When acquisitions go wrong, it’s because of a failure to look after the people involved, and there are none more important than customers, writes Carlene Jackson of Cloud9 Insight.
Leapfrogging your way to growth through acquisitions is an attractive idea, but one where many businesses come unstuck. The numbers might look great, the business case sound but, then, for some reason, it all goes wrong. Understandably, business owners want to generate returns after making a large investment, but they must never forget there’s a human element to this. Client accounts and contracts are great assets but only if customers remain satisfied. Here are my five top tips for ensuring your next acquisition pays in the long term.
Put Staff First
New employees should be your first priority, especially if they are customer facing staff. These are the people who have looked after your new customers to date and, if they’re not happy, it will soon show up in the sales figures. If you really care about customers, you need to care about your employees more – even the ones you’ve only just met. If key people leave then there is considerable risk that clients may take their business elsewhere. Give honest communication about likely headcount changes to dispel rumours and give job security to those you wish to keep. If good people are looking around for new roles, and recruitment agencies will get wind of it, then they’ll start head hunting and creating trouble within your team.
Communication Strategy
Successful acquisitions rely on communication. People will want to know very early on what the deal means for them. Before the deal has been done, you should prepare clear content that will be published on your website and social media and distributed internally and externally. This information will be consumed by clients, partners and employees alike. Everyone will want to know ‘what’s in it for them’ so, while revealing your vision, ensure people understand how it affects them. Staff will want to know if their jobs are safe. Customers must be told if anything is changing or if they have to do anything. Suppliers should be assured their contracts are being honoured and payments will be made. Clear and consistent messaging is essential.
Build A New Team
If possible, appoint a team of representatives to consult with about planned changes. Ensure there’s lots of communication with employees, make sure questions are answered and also that social events and meetups are arranged to help foster new bonds – even if they have to be online. Where possible, allow business as usual for everyone else so that productivity does not fall. Try to ensure that employee reviews are up to date, as staff will not want to feel their own career progression is on hold. Also, listen to staff and undertake employee surveys to identify which managers have high levels of loyalty. Employees often feel a great sense of loyalty and attachment to their managers and so it’s very important to identify these people and generally keep them onside.
Dive Into The Data
One of the big goals of an acquisition is to create a single source of customer information. For many businesses, the danger is that so much customer information is inside the heads of employees. This danger rises enormously in the case of an acquisition. When some employees inevitably leave, they may end up leaving with your client list. So start creating a master customer relationship management (CRM) system. The end result should be a single platform where you’ve integrated your newly acquired data with your existing systems. It is key to not only know who your clients are, but also to find out what is known about them. Transaction histories are very important, but also try to find out specifics about each customer. Aim to really understand why people are buying and what will make them buy again.
Upsell
Once you’ve got a single source of contacts then you’re ready to start upselling and reaching out to your new customers with better offers – this is how you can obtain real value from your acquisition. It’s important customers still feel they are obtaining something that is greater than, or of equal value to, what they bought initially. Purchases come from trust, which is created through strong company brands and relationships between individuals. Solid marketing that ensures your brand is perceived well is key and this should be achievable if you’ve got real insight into your customers.
Create Your Vision
As you begin to integrate the two businesses, you’ll need to start spelling out your vision of the future to all concerned. Successful M&A find efficiencies and economies of scale, but these only occur once the human side of things – staff and customers – are taken care of. I’ve seen acquisitions go well and also very badly. Integration takes time, but you need to get moving right from day one.