Let’s get down to it. A customer-focused program during Mergers and Acquisitions (M&As) should be focused on…that’s right! The customer!
There are two primary customer bases in any M&A: the acquiring company’s customer base and the acquired company’s customer base. In some M&As, the two customer bases are more alike than different but even when that is the case, the acquiring company still faces the challenge of managing differences in customers’ experience leading up to the point of acquisition as well as in customers’ expectations going forward.
So. What makes for a good customer-focused program during a merger and/or acquisition? Here are 9 key guidelines:
1) Create structure and accountability: Treat the customer-experience aspect of mergers or acquisitions as its own program or business at a corporate level within the business (such as coming out of the M&A Office). This means that the program receives budget and resources, a program manager, and is central enough that all other channels/businesses working on the M&A will need to partner with the program lead.
2) Get executive endorsement: Make sure you have management buy-in on the importance of this program. This is critical. M&As tend to run at the speed of light once the gates are lifted. Executive endorsement prevents businesses from ignoring the M&A customer experience program and ensures an agreed upon escalation path should executive involvement be required.
3) Get the right people involved: When possible, hire/assign a program manager who has been trained in Human Experience related fields, such as Human Factors or Cognitive Psychology—and has worked in high stakes business environments, demonstrating business acumen, ability to generate and implement short cycle strategies, and set and deliver measurable results.
Additionally, make sure a representative from each of the businesses involved in the merger or acquisition (HR, Sales, Marketing, Communications, Product Development, Support, Customer Service, etc.) has a clear role in the program. This will ensure that decisions are made as a system rather than independently and that the businesses share responsibility for results. It will also ensure a direct and consistent information flow between customers and business.
4) Make the enhancement of customers experience a required and measurable goal: Most people involved in M&As agree in principle that customers’ experience is important. They may even agree that the way acquisitions have been done to date could be significantly improved. The reality of M&As is that they are highly restricted due to legal and business survival reasons; information is kept confidential until the very last minute and planning is often done in the dark. Change is the last thing on people’s minds. Instead, it is more common for people to revert back to old patterns and behaviors that end up with sub-optimal results such as customer defection, customer complaints, slow revenue growth, and overall drain on resources and budget. Enforcing results-oriented, measurable performance will force the channels and individuals within the channels to take accountability for the customers’ experience. This can be a painful process but it is one of the most effective ways to encourage change in a high-stress, high-risk environment such as M&A.
5) Talk with your customers: Two-way communication is key during M&As. Customers want to hear about your plans going forward--the product development horizon, the impact to their business, who stays on and who goes. They also want to share with you their needs and concerns and have as much influence as possible about those things that matter most to them.
Depending on the size and complexity of the M&A, you might want to consider a tiered communication approach to allow you to apply different “touch” to different customer segments. Start with your top customers—the ones that are most likely to be impacted by the merger and the ones that can impact you most. Involve them in the process. Communicate to them what you know. Ask them what they need to know. Then ask the channels to provide that information and communicate it to customers on time.
6) Know your competition: Your top customers who have the most to lose will be hounded by the competition. There’s nothing like telling a customer “I know company X has been/will be calling you…here’s what they’re going to try and convince you about. Here’s what you get by staying with us that company X can’t offer you.” It is an opportunity to show customers you know their business, what’s important to them, and that you have their best interest in mind.
Demonstrating to customers that you’re aware of the competition’s offering can also result in customers letting you know when the competition approaches them. I once interviewed a group of high-stakes customers when one of them all of a sudden held up a leather-bound folder and said “last time I met with ES (fictitious name), they told me that they can provide me with the same solution you do. They gave me this folder as they shook my hand.” But he wasn’t talking about the leather folder; with his salary, he can buy the factory that makes them. He was talking about the connection he felt from ES’s representatives and the care they conveyed for his business and for him as an individual.
7) Ask about things customers don’t get asked: Forget about product roadmaps and support models. Customers will ask you about these anyway and you’ll need to have the right people ready with answers. What you truly want to know from customers is what will help you shift their experience one way or another--waht will set you apart and lead to higher retention rate, customer loyalty, and overall reputation as customer-focused company what will help you demonstrate that you understand what your customers’ experience has been so far and how you will be making it better. Get factual, measurable, behavioral cues for what will be considered a good experience. Is it a certain timeline to development? Is it hearing from the acquiring company’s CEO? Most frequently, customers want to know is what information they’ll have when, and how they get to influence the process. Listen carefully, ask the right questions, and get to the core of their needs and expectations. Only they can tell you what experiences they need to have.
8) Deliver what you promised and remind your customers at each milestone that you have delivered to their needs: Acquisitions are like a broken fire hose to customers. It is an unexpected, disruptive event that can flood a whole street and waste multiple gallons of water. Once the emergency call is made, they will be busy fixing the mess your acquisition has caused. Being in crisis mode, they will be asking for critical things (screw driver? Wrench?) but once you give it to them, they are not likely to remember it—all they’ll remember was that they were able to close this or that hose. Help them remember that you delivered to their needs, that you listened and heard, that you care about their business. It’ll make for a whole different conversation once things settle down and the time comes for upgrades, renewals, and price increases.
9) Grow and evolve your M&A customer experience practice: So you’re 6 months after the close of the acquisitions and things are finally starting to slow down to something that a human can actually handle. All you want to do is catch up on much needed sleep and forget about the acquisition. But before you let out that big sigh and enjoy your year-end bonus for a successful acquisition, make sure you record all the learnings from the process. This will make the next M&A much smoother and will help you to build on the practice you established for following acquisitions and inside your company as a whole.
Acquisitions are challenging—most fail—but they are necessary for companies’ growth. While companies get better at integrating technologies and solutions and improve their planning processes for M&As, the most impactful differentiator is how the customers of both the acquiring and acquired companies feel during and after the period of the acquisition. Within a 6 month period, companies can lose customers’ trust and never be able to regain it…or, by making their acquisitions a thoughtful and customer-focused experience for their customers, companies can enjoy long lasting and measurable customer loyalty and trust, and reap the benefits of the M&A much sooner than had been possible before.