Global marketing services and secure & essential communications provider, Adare Group has bought Banner Managed Communication (BMC), a leading supplier of business marketing and essential communication services.

Adare Group chief executive Robert Whiteside said the deal was “a truly transformational acquisition” which will boost Adare’s UK operations and give BMC better access to overseas territories, as well as be a significant step forward in Adare’s ambition to become a £400m-turnover company by 2020. More acquisitions are planned.

“This acquisition is a hugely positive development for both companies’ clients, staff and investors. With our combined service propositions, high-quality client portfolios and talented teams we have the opportunity to build one of the world’s foremost marketing services businesses. As well as doubling the overall size of our UK business, the deal takes our secure and essential communications operation to the next level by bringing together Adare SEC and Banner Direct, creating a £70m, 400+ staff operation. The new organisation will have the scale and infrastructure to be able to service the very biggest and best UK businesses and global brands.”

Whiteside said: “It puts Adare at the forefront of our markets, it differentiates us even further by our scale and by a wider range of complementary services and by an enriched customer base”.

The combined business will enjoy an especially strong position in the global leisure, healthcare, FMCG, financial services and retail sectors. BMC operates through four divisions – Banner Create, Banner Direct, Banner Connect and Banner Tech. In the short term, the BMC operations will remain a separate entity, or as Whiteside put it, “a third child in the company” alongside Adare International and Adare SEC, which are individual limited companies. Eventually the BMC operations will be split up based on their respective specialties.

BMC chief executive Catherine Burke said: “The combined organisation will open up a range of new benefits to our clients and other stakeholders beyond anything we could deliver as stand-alone businesses. A greatly-expanded global infrastructure is one obvious example, as are our much-enhanced offerings in business-critical essential communication services, multichannel, digital visual communications, creative design, print management and countless other areas. In terms of sector strengths, the two businesses complement one another particularly well, while in certain verticals, the deal makes us the single biggest provider of integrated marketing services”.

Keeping clients first in merger integration

The period of time following on from acquisition is often perceived by competitors as a time when the merged businesses can be at their weakest due to the complexity of redefining the service offer, potentially providing an opportunity to target their customers.

During the transition period when the two companies are aligning their operations and forming a new strategy, possibly a restructure resulting in a new leadership team and new account manager, is a time when the customer can suffer due to lack of focus from the service provider.

In some cases the customer may feel unsure about the future, concerned about service level and service quality, particularly relevant if they have previously enjoyed a good experience.

Customers who may feel exposed to the company experience are far more likely to listen to a competitor with the possibility of changing suppliers. Competitors will arm themselves with as many tools (failed back office system integration is one example) as they can, to increase their chances of convincing the customer to switch their business.

Internally the companies may be weakened by the integration, with the threat of an organisational restructure, employees feel stressed and naturally worry about the fate of their jobs.

When companies merge, they embark on seemingly minor changes that can make a big difference to customers, causing even the most loyal to re-evaluate their relationship with the company. Integration decisions come with an inherent trade-off: if you are making changes in your operations, particularly changes that benefit your bottom line at the expense of your customers, you can expect to pay a price in the top line. Companies tend to focus on quickly reducing costs and worry mostly about the biggest things that can go wrong, such as major technology disasters, rather than long-term customer attrition. Despite their low expectations of merged companies, the reality is that customers demand consistent and seamless services across both merged companies from the start. If they don’t get them, they defect. Companies that do the best job of retaining customers (and attracting new ones) adopt the customer’s view of the merger, as they make important integration decisions.

Adopting the customer’s point of view does not change the fundamental activities required in merger integration. Instead, it allows companies to sequence and coordinate customer-facing changes in ways that create a better customer experience.

There are three key initiatives that can improve customer retention in a merger:

  • Customer experience.
  • Communication external and internal.
  • Empower employees.

Mergers aren’t easy, and they raise real risks that customers may exit. The merger integration process brings with it a natural opportunity to re-evaluate and even improve the overall customer experience.

It will be interesting to see the effect this merger has on BMC clients that purchase both print and stationery from Banner. Will it prove to be a good opportunity for these clients to review the market?