Dealmaking: Proposition first, purpose later

The most effective post-deal rebrands don't get bogged down in vision and purpose-setting: they use the exercise to fundamentally define their offer to customers.

When brand agencies think of their role in clients’ dealmaking, many usually frame brand as a “bridge”. A connector. A magic wand. And usually this starts with defining a purpose for the newly minted organisation to rally around, whilst it works out the nuts and bolts post-deal.

This is impractical. More often than not, it adds to the noise without creating clarity. And it devalues the exercise, because brand shouldn’t be used as a ‘bridge’. It is an opportunity to reassess and construct the future of the business offer.

For clients undergoing a major transformation in the wake of, or in the lead-up to a deal, the most successful rebrands have defined the ‘what’ (the proposition they’re going to market with) before the ‘why’ (setting a vision or a purpose).

In part, success is down to what it signals to the market: a sound proposition is the basis for a tight investor story, as well as creating clarity for customers. Whereas purpose really comes into its own when making sense of new operations to employees, as they navigate the business transition.

Building a brand when you don’t know what you’re branding

This year, deal activity is projected to (and has already been on the) rise - across M&As, Spin-offs, IPOs, Joint Ventures, and beyond. Some of this will pass unnoticed. But for many organisations this will trigger a rebrand, or at the very least raise questions about how fit for purpose their current brand is.

A rebrand is expensive. And it’s high-stakes because it sets an expectation that your business then needs to live up to. It also impacts every touchpoint; every piece of communication, your customer experience and your offer to talent. So you need to get it right.

But this is tricky when the rebrand is happening in parallel to a deal or transaction that’s rerouting the future of your business. Particularly for M&A activity, as the impetus tends to be primarily financial; driven by synergies, cost savings, capability-building or a need for growth via new avenues.

But this means there’s rarely a strategy in place for what that transaction means in practice. AKA: what you’re literally going to do differently for a customer; the specifics of how your offer might change.

And so the pressure to move quickly can mean you start defining a brand before you know what it is you’re branding. This is a dangerous game: misapplied branding can create complexity at a time when clarity is vital.

Unfortunately, this is the opposite of what most brand agencies advise.

If you don’t have a “what”, you don’t have a strategy

Without a clear sense of the ‘what’, it’s impossible to know whether the brand you’re building is the right brand for your future.

Businesses at points of inflection need a clear strategy to guide their decision-making. Visions, purposes and architectures are all powerful tools. But created prematurely, they add to the noise of an already chaotic period.

Without clarity on the ‘what’, they tend to become quite vague. “Reimagine”, “better”, “for all” and “together” are all words that inevitably appear in vision and purpose statements. They’re broad and all-encompassing enough to sound inspiring, but not directive or specific enough to guide. “Reimagine” how? What does “better” look like? More importantly, what doesn’t it look like?

Architecture is a case in point: a good architecture should support the kind of business you want to build. If you’re unclear on how your customers are going to interact with that business, you’ll be hard-pressed to determine the right approach for the job. Plus, architecture usually involves retiring or changing brands, making it a highly emotive process. Without the objectivity of a concrete ‘what’, making those decisions becomes impossible.

Brand as a tool to get specific

‘Concrete’ is the operative word here. For example, in a world where seemingly every business thinks its future is an ‘ecosystem’, the question becomes: “Why should customers choose your ecosystem over a competitor’s? Or over Meta’s, Apple’s or Amazon’s?”

Talking about a future business model might send a short-term signal to prospective investors or analysts that you’re investing in change. But it also sets the doomsday clock ticking: typically we estimate you have about 7 quarters to prove to analysts that you’ve got substance behind the signal.

All of which suggests a more practical use for brand during points of inflection.

A brand skillset is all about getting under the skin of a customer, to pinpoint their needs and marry them with what makes your business special. Good brand consultants use this to give you a storytelling ‘hook’ for your changing business. But great ones use this to help you fundamentally define your offer:

Are you a ride-hailing app or a mobility platform?
The former allows you to sell more taxi journeys. The latter means you can branch into on-demand deliveries, logistics and, eventually, travel.

Do Guinness and Burgers make for something substantial?
At first investors weren’t sure of the logic for the merger of Guinness (a drinks business including Johnnie Walker and Gordon’s Gin) and Grand Met (a food and beverage business including Smirnoff, Burger King and Haagen-Dazs). But after the launch of Diageo, which included a clear proposition built on bringing some of the world's most pleasurable food and drink to more people every day, they got the point.

Is it about being Profit-led or is there a desire to be something bigger?
Asset management companies typically focus on profits and returns but Allspring leadership had the desire to not only do well but to do good - that meant thinking more holistically and making investing about more than traditional returns.

Some of the most impactful work we’ve done has been with clients brave enough to admit their future was uncertain. And so we’ve worked together with their product, ops and marketing teams to define what it could look like. What does this deal mean for the products you might start to pilot in the next two years? What sort of experience will those products deliver? This isn’t about defining the entire product strategy for the next decade. It’s about identifying product pilots, MVPs and a broad roadmap that can act as an anchor in the short-to-medium term.

What this does is force you to build bottom-up: thinking about what the business inflection point means for customers or end-users. It brings new focus to what the future business could do, which becomes a yardstick for future strategic decisions. And it creates concrete proof points during a period of flux, that can hint at the direction of travel and give you something solid to build a brand around.

Proposition before purpose

To conclude, use brand to define the proposition first. Without one, what you’ve got is at best a “holding narrative” that will need to be revisited as the business evolves (expensive). At worst, you may have the figleaf of a purpose that reassures stakeholders. With customers quick to notice it means little in real terms for them. And analysts sure to follow.

Brand isn’t a “bridge”, or a magic wand. It’s an opportunity. It’s a chance to evaluate your business from the inside out, from the perspective of your customers and your employees to shape your future offer. Most importantly, it’s a business driver that allows you to amplify a transaction: providing a way to translate it into concrete, value-driving propositions.