Uneasy customers and uneasy employees can do great damage to a mega-merger, so internal and external communications will have to be a priority as the $58 billion deal progresses.
"One of the biggest issues is merging the cultures. ... You can accelerate that process with a good employee communications program and a good advertising program," said Jeff DeJoseph, chief strategic officer at Doremus, Omnicom Group's corporate advertising specialist.
Mr. DeJoseph contrasted the ill-fated America Online and Time Warner merger in 2000 with the smooth 1998 merger of NationsBank and Bank of America. The two sides of the AOL merger acted "like two separate companies trading under one symbol," while NationsBank communicated consistently with one voice, he said. Nationsbank has thrived--last November, it agreed to acquire FleetBoston--while Time Warner suffered and eventually dropped AOL from its name.
Since the Chase/Bank One merger plan projects 10,000 jobs will be cut, "selling it and marketing it within the organization has to be job one," said Robert Leon, a marketing professor at Ohio State University's Fisher School of Business. Those employees are the first line of communication to the customers, who will have to be reassured as well, he said.
"These customers need to hear it from a voice, and not from a letter," he said.
The merger, expected to close at mid-year, will create a network of 2,300 retail bank branches in 17 states and the largest private bank in the U.S., which can create an opening for rivals to poach both key employees and customers. Rivals will be "marketing themselves like crazy" to lure those customers who are turned off by changes in their local bank, Mr. Leon said.
Overall, the merger is "a great blend of geographic and consumer brands," said Ralph Walkling, a professor of finance at the Fisher School of Business. He noted Bank One has a strong brand in credit cards and retail banking in the Midwest, while JP Morgan has a strong private banking and international reputation and Chase is a strong presence in retail banking in the northeast.
JP Morgan Chase hired Interpublic Group of Cos.' The Martin Agency, Richmond, Virginia, last month to handle advertising for Chase Consumer Financial Services, the unit covering its retail businesses. A new campaign from the agency was expected early this year.
A spokesman for The Martin Agency deferred comment to JP Morgan Chase, saying it was too soon to know what will happen with the campaign, but noted the agency "is ready to help our client, Chase, in any issues that arise." He added the firm has the advantage of having been Bank One's agency of record from 1989 to 1999.
In the conference call announcing the deal, Bank One CEO James Dimon said the company will continue to market different brands to different customer bases.
"We even had a little chat about having a JP Morgan-branded card some day," said Mr. Dimon, who will be president of the merged company. The announcement also said the combined company will operate under the existing brands while conducting research to develop a post-merger retail brand strategy.
That's an opportunity to create a new brand and bring some much-needed excitement to the banking sector, said Shaz Khang, head of strategy at brand consultancy Wolff Olins, New York. Smaller banks such as Commerce Bank are now trying to reinvent banking with innovative service, but the Chase/Bank One combination could take it further, as the second-largest U.S. bank.
"They're in a situation like that of Avis vs. Hertz. They can bring in some innovation and become the company that tries harder," she said.