Customer defections are a key reason for why more than half of all mergers fail to deliver the intended improvement in shareholder value. While merged companies focus on the quick capture of synergies, they typically lose sight of customers – just when the risk of losing those customers is at its highest.
There are reasons for why this happens, and chief among them is a leadership vision focused in the wrong place. Acquisition plans are usually driven from the inside out, and the emphasis is on cost synergies, process alignment and employee communications. While discussion about the commercial aspects of the deal are appropriate, we find the customer is often an afterthought rather than the touchstone by which all processes are meant to deliver optimal results. Companies tend to be more sensitive to internal sales staff issues and concerned that changes will alienate the sales force, and decide to “work on that later” when it comes to customers. In our experience, it is critical to address the latter earlier rather than later.