Hurray! You’ve accomplished a massive milestone in your career: one or more successful HVAC acquisitions or mergers. That’s an exciting step toward your business vision and possibly opens you up to a new industry–all things HVAC.
With an acquisition comes many questions to answer and tasks to accomplish. One of the first questions will likely be, “Will I keep or change the new HVAC company’s name?” The company’s first impression is its name. A good, clever, and on-brand name increases the likelihood of “internet search” customers, while a lousy name does quite the opposite.
Your answer will depend on whether you want to keep a similar brand or create something new and fresh. There is no black-or-white answer here. The wisest decision will depend on a myriad of factors, including:
1. Brand Equity
Brand equity refers to the value a brand adds to a product or service based on consumers’ perceptions, experiences, and attitudes toward that brand. It reflects the strength of the brand in the marketplace and its ability to influence consumer decisions, often resulting in increased loyalty, higher perceived value, and the potential for premium pricing.
How much brand equity does the acquired company have with potential clients? While your new business typically enjoys brand recognition and loyalty among its existing customers, the perceptions of prospective clients are more critical in shaping the future brand as they drive sales growth.
Suppose potential customers are familiar with and positively associate with the current company brand. If these new prospects encounter the current brand for the first time while searching for solutions, it may be easier to position the acquired company as a credible option. This is simply because they have some prior awareness rather than a completely unknown brand. In this example, you would need significant marketing efforts to shift these associations to the new brand and name.
2. Reputation
Sometimes, the biggest perk of buying an existing company instead of building one from the ground is that you can carry on the reputation and already have a Rolodex of customers in your back pocket.
However, if the brand was going downhill and needed a better reputation, it might be in your best interest to completely change the name and branding so customers don’t associate you with the old brand that has a bad rep attached to it. Ask yourself: which has the more substantial reputation, the company being acquired or the acquiring one? That will help you decide the right move.
Building and maintaining a good reputation will build a solid foundation for every business area, leading to loyal customers, lower employee turnover, and healthy revenue.
3. Marketing Budget
You also need to consider your business finances. What is your budget for marketing your new HVAC business?
After an acquisition, many companies plan to carry on business as usual as if nothing has changed, while others make it known that things will be different. If the ladder is your chosen path, then you’ve got to have the marketing funds to accomplish it.
A name change will require promotion so sales don’t instantly plummet. Then, there are marketing costs for new logos, signs, etc. If the budget isn’t there now, it may be better to hold off until you can swing it.
4. Quality of Customer Service
Does the acquisition enhance the ability to serve customers?
A typical growth strategy involves acquiring companies that bring essential competencies, allowing the acquiring company to bypass the time and costs of developing these capabilities in-house. If customers view the acquisition as enhancing the acquiring company’s offerings, it’s often best to integrate the acquired company under the parent brand and gradually phase out the acquired brand name.
However, if the two businesses appear largely unrelated from the customer’s perspective, it might be wiser to maintain the existing brand identity to avoid disrupting customer perceptions.
5. Company Culture
It’s essential to look at the heart of the two companies merging. What are the cultures like, and how can you benefit from both?
Employees already clearly understand what their brand represents, and changing that without involving them can lead to significant challenges. When the cultures of the two organizations are vastly different, it requires careful, long-term planning and persistence to listen to employees’ perspectives, explain why and how their perceptions need to evolve, and engage them in driving the positive changes that will ultimately benefit everyone.
To Wrap Up
Considering all five factors, you’ll know best how to move forward. Just remember to make this transition as easy as possible, not only for your employees but also for your customers. Customers want to be in the loop and know what the merger or acquisition means for them. Make sure to have good public relations and customer service skills. Show your customers that the acquisition enhances services and signifies the start of a positive journey.
