Marketing 911
Marketing 911, is the podcast where we tackle the toughest marketing challenges at the executive level.
Whether you're navigating complex strategies, trying to reach your target audience, or facing shifting market dynamics, we're here to provide you with actionable solutions.
From digital transformation to customer retention, if it's a marketing crisis, we're here to help you solve it—before it turns into a full-blown emergency.
Marketing 911
Mastering Company Acquisitions: Navigating Cultural Compatibility and Marketing Challenges
Master the art of successful company acquisitions and integrations in this engaging episode. Discover the critical importance of cultural compatibility and strategic planning as we unravel the challenges and opportunities faced by businesses when expanding their product lines or merging with other entities. From historical successes to cautionary tales, we explore how aligning company cultures and understanding target audiences can lead to seamless integrations, while mismatches can spell disaster. Get ready to dive into the intricate world of acquisitions and integrations with our insightful guest experts.
Join us as we navigate the complex marketing hurdles in company acquisitions and mergers. Using real-world examples, we unpack the complexities of maintaining a cohesive brand identity amid organizational changes. Explore how misalignment can lead to fragmented marketing efforts and the dilution of brand messaging, and why some mergers succeed where others falter. Reflect on timeless marketing principles from the "22 Immutable Laws of Marketing" and discover how to navigate these challenging yet potentially rewarding endeavors. Tune in to gain valuable insights and strategies to help businesses thrive in the ever-evolving landscape of company acquisitions and integrations.
Welcome to Marketing 911. I'm Richard Bliss, your co-host, and I'm joined by my other co-host.
Speaker 2:Brian Backstrand, Good morning.
Speaker 1:Richard, all right. Well, what are we going to talk about today? Because there's a whole lot going on in the marketing world, some new, some old. What do you think we got? Some ideas.
Speaker 2:Yeah. So I think product line extensions, acquisitions you know, you can see it in so many spaces that are happening right now, whether it's the healthcare space, where hospitals are acquiring other hospitals and their capabilities, or the technology space, so I think that would be a great one to dive into. It can certainly make or break some companies.
Speaker 1:It can. We've certainly seen over time that, haven't we? That some terribly disastrous decisions right, the coming together of companies, or even on the consumer side just I mean, I'm thinking of mustard. If I walk into the grocery store there's 30 different kinds of mustard out there and that's kind of the line extension idea. But in the B2B space it can be slightly different. I think you were talking about like when two companies come together, and you've got some experience with that.
Speaker 2:Yeah, a hundred percent. I think you know one of the companies I was at were in the network environment and they went out and purchased a company that was focused on applications. It was an excellent line extension. Why it's the same persona. The sales team didn't have to learn new attributes of personas. It was the people they were already selling to. They were very comfortable in that space and it was a nice offer to go back into existing customers and offer them something new. So that actually ended up being highly successful in many ways and actually led to an acquisition from another company.
Speaker 1:Now that sounds easy. That sounds like okay. What's the problem? We'll just hey, we need new customers, revenue's down, we need new customers. We'll just go buy an extension to our line, give them customer something kind of new. Is that what we're talking about with line extension?
Speaker 2:Well, I think it falls into a few categories and you can't underestimate culture as an example. So I think one of the main reasons why that worked really well is the culture of the company acquired was very much aligned to the culture of the company that we had. So it was a seamless integration in terms of, you know, not the infighting that you can sometimes see. But getting back to your question, I think companies do it for several reasons. One is maybe sales are slowing with the existing product line that they have and they can make a decision hey, we need to extend this or get into a new market. The decision comes okay, does our engineering organization do it? Or is it easier to go out and purchase a company that already is in that space and bring that on board? And the companies often look at it and say, yeah, this is new revenue, new customers, terrific opportunity. But there's a lot to integrating it and I think that's where things may not go as well as companies at old.
Speaker 1:You know I'm going to use the Wayback Machine here, OK, integrating it, and I think that's where things may not go as well as companies at old. You know, I'm going to use the Wayback Machine here, Okay, so some of our audience might not remember, but I went through one of these and it was disastrous. It was the Novell acquisition of WordPerfect Corporation way back in the nineties and I remember an analyst saying it was like mixing horse manure and ice cream it ruined the ice cream and it did for the horse manure right. But the point was at the time Novell, a technology network, networking, behind the scenes plumbing company, acquired WordPerfect an end user experience, acquired WordPerfect an end-user experience, almost consumer product right, Because at the time they were under pressure from Microsoft who was doing everything with Microsoft Office. But it was a disaster and being inside of it I could recognize it because you're bringing it up.
Speaker 1:The engineers talked to different audiences, they had different buyers, they had different messages and it was a whole different experience and they ended up spinning off it to Corel. But they kept the piece that was part of that enterprise and that was the email system which became Novell GroupWise. But that was way back and a lot of people on the call aren't going to remember that, but in this case they had all the marketing resources suddenly got stolen from the consumer product. You know where I'm going with this. Help me understand this.
Speaker 2:Yeah, 100%. I think one of the things that you mentioned which unfortunately comes up is engineering. So you bring in a successful company with a solid engineering organization that's created a terrific product. They're not going to take a back seat easily, even though they're being acquired from another company, right? So you have that internal politics. I remember I was at one company very successful, and we went out and purchased a pretty large company that was being successful. They actually sold to the same user, which is a positive. However, it was for a different type of application, and what ended up happening was it took several years to integrate that company into the parent. Why is that? Well, because it was highly successful. The engineering group had special skills that they kept the engineering team separate. They kept the sales team separate, even the website separate. And why didn't they just integrate? Well, because there wasn't a way to unify the messaging, the positioning, in a way that didn't result in us looking at two different technologies that could help the customer, and so it could have been really successful. It wasn't.
Speaker 1:And we see this happen over and over and over again, right where they make the acquisition and then they just kill it. And I don't mean kill it on purpose, but it just. I guess culture has a lot more to do with it than people give it credit. For when decision makers, having been part of that, are making that decision to do an acquisition, they're not thinking of that cultural side, are they? They're not thinking about the actual integration on the back end.
Speaker 2:Yeah, I think culture is a huge piece of it. I was actually at a startup with a less experienced executive team and we ended up purchasing a company that aligned very well from a technology standpoint. However, the company we acquired, their executive team was actually really strong and more seasoned. Keep in mind this was a small startup and there was a lot of internal politics and you know a lot of stuff going on. It never really integrated. It almost became neither one was going to give in and the parent executive team wasn't willing to make some big changes and get rid of people, etc. Ultimately, that company was acquired as well, but that impacted sales negatively and the internal politics was really demoralizing.
Speaker 1:Well, in our space we see the Dell EMC VMware merger. Right, that became, when we talk about line extension, that you could go and buy anything, any product. But how do you market that? Because we're in marketing how do you market when you have a thousand products, different ideas? Because when those mergers happen, the marketing teams don't double, the budget doesn't double, does it?
Speaker 2:No, 100%, absolutely not. And in most cases the marketing budget gets split, particularly if you're acquiring a company that keeps its own website. Why? Because they've got a user base that's used to going there, etc. They don't want to get buried within the other website. You've got marketing teams that have been very good at doing what they're doing. You've got what ends up being sales organizations that may have overlays. It becomes very, very complex and, from a marketing standpoint, you always want to be marketing in terms of the use case, the problems that your customers are facing and how your company has those solutions, and we all know this right. Consistency in messaging, consistency in positioning, is critical. Well, when you add in another company, particularly if it's a larger one, and now they've got a very loyal customer base, they've got a product that's going to maintain, but you got this inside, push and pull around, how do we lead and how do we have a unified messaging? It becomes very, very difficult. I mean, emc is in my backyard over here in Boston.
Speaker 1:I had actual Nobody can tell from your accent. Nobody can tell from your accent and.
Speaker 2:I went to Dunkin' Donuts this morning oh my gosh. So EMCs in my backyard. That was, as you can imagine, a huge disruption. I had family members who actually worked there. And in came Dell and it was kind of you moved down to Texas or you're out of a job and the disruption was a good two years because they moved out so many people. So that's a really good example of ones that don't work smoothly.
Speaker 1:And talking about another Boston company, cambridge Partners, many years ago, because they came in I'm going again way back.
Speaker 1:I got to get out of the nineties here but they came in and acquired Novell and I was there when that happened and the entire three layers of management at Novell got scraped away, literally just got fired, and this tiny company they had acquired there was.
Speaker 1:The joke is that the tiny company that was acquired brought you, talked about senior management, they all took over and fired everybody who had already been there and, yeah, it was a massive upheaval. I'm not sure where this episode is going, but what we're talking about really is about cultural fit extensions, the idea of marketing being split, because you and I both know and you just said it the consistency, and oftentimes inexperienced executives get tired of their marketing message, oftentimes before their customers do, and so they're like, oh, we got to change, we need something new, and so they're constantly looking for that silver bullet to solve that problem. And I think those mergers and acquisitions and line extensions are a knee-jerk reaction to trying to attempt to solve a panic problem, and oftentimes that panic problem I think you mentioned it at one point in our conversations is revenue dropping revenue right.
Speaker 2:That's right. You have the valley of hey, you have an acquisition, you may see a decrease in sales, but ultimately the vision is that things are going to take off. But they don't always take off, and I think from a marketing messaging standpoint particularly you know we talked about it before Companies say, hey, we see this capability and technology starting to take off in the market, and technology starting to take off in the market it's not exactly our persona, but it's another persona, but our capabilities are similar. Well, now, the messaging to the new persona is different than the messaging that you've been using and so then it becomes a okay, do we need two separate campaigns, two separate sets of messaging? We have two separate personas who may be going to different events and trade shows and conferences. So you can see how the marketing budget starts to get sliced and sliced and the messaging becomes I won't say inconsistent, just dual messaging or triple messaging in the marketplace consistent just dual messaging or triple messaging in the marketplace.
Speaker 1:And that becomes really hard because now the decision was, hey, we're going to have a bigger pie to eat from, a bigger pool to swim in, a bigger ocean to fish in, but what you've just identified is that the reality is that, no, you've actually got a smaller pie to eat from, because you've had to separate your market, with less budget, tighter focus, and yet you're distracted with three, four different markets you're trying to go into simultaneously, and we've seen this over and over and over again. I mean, let's use Google, for example. Their line extension was Google Meet, google Talk, google Chat, google whatever, whatever, whatever. Some of it sticks, but some of it just doesn't fly and you got to kill it after a while because just because they bought one product doesn't mean they're going to buy the next product from you, and I think that becomes very confusing for the audience out there. Do we see anything? Do we see it ever working, or is there anywhere? I mean, what would be some examples today? I keep thinking of Disney and acquisitions they've made and all of that that's going on outside in the consumer market. I think of other products.
Speaker 1:Zoom. Zoom's done a great job of not doing line extension. I think, although you have Zoom workplace, zoom, meetings, zoom business Zoom, I get confused. We're recording this on a Zoom call Webex. Right, there's another company with Cisco kind of all over the place. Are we seeing any success out there? I don't know. It's hard to tell because it's so chaotic at the moment, or I don't know, it's hard to tell because it's so chaotic at the moment.
Speaker 2:Yeah, I think. Well, I mean I think throughout history there certainly has been success and consolidation that has worked, I think, where you end up seeing the most success. I remember the you know Internet service provider market. I remember going you know you want to talk about the 90s. I remember there was an internet service provider conference because there were 7,000 ISPs 7,000. I mean, I know this because I was working at a company that was an ISP. And now where are we today? You've got two or three right Because just massive consolidation and you know, companies that were too small to stay in the market but those consolidations actually ended up being successful. I mean, you see some of it today from a cloud service provider standpoint. Right, you've got a lot of smaller cloud service providers that are being gobbled up by larger. Quote those. There's numerous examples of those being successful right, because it's the exact same product line, it's just a bigger customer base and it's a simple service model, particularly from a SaaS standpoint. So there are quite a few successes.
Speaker 1:And you bring up an interesting point that we're going to have to talk about again, and that is in this book, right, the 22 Immutable Law laws of marketing that we're kind of drawing this from the line extension. Uh, one of them was 40 years old. That is hard to believe because I can just remember. I mean, are we that old?
Speaker 2:I guess so, but we shouldn't mention that it's a good thing that I wasn't born yet when it came out, but I did read it.
Speaker 1:Okay, yeah, good thing we're on audio only because otherwise people would see right through that one. Okay, because one of the ones I want to talk about in one of our future episodes or a different episode is this idea of duality, because you just talked about it. Isps where there were a thousand and now there's only a few. You don't even think about an ISP anymore. I don't know. You get Comcast or you get AT&T Fiber. You don't have an ISP anymore per se. But also you've got on the cloud side that one I really like because we're down to three, and then the laws of duality in a marketing is generally you'll have a dominant one. So who's the dominant cloud provider today?
Speaker 2:AWS, I would say AWS.
Speaker 1:They're the gorilla in the space, and then the law says that you can have a gorilla, and then you can have a couple of chimps, and so one and two. Now they might argue with this, but one and two are going to be Google and Microsoft, right, yep, okay, who's after that? We don't know, and this also is another rule of marketing that it's going to be interesting for us to talk about how how yeah I think in that example you do.
Speaker 2:You have the massive providers. So, according to uh the book 40 years ago, the 22 laws of marketing. Their position at that time was if you're not one or two or maybe three, forget about it Like you need to get out of the space. Well, let's take the example you're talking about. You do have AWS, google, massive, massive Microsoft Azure. While there is a lot of space for regional cloud providers, why More control? Smaller companies don't necessarily feel comfortable putting their content. There are certain industries that don't feel comfortable necessarily putting their content in these huge companies and you get better service at a regional level. So there are a lot of regional cloud service providers that are still in play. They can still grow and they still will be successful. So their rule of you're either one, two or find something new to do for a living doesn't really apply these days.
Speaker 1:But Jeffrey Moore's crossing the chasm, because he really talked about your gorilla, your chimps and your monkeys, and so the gorillas AWS talked about your gorilla, your chimps and your monkeys, and so the gorillas AWS.
Speaker 1:You usually have one or two chimps in the market. That's going to be Azure and Google, and then you're going to have a whole bunch of monkeys right, A whole bunch of little ones. And as long as you understand where you're at in the space and who you're serving and who you're serving you can thrive, and particularly in today's world where it's so niche right. The ability to go to a niche market and dominate has become so much easier in today's world because of the cloud, because of the way technology works, and so trying to be everything to everyone is really not the way it's going to work. And so, when we talk about line extension, focus, right. I think that's the takeaway from this episode is you really need to focus, focus, whether it's a cultural focus, whether it's a product focus, a market focus. You really need to focus on what you're trying to do, isn't it?
Speaker 2:Yeah, a hundred percent, and I think you know some of the examples that they gave in that book 40 years ago. They were talking about Burger King was offering, you know, should we offer hot dogs, Should we offer pizza? Right, and just didn't work out. Why, focus on what you're really, really good at, and then you know. Getting back to just closing off on this latter approach of you know, the number one two, the example we just gave of cloud providers on one end of the spectrum and the example we gave on ISPs, the other. There's only a couple ISPs today. There's no regional ISPs, there's no small mom and pops like there were, like there were, and I think a lot of that has to do with the ability to lay the cable and have a large organization that you're able to deploy in huge marketing budgets.
Speaker 1:And we can talk about this in the future, but it comes down to mobile carrier providers, right, the Verizons of the world. We see this over and over in big markets, that type of thing, and I think we'll enjoy having that discussion. This has been great. I think our time's up. I'm looking forward to the more conversations on this topic and some other ones, and thank you for listening. I'm going to just tell our audience thanks for listening and if you have some questions, you can reach out to us. Just give us your next question. We'll talk about some of that and we'll have that on. I'm going to say thank you for listening. I've been enjoying this with Brian. Brian, I think we've got something going here. What do you think?
Speaker 2:Yeah, I think we're on to something and it's been a pleasure. Look forward to the next one.
Speaker 1:I look forward to the next one as well. Thank you for listening. Take care.
