Branding a spin-off – how to get it right

Back in April this year, IBM sold their marketing platform Watson Marketing to private equity firm Centerbridge Partners, with the ambition to create the next generation leader of marketing and commerce software solutions. Earlier this week they launched their new name (Acoustic), brand and website. Whilst it is too early to say anything about the future of the new business, history shows that spin-offs can lead to success. The Bloomberg US Spin-Off Index has increased more than 18% in the first 6 months of 2019 and since its inception in 2002 it has produced a total return of 973%* (compared to 342% for the S&P 500 index)*. But spin-offs can also be a turbulent time for businesses. Employees may feel anxious about their future, investors are impatiently waiting to cast their verdict on the new business, and customers need reassurance that products or services will continue without any disruption.

When we worked on the spin-off rebrand of Halyard Health into Avanos , we saw first-hand how brand played a crucial role in spin-off success and creating a new business that stakeholders believe in and want to be part of. Below we share four valuable lessons we learnt along the way:

  1. Get the story right. This is a once in a lifetime opportunity to establish a refreshed direction to inspire stakeholders. Take the time to craft a compelling and differentiated brand story that supports your business strategy. Think 5-10 years ahead, what do you want this new company to be known for? What, if anything, should be retained from the old company? What should you be doing differently as a new company? How much of a radical change must be undertaken if you want to create a successful new player?
  2. Naming takes time. Naming requires patience and time. It’s one of the most fun parts when creating a new brand, but also very complex. Name generation, trademark checks, linguistics checks and domain checks can in some cases take up to four to five months. So, start generating names as soon as the brand story has been developed to ensure you leave yourself enough time to do all the legal checks.
  3. Tap into your employees' energy. Use your employees’ frontline experience to shape the new brand. Engage them in workshops and interviews to demonstrate you take their opinions and input seriously. A strong brand story can become a positive guiding light for employees, even more so if they’ve been part of shaping that story from the very beginning.
  4. Don’t lose sight of the future. With everyone focused on getting everything ready for Day One, it’s easy to lose sight of what happens afterwards. Once the big launch has been and gone, companies must keep the momentum going. Develop a long-term strategy for how to engage your audiences, what your message is and the channels and tactics to reach them.

In short, the spin-offs that make brand a priority rather than an after-thought are one step closer to success. We will be watching Acoustic closely in the next few months to see if they can pull it off…

* https://www.forbes.com/sites/joecornell/2019/03/05/spin-offs-outperforming-the-market-this-year/#4ade1d7633bb

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