One of the biggest opportunities post acquisition is to find efficiencies on the marketing side, and this is often an ignored area because there are usually a lot of efficiencies in sales, product, finance and services.
Within marketing, there are five domains that you can look to integrate:
The biggest mistake is when companies focus on branding as the primary driver of value creation from the marketing function after an acquisition for the following reasons:
In the first 100 days, these are all forms of lost enterprise value because you lose time, effort and also take a step backwards from a demand and growth perspective. Now you need to claw your way back to where it was when you acquired it.
That being said, brand integrations can be valuable in specific circumstances. Here are two specific scenarios:
You have to be very deliberate in deciding if the brand integration project you want to launch fits the latter scenario or the former. In many cases, you can probably capture that value without necessarily needing brand integration.
There are real risks with risking political capital on a rebrand as well. The average tenure of a CMO is only about 43 months so if you're investing into a huge rebrand, you're investing a lot of your internal social capital on the rebrand, in the hopes that it will drive enterprise value. If you spend six months into brand integration but the pipeline doesn't increase, your social capital in the organization is going to decline significantly, especially if you have to explain this during a board meeting. Then, you've actually wasted six months of time that was available to you and now your time on hand to create value is even shorter which has real implications from a turnover standpoint.
A way to bridge this gap is with a shortcut, where with modest adjustments you can bring two companies closer together from a brand perspective. Companies who have done this include Webex (Cisco), Instagram (Facebook), Sigstr (Terminus), Wild Apricot (Personify), GoAnywhere (HelpSystems), Adespresso (Hootsuite) and more. It's far less investment and you can focus on the far bigger value creators in terms of where the business needs to go and what's in the investment thesis.
Your biggest lever after an acquisition will almost always be programs. Each company is acquired for very specific reasons. Often, there are 4-5 levers which are outlined in the investment thesis as the main value drivers:
As you look at those 4 levers, you can use a RICE methodology to prioritize the levers based on reach, impact, confidence, and effort. For example, if an expansion initiative is in the investment thesis and can drive a lot of value from the existing customer base (e.g. pricing increase), then supporting that initiative will likely get priority over a lot of other levers available from a marketing integration standpoint.
Connect to programs are the people we need to deliver on those programs. For example, if demand generation is identified as a core value drive post-acquisition, ensuring the business has a strong demand generation function is critical. If certain roles are missing to help demand generation — like a paid search agency — we need to identify that gap and then fill that gap to help the program succeed.
At the same time, we need to look at whether or not there's an existing person in another business unit that can staff that function if we can repurpose people and move them around. Or if there are too many people doing the same kind of role, we can potentially merge those roles to find efficiencies for the organization.
This is where building centers of expertise internally is critical. In most cases, there can be 4 key domains of centralized expertise in a marketing organization:
In each of these cases, one team can manage campaigns, playbooks, roadmaps, systems, processes, reporting and resources for multiple product lines because of the domain of expertise required to run these. Individual business units won’t have the expertise needed to capture the value in each of these domains.
Each of these functions also needs a leader. In some instances, a leader will be present in the business unit within one business unit that can take over the function for the whole business. In other instances, the role needs to be hired externally. There will also be duplication of roles and functions that we can integrate or repurpose for other areas of marketing.
The CMO's role in many ways is to build these centers of expertise, while managing dedicated marketing teams for each business unit that cannot be leveraged via a shared services model. This will differ on a case-by-case basis.
With multiple acquisitions, you have data sitting in multiple different warehouses. If a customer interacts with one product line via the sales team and then interacts with a different product line via the website, your marketing data warehouse needs to capture those interactions to understand that prospect’s full buyer journey.
If you're trying to build a list of the 2,000 ideal customer profiles for your organization that is shared by multiple product lines, your marketing data warehouse across all product lines needs to be connected. This requires a lot of effort and investment into creating the right marketing infrastructure, especially as acquisitions ramp up.
Unfortunately, this work often takes a backseat to flashier items like Brand integrations but it is far more important. It is the foundation upon which marketing can be scaled inside of a platform company. While brand give the initial impression of one organization, data integration and experience makes it feel like one organization.
Connected to data warehousing is the marketing stack. If one product line is on Marketo, while another is on Hubspot, data integration becomes much more challenging.
There are also huge costs associated with each of these platforms. As more acquisitions are added, you could have multiple product lines spending on the same tool in different instances across the marketing stack costing hundreds of thousands of dollars. This is an opportunity for finding operational efficiency.
There is, however, a huge risk to merging systems into one. Without careful deliberation, you can break an organization as you're trying to merge the data together. Unless the costs are prohibitively high, this is an area you may put in the “important not urgent” column as you plan your marketing integration.
You can likely drive a lot of value through marketing programs and strategic drivers in the investment thesis without messing around with these components right away. If you’re acquiring multiple companies a year, then this area is worth investing in to build a process around for future acquisitions as well.
Overall, you need to address all five of these pillars. In terms of order of importance and value to the business, here is how to rank them:
Get weekly updates where Shiv interviews guests like Neil Patel, Patrick Campbell and Rand Fishkin.