Branding is no different than any other business investment. In the end, it comes down to return on investment.
The challenge is that with branding, ROI can be difficult to measure. You can look at increased sales. You can see an uptick in your social media and digital media analytics. One of the toughest questions to anwers, however, is if an acquisition were to occur, how much precisely is the purchase price affected by branding or even that a deal is in play because of brand investment?
What I can confidently say is that branding can contribute enormously. It can contribute to the possibility of your business being acquired and the value the ownership receives for the business.
Executives constantly question how a re-brand impacts enterprise value and the probability of being acquired. Here are some reasons that should open your eyes to the “why” of re-branding and the impact it can have on your enterprise.
Re-positioning. Through the lens of a rebrand could be a signal to the market that you are now an expert and market leader in the hottest and fastest growing market segments in your industry. This re-positioning exercise makes your business much more attractive.
Internationalization. In some cases re-branding is necessary so that a brand can also be used internationally. This may be because the brand name is too specific to a particular country. In certain countries a brand name may also conjure up the wrong associations. Organizations that sell the same products in several countries but under different brand names are also increasingly opting to use one brand internationally.
Bad Reputation. Bad reputations can have a serious impact on the enterprise value of a company. Re-branding can ensure that negative associations with the brand are forgotten or dispelled, both outside and inside an organization. This is the only way that a branding effort can remove any negative feelings about the brand.
Other reasons to re-brand include an outdated image or visual identity, or when a new CEO is put in place. These business changes usually have a desire to send a signal to the market that this isn’t your father’s Oldsmobile.
Bluetext has had quite a run of helping companies shape their brands as they position for growth and some type of liquidity event.
Some recent branding to acquisition stories can be found here:
Sourcefire Acquired by Cisco for $2.7 Billion (12 months after rebrand launch)
Sourcefire Case Study from Bluetext on Vimeo.
Acentia Acquired by MAXIMUS for $300 Million (4 years after rebrand launch)
Altimeter Acquired by Prophet (18 months after rebrand launch)
We recently launched some exciting re-branding efforts, including Cigital’s following their $50 million capital raise. The live website, the centerpiece of the branding effort can be found here. It will be interesting to see if our recent brand births eventually blossom into great acquisition stories. Are you next to be acquired? Lets talk about your brand and how we can help.