Brand voted biggest impediment to merger

I attended a luncheon hosted by the Fund Executives Association Ltd (FEAL) in Melbourne yesterday. The topic was merger and collaboration in the superannuation industry. It was prefaced with a report on the findings from an email survey sent nationally to FEAL members to test the prevailing appetite for fund mergers. But enough of the backgrounder...

Among the questions was one about impediments to merger and the one than stood head and shoulders above the rest was brand or, in simple terms, loss of identity.

I don't agree with this. For one thing - if two brands get together, why talk about not continuing them, assuming they do enjoy the loyalty and respect that directors and executives think they have? Why should a merger necessarily bury good brands. Why can't we do a 'Proctor and Gamble' and market multiple brands? Why can't superannuation funds run off a common back-end and develop sophisticated data capabilities and organisational structures to achieve differentiation at the customer interface.

It's because there are two underlying drivers when the top bods talk about merger. The first is that brand is an intangible for most directors. That's because in many cases (and I'm not talking about my employer here) there is no substantive research on which to argue a case that the brand is crap anyway and we might all be better off with a new one.

In the absence of hard evidence, it's too easy for reluctant directors worrying about their next board position to use brand loyalty and the implied exodus of customers post-merger to build a substantial barrier to merger - pseudo-intellectual as their argument is.

The second is unique to the superannuation industry in Australia. It is the bizarre belief that we are unique, unable to leverage off the experience of mergers and back-end homogenisation in other industy sectors. Roll out standard excuses A to Z, with 'heavily regulated industry', 'equal member and employer board representation' etc etc leading the charge to thwart any attempts to make it all happen.

Yes. It's alright to collaborate using common platforms, but a merger changes everything ... doesn't it? Of course it doesn't. Why should it? Any decent application of intellect will find a way of doing what is necessary, especially in an environment where government wants industry consolidation. If these 'unique' superannuation issues were to get in the way of mergers, there's even a good chance the government would adjust legislation to remove the hurdles!

And where does loss of brand identity fit into all this? Frankly, it doesn't, at least not as an obstacle to merger. It's because, at the end of the day, there are two clear courses open to the merging entities - retain and market their brands under the umbrella of a parent company, or launch a new brand.

The decision about which option to pursue has nothing to do with merger, but everything to do with thorough research and an objective assessment of whether the existing brand equity is too valuable to lose.

Merger. Do you ever start with a clean sheet in brand creation?

My company announced a merger with another of similar size yesterday, so one of the tasks I'll be involved in over the next couple of years will be re-branding. As you'd understand, in a merger re-brand means more than tweaking the logo and dreaming up a new catchline. It's a baby and bath water job - clean sheet of paper. Or is it?

The concept of starting from scratch is a brand dude's dream. But when you have two companies coming together - one with over 60 years of history and the other close to 80 - you're never going to be starting from scratch.

If you believe brand starts from within the company, then your framework is clearly defined by culture. The first task is to research where the two organisational cultures share common values and where they differ. Hopefully, there's some crossover where you can lay the foundations for your new brand. If there is no commonality, the risk of failure in the merger will be much higher and brand will likely be the least of you problems.

Then there's the external perceptions of your two organisations. How do customers perceive them? Suppliers? Industry partners? Media? How do you project your brand into the marketplace in a way that will not cause dissonance within one or both of the customer bases?

I know of companies that have dreamed up new brand names and positioning over a few good reds at lunch time. Some are lucky and hit the spot. But I hope as I progress this process, those that approve budgets set plenty aside for preliminary internal and external research and market testing among our customers.

Converting ethanol into testosterone

Avid readers will know that I drive a VW Passat. The identity crisis associated with this is proportional to the difference in price between my erstwhile chariot and other cars to which I aspire.

Nevertheless, its maker insists that I will only get optimal performance from it by filling it with 98 RON unleaded fuel. If I want to suffer poorer performance (responsiveness and fuel economy), I am permitted to use 95 RON. Below that and... well suffer the consequences. Engine seizure, heart seizure at the repair bill and so on.

And as for ethanol, even mixed in over-the-counter medication proportions, forget it. The VeeDub would most likely just lie dormant and wheezing in the drive way, as it slid through the gears into malnutrition.

The killer for ethanol is the suspicion that performance suffers. In the dark recesses of the male mind, this has sexual overtones. Like substituting your Viagra with pink icing sugar. In Australia, the V8 Supercars even use ethanol but, to my mind, it hasn't registered with the hoards on the hill at the Bathurst circuit.

No. To testosterone charged males, taking the lead out of petrol in the 1980s was the thin end of the wedge. I worked for Ford at the time and we dropped the V8! with calamitous consequences for top-end Falcon sales (now there's a contradiction in terms). Now, we're just diluting our potency further by adding plant extracts. My God, the cars will be vegetarian next and we know how thin and pasty looking vegetarians are!

Clearly ethanol is too much like estrogen. It even begins with 'e'. Nothing like the 'T' for testosterone or Tyrannosaurus Rex, or T-bar shift. Ethanol has as big an image problem as a Formula 1 or NASCAR driver called Ethyl. How's 'ethyl-benzene' sound? Just doesn't work like methyl-benzene.

Let's rename it Tethanol for a start. This close cousin of testosterone would have us queuing at the pumps for our weekly top-up of automotive viagra. And we'd be all the better for it - environment included. Who wants to do the global repositioning job for ethanol?

Do we go to conferences for comfort or to learn?

Tossing up going to an annual conference for financial services marketers, particularly those involved in superannuation. This deliberation is taking place after spending some of yesterday afternoon with a PR consultant.

I always come away from these meetings with a warm fuzzy feeling. In the case of the conferences, it could be a mild temperature accompanied by giddiness and loss of orientation which seems to follow the regular awards night. But nonetheless, buried under the after-effects of the leisure hours, I think there's more to it.

I never learn a lot at these things, so it's not that. Most of the time, I just sit in the audience spying on what others have achieved or are thinking of achieving - undeterred by the fact that this professional voyeurism could morph into some type of intellectual and/or creative plagiarism.

No. I think the warm fuzziness comes from being surrounded by others who think like me or, in that unlikely event, at least pretend to comprehend what I'm on about - brand at the apex of strategic planning, communicating in plain language, the list goes on.

These events are an escape from the blank stares of lawyers, technocrats, auditors, actuaries and others who just don't get this idea about brands defining businesses. This gaggle of overseers who dissect then reassemble communications so the arse is often where the head should be.

Yes, I think putting this in writing has confirmed for me that these talkfests are not about learning, but about comfort. They're about reaffirmation that the loonies really are in charge of the nuthouse everywhere except in the marketing and communications space.

Where's that registration form? I'm on my way to therapy...