Hospital M&A’s: 5 tips for managing brand architecture
Hospital M&A’s, as well as diversification and new service line offerings –– all impact your brand portfolio and the design of your brand architecture (defined as how you organize and name your services in order to show consumers the differences and similarities between them).
Why Brand Architecture Matters
Consumer goods companies like Procter & Gamble, Nestle and Unilever have long had established brand architecture frameworks and guidelines. And they do so because a well-thought out brand architecture is critical to:
a. supporting your organization’s vision, business goals and strategies
b. providing the right marketplace visibility to your services
c. the ability for consumers to simply shop them; and
d. all brands working together in the portfolio to grow value back to your healthcare system or hospital brand
This is particularly challenging in a dynamic market like healthcare where your portfolios are always being pushed and pulled. So how to ensure a brand architecture that keeps pace with any mergers, acquisitions or any other new strategic initiative in your healthcare system or hospital?
Five Brand Architecture Tips
1. Start with an audit. Chart your organization-wide brand architecture to understand and assess the existing relationships between the different brands in your portfolio and how they relate to any master brand names and your corporate brand name. It’s a crucial starting point for evaluating, refining and optimizing your portfolio. Critical to remember is that any form of brand architecture should ultimately be developed from your consumers’ point of view and not from your internal vantage point.
2. Brand Portfolio Evaluation. Through this exercise, your goal is to answer these six questions:
1. What story is your brand portfolio telling from a customer perspective?
2. Do each of the brands in your portfolio have clearly defined roles and relationships; is there sufficient separation/synergy between them?
3. How do your different brands contribute to building strategic advantage, and current/future growth and profitability?
4. Do you sufficiently cover the market given the needs of your priority services and key audiences?
5. Does market attractiveness (size and potential growth) merit investment?
6. How to integrate newly acquired brands into the portfolio given above?
The outcome of this exercise should be a streamlined set of brands which have been identified as strategic drivers of growth for your organization and are clearly positioned both internally and externally.
3.Final Brand Architecture Decision. Before the final architecture is implemented, multiple scenarios should be considered. They should always do justice to current brand relationships but should also be designed with the future in mind. The key elements that influence your decision include:
1. Number of levels required in the architecture hierarchy
2. Organization branding strategy (e.g. branded house, house of brands, endorsed brands etc.)
3. Own and partner provider brand portfolios
4. Future scenarios that might need to be accommodated
4. Brand Naming Convention Guidelines. These are developed to act as a set of principles for naming new entities and service lines. Depending on the final brand architecture, naming guidelines should be able to help in naming new offerings by following the principles of the architecture. Established naming guidelines can also help when an organization acquires or merges brands. If any of the acquired brands are market leaders or have dominant market shares, then the organization can use the naming guidelines in conjunction with the brand architecture framework to decide what form of endorsement, co-branding, independent branding etc. is required.
5. Implementation and Communication. The fifth, and often overlooked stage, is the formal communication of the final brand architecture throughout the organization. This is key to getting everyone on the same page about successful brand architecture and brand and portfolio management. Brand books can be developed that can visually depict the architecture, individual training sessions and collaborative workshops can be conducted to educate on the architecture, and guidelines can be established for correctly using the architecture to develop new brands.
First. In healthcare organizations, where change is constant, we believe that annual brand architecture audits should become common practice. They are crucial strategic checks to assess whether ever expanding brand portfolios are still making sense and whether brand management practices are showing the required results or not.
Second. Given a healthcare organizations vast portfolio of services, we also suggest putting an individual or a group in the role of brand custodian. They should be responsible for ensuring consistency of brand positioning across all entities and service lines, in sync with your brand architecture framework and guidelines.
If have any questions or would like to about your health system or hospital M&A, reach out to us.