|
It makes perfect sense that the very act of merging two companies or
brands affects the image and customer loyalty of both in the
customer's eyes. What is not clear is the size of that
impact and whether it is positive or negative.
Merger effects on customer loyalty have two impacts on business outcomes.
-
Firstly, as customer loyalty is affected so will be the number
of customers that the final, combined, entity will retain.
If the two companies are synergistic in the customer's mind then
the classic 1+ 1 = 3 scenario occurs where the merged company's
customer loyalty is stronger than either stand alone company.
On the other hand if there is no or negative synergy then the merged
entity is weaker than the individual companies.
Secondly, as company valuations are partially based on the number
and type of customers of each entity, if customer loyalty is reduced
and customer attrition increases after the merger, the valuation
will be incorrect.
There is the distinct chance that one of the companies will pay too much.
The biggest problem here is knowing the impact of your merger on customer loyalty before you commit.
Genroe's Merger Customer Loyalty Impact service is designed to answer this problem
and quantify merger impact on customer loyalty before the merger.
The service uses a unique psychological profiling technology invented by Brand Keys.
Using the Brand Keys methodology, Genroe is able to predict, before the transaction,
the merger's impact on customer loyalty. The information generated is highly
accurate and based on interviewing small samples of target customers.
With this service you can accurately quantify the customer loyalty impact on
each of the merged brands and identify the change in company value that will
result. This reduces merger risk and improves outcomes for all concerned.
In addition, analysis can be performed on a range of merger pairings to identify
those pairings that generate the most synergistic outcomes allowing companies
to optimise the selection of merger partners.
|
