Will you be fired because of the new acquisition?


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In the past week, three of my clients have told me about an acquisition that their organization was making. Apparently, this is a good market to add scope and resources, since the some of the industry leaders are turning around and looking to improve their short and long-term profits by buying some of the competition.

Would you believe that customer data never came up during the acquisition discussions for any of these clients at all? Yet a seamless customer experience has a critical assumption to the valuation of the acquired company?

What were they thinking? Did they think that customer delight and retention simply occurs by magic?

After all, the value of a company is really the projected future value of cash flows that come from customers, right?

If that is true, how in the world can a company not be concerned about how they will market to newly acquired customers?

Yet, this situation frequently occurs. Companies evaluate a lot of factors during due diligence, but synergies in marketing are rarely considered. And we marketers are left to pick up the mess. But no pity party here – remember, we practice No Excuses Marketing around our place. Pick up the pieces and get going – we have customer relationships to save and a revenue target to make and no time to waste!

What are the first three things you need to do after your company completes an acquisition? Here you go:
1. Figure out the rules of the road. Many times during an acquisition, promises are made to the existing marketing department about keeping the old brand for some time, retaining the existing marketing department, etc. It is critical that you find out what those deals are; often they are verbal ones during the agreement, so you have to talk to the people involved in the deal to make sure.

The early days of a new relationship are critical, and you must be sure to get off on the right foot. No matter what, you want customers to experience a smooth transition. In these days of social media, you have to make sure employees are comfortable, if not happy, to prevent a backlash that you do not want to deal with.

2. Inventory your assets. Before you get going, make sure you know what you have. This inventory includes people, creative assets, relationships, and most importantly, customer data. Keep a running tab of what you have, what you are missing and what you don’t know about yet. Pay particular attention to assets that impact the customer experience of your newly acquired customers. You can always mock up a new logo, but losing information about when your best customers last purchased – that is an issue. Be patient – at the start, you will know far less than you don’t – but keep plugging away.

For the customer database – look to see if you can find “RFM” – when your newly acquired customers last purchased, what they purchased, how much they spent and how long it has been since they returned. That information is enough to get started.

3. Focus on relationship building. The temptation (and pressure from management) will be to start making money off the newly acquired customers, but let me urge you to focus on relationships at the start more than short-term profit. Relationships are like investments – make deposits early on, and you can reap rewards for years to come. Remember, these customers know about the acquisition, and they don’t know you. First impressions are hard to overcome, so make yours about the brand, values, people and service. Then provide reasons for customers to come back and get to know about you. Tell them about the benefits of the acquisition and then make sure to highlight those benefits in future communications.

Acquisitions are delicate times with high pressure. Pressure to make money from acquisition can lead to decisions that you will regret in years to come. Many acquisitions fail to yield anticipated returns due to culture issues between employees and, as importantly, due to a gap in customer experience during the transition that leads to a decline in customer retention. Don’t let this happen to you. Work early with management to share the risks and show the plan you have to grow profits through relationships.

Then you will find yourself “ruling the acquisition” and not the other way around!

Republished with author's permission from original post.

Mark Price
Mark Price is the managing partner and founder of LiftPoint Consulting (www.liftpointconsulting.com), a consulting firm that specializes in customer analysis and relationship marketing. He is responsible for leading client engagements, e-commerce and database marketing, and talent acquisition. Mark is also a RetailWire Brain Trust Panelist, a blogger at www.liftpointconsulting.com/blog and a monthly contributor to the blog of the Minnesota Chapter of the American Marketing Association.


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