Don’t Shoot the Salesmen

One of the more disquieting shortfalls of strategic m&a surfaces in a recent report by Right Management Associates, summarized in our MarketWatch feature. A good number of buyers, according to a survey of corporate executives, don’t make the revenue or profit growth numbers they touted to justify their deals. Nearly a fifth confessed to missing their targets, although my suspicion is that the proportion is even higher than they will admit. Right m&a maven Steve Wall cites a host of reasons for the misfires – preoccupation with cost cutting, mangling communications to the sales force, poor training to get the sales people in step with the combined firm, to name some. It adds up to a double-whammy. The buying firm not only blows the chance to create real value but leaves itself open to customer loss at a time when it’s highly vulnerable. Over the years, Mergers & Acquisitions has devoted a lot of space to postmerger sales and marketing, citing scores of cases in which the combined company suffered everything from sales force erosion to misguided assumptions on cross-selling to competitor raiding of the firm’s customers. The traditional belief is that rivals move stealthily, staging a guerilla attack to pick off a few customers while the combining firm is too busy to deal with it. Well think again. Following one recent deal, the competitor of the target went public, guaranteeing customers it would provide better service to any willing to jump ship. Don’t bet this is a one-shot exercise in chutzpah. Business is tough and all stops are being pulled out to generate revenue. You need the sales force not only to sell your products and services but to sell the deal as beneficial for the customers. Martin Sikora Editor Copyright 2004 Thomson Media Inc. All Rights Reserved. http://www.thomsonmedia.com http://www.majournal.com