Negotiations during a company (or business unit) split can become quite complex. If you hit a roadblock, it might be that a well-founded budget for renaming and rebranding is the unknown factor. In this case, concerning an educational group, the buyer lacked the substantive knowledge to provide a solid financial rationale. We developed this rationale, resulting in the successful conclusion of the negotiation.
Negotiation Stalled Over Brand Introduction Budget
Through their M&A advisor (a Big Five company), the selling party asked us for advice to help smooth out the negotiations regarding the rebranding aspect.
A part of this educational group had to be separated, but the negotiations were stuck on multiple points. One issue was that after the split, the entity being sold had to continue under a new name. A third party had drawn up a budget for creating and introducing a new organizational name in the market. This budget seemed rather generous. We were asked to review the budget from that third party and assess whether it was realistic.
The Power of a Targeted Approach
We prepared a counterproposal, including a detailed rationale for the complete naming, rebranding, and market introduction of the new brand—an alternative approach with at least the same outcome.
Due to time constraints, we had to devise a fast and efficient approach, one that had to be completed within two to three weeks. Given the stakes, involving millions of euros, the approach also had to be effective. Therefore, we took the following steps:
- Analyzing the current situation, reviewing existing reports, and defining our approach;
- Conducting a brief market and competitive analysis;
- Calculating the value of the current brand;
- Conducting online interviews with stakeholders, such as students and employers, to gain better insight into their needs and ideas;
- Performing a thorough check of the structure, approach, and pricing for rebranding;
- Drafting the counterproposal for the approach and the associated budget;
- Sharing and presenting our findings.
A Better Budget Through a Targeted Campaign
The fact that our approach resulted in a nearly 50% reduction in the buyer’s estimated costs was great, but the key factor was the targeted approach. A different way of thinking led to:
- Een compleet andere manier van de activatie van de rebranding. Wij gingen voor lokaal in plaats van meteen een landelijke campagne met een aantal voordelen:
- More targeted reach for the audience
- Better use of regional brand awareness
- And not unimportant: lower costs
- A well-supported brand valuation that allowed for sharper negotiations.
The budget for naming and rebranding provided by the third party was comparable to ours. The major difference lay in the local approach to media purchasing for the market introduction. By purchasing media locally (since our interviews revealed how to best reach the target audience), we were able to reduce the media budget by approximately 50%.
Our Contribution to the Negotiations Added:
- A new perspective on rebranding;
- A different activation strategy for the new brand;
- Lower costs;
- A rationale for the value of the existing brand.
This gave our client the “ammunition” to negotiate a better deal. One week after delivering our budget proposal, we received word that the negotiations on this point had been swiftly concluded.
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