Z ever imagined. But what has this seesaw of messages done to the equity of the Chrysler brand? The sales figures aren’t good.
Daimler and Chrysler were not necessarily doomed to fail and there were many factors beyond the mash-up of their two brands that led to their relatively short marriage. But the pairing does illustrate the difficulties of combining two separate and unique brand ideas into one. Merging companies desperately want to retain all the existing customer equity they can. Usually they are paying at least a partial premium for that value as part of their purchase. But running two brands independently or side-by-side is costly and flies in the face of one of the fundamentals of any merger, which is cost efficiency.
A key to any brand transplant is how well the two brand cultures align. As ruthless as banks can be about mergers, their products and the process of doing business generally changes very little from one brand to the next. But the danger for acquiring firms is that the transplant won’t take well because of brand dissonance between, say, a service-driven, personal-attention culture of a smaller company and the more corporate, high-tech, but low-touch brand of the buyer.
Ultimately, most brand acquirers are faced with a basic choice: run the brand separately and maybe not even tell your customers about the change, or plan on a transition that will ultimately eliminate the acquired brand at a safe speed that retains as many customers as possible. Keep in mind that a merging brand’s employees are also making a dramatic change and may need some time and training to understand how to represent the new brand and shift their loyalty to it.
Whatever you do, it is usually best to keep moving toward a single brand concept. Strong brands are about one idea. DaimlerChrysler never quite got there and Daimler and Chrysler both paid the penalty.