Why It’s Time to Unify the House
The insurance industry relishes mergers and acquisitions. In the recent decade, the buying has been driven by low interest rates, lots of available capital, and a view that this is a business offering stable, long-term returns in a world otherwise gone nutty.
For merging carriers, the batting ratio on success has been way below a thousand. Let’s call it .500, and it’s mostly due to inattention to culture. As Doctor Phil said once on Oprah, “If you’re not nurturin’, you’re competin’!” The result: a messy marriage.
We witness a similar phenomenon in the wholesale and retail agent and broker space, which has seen brisk M&A action for years. These firms stockpiled subsidiaries, small and large. More messy marriages.
Often, the acquirees being rolled in are 100 years old; perhaps started by Mr. Smith and Mr. Jones back in the 1920s and passed down through the generations. Today, the visual identity (name, logo, tagline) of Smith & Jones still looks right — circa “Leave It to Beaver.”
The folks buying “Smith & Jones” often don’t want to rock the boat. They retain the visual identities, tone, font, color and personality and throw them on the website under “Our Affiliates” or “Our Divisions.” Meanwhile, the mother ship suffers as the website starts to look like a yard sale. Amid this leadership void, the subsidiary owners will continue to freelance on brand and culture.
Let’s get real. If you’re the buyer, you get to make the call on brand, culture and visual identity. Don’t placate the former owners and pretend all will be OK. Sure, celebrate the Smith & Jones history. Bring that messaging into your marketing. Be sure to communicate early and often with customers and employees. Keep the story clean, positive, relevant. Build clarity and unity.
Insurance professionals can’t help themselves. They’re numbers people. (How are sales going this week, this month, this quarter?) They look at branding and marketing like an expense, not an investment; a tactic, not an investment; a project, not a strategy. It seems easier and less expensive to leave Smith & Jones alone. “We have acquired Smith & Jones. Like always, we are laser-focused a sales growth. Nothing to see here — it’ll be business as usual!”
What’s truly expensive? Doing nothing.
If you have a smart, long-term investment mentality, it makes sense to save as much as you can, starting as early as you can. Likewise, firms making the decision earlier to invest in a unified brand will come out ahead because they minimize lost opportunities and build momentum and marketplace clarity.
Smart insurance firms have an operating procedure for folding acquired firms, subsidiaries, operating units and programs into the mother ship. Sometimes the transition is done immediately. Other times they “sow seeds” for gradual change over the course of, say, 12 months, and along the way they delight and surprise customers and associates with little gifts, surprises and clever messaging. It is well managed. There is a plan. It’s not left to chance.
In my view, firms doing the buying should be focused on creating and maintaining a branded house. This is the Apple approach. The alternative is Proctor & Gamble, the house of brands. Unless you’re going to pour money into branding each of these divisions or companies — a la Pampers, Head & Shoulders and Bounty — you should unify them.
You brought the skills and specialties and niches of these firms together under your roof for a reason — get them talking with each other. Each of their clients and partners likely has other needs their new teammates can meet. Why let those business lines go to some other firm? Broader, deeper relationships with your clients are more valuable and retain better.
A branded house also helps create a stronger sense of teamwork, where your colleagues see each other as experts who can help them, and they in turn can help. It also can help you create career mobility and progression paths more easily.
Are there exceptions? In certain cases, the firm you’re buying has more brand awareness and stronger equity in the visual identity (name, logo and tagline) than yours. Other times, you face marketing channel conflict (e.g., direct-to-consumer vs. agent) and you should consider complete separation. These units probably wouldn’t belong on the same website.
But most times, the insurance brands that stand the test of time are flying under a single banner, provide clarity to the marketplace, and unite associates and business partners around a positive, powerful culture.