Roll up branding question

June 26, 2024

by a searcher from Baruch College-The City University of New York - The Zicklin School of Business in Red Bank, NJ, USA

What doing a roll up, what are some approaches on rebranding acquisition targets? Take something popular like home services where you are consolidating a region - are you rebranding targets right away to match existing firm/portfolio, leaving them unchanged for a bit and then changing them, or leaving the brand as is and creating a group name? If making a change, how are you communicating it to the market without obliterating the goodwill you just purchased?

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Reply by a searcher
in London, UK

Hi sorry for the long answer, I like role ups because of efficiency if the integration is done well. I think when considering rebranding acquisition targets in a roll-up strategy, in any industry which is fragmented including home services, you need a coherent strategy with the end in mind as what you do can significantly impact the overall success of the consolidation. 1. Immediate Rebranding : Doing it right away to match the platform business offers an immediate unified brand identity across the region, which can lead to economies of scale in marketing and operational efficiencies. I think this is the golden juice of this strategy ultimately. The risk here is that you may alienate existing customers who have strong loyalty to the original brand. A good way around this would be a near perfect comms strategy that emphasizes the benefits of the rebrand, e.g better quality, more offerings etc. 2. Gradual Rebranding : leaving the acquired brands unchanged initially and then gradually transitioning them to the new brand over time can aid in keeping customer loyalty while slowly integrating the new brand identity. Gives time for all stakeholders to adjust. 3. Group Branding : Leaving the brands the way they are, the best example I can think of is the car industry (I like these machines ha ha!) e.g FCA owns fiat, Maserati, Chrysler, RAM Dodge. This allows each to maintain local goodwill. Personally I feel this is effective in industries sensitive to local reputation and home service is one as locals develop personal connections with their service personnel e.g local engineer etc. Finally when making any branding changes, the comms is crucial to mitigate against goodwill obliteration. I think the best way is to remember that businesses are ecosystems with various players. You need to engage all at the start i.e employees, suppliers, customers and so on. Be consitent, transparent and customer centric. Acting on any feedback quickly, especially negative type, as in roll ups its a long game. Ultimately, it really comes down to a few issues and the weight you put in on local sensitivity vs regional or even national recognition. Never forget the strength of what is being acquired to what it is being joined to eventually. Hope this helps.

Reply by a searcher
from Harvard University in Denver, CO, USA

I think Levi described the options very well so I won't repeat. However, I would be very, very, very hesitant about re-branding unless the existing brand has a terrible reputation (in which case you hopefully bought it for cheap!) Usually there is very little upside initially in changing the brand, but there is a ton of potential risk and expenses. It's expensive to rebrand (trucks, uniforms, etc.), requires a ton of mindshare internally that takes away from marketing/sales focus, and risks confusion in the market which can lead to slower sales and customer churn. Assuming you bought something that works, why fix what isn't broken? Where I think it might make sense is when you're ready to spend heavily on mass-marketing like TV, radio, sponsorships, etc. that's more regional and where you want to drive everything to a single brand. Even then, I'd start with the sub-logo approach where you leave the brand in place but add "a HoldCo Company" under the logo for ~1-2 years. You can then market the sub-logo but it's not awkward when the original brand's trucks show up to do the work. The other time I'd change the brand is if it's a much smaller bolt-on acquisition where you're really just buying accounts, crews and equipment, not the brand.

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