19th Feb 2016
Mergers and acquisitions can help a company to grow and gain market share. But they aren’t always good news, particularly if the negotiating parties spend more time on financial and legal deliberations than on the potential implications for consumers. So how can organisations ensure that these deals are financially successful, without losing sight of the customer?
Firstly, planning is key. According to a study by KPMG, 83% of mergers and acquisitions fail. Mark Robinson, vice president of data-based marketing company Qbase, believes failure is often due to poor integration. “Several years ago, we were working with a major internet service provider (ISP) that had acquired a number of smaller ISPs, but the integration of their systems was really poor,” Robinson recalls. “Customers were billed incorrectly and customer service staff didn’t have a single view of each individual’s activity,” he explains.
Rod Bulmer, chief executive of consumer services for the Co-operative Banking Group, agrees about the importance of planning. His company merged with Britannia back in 2009 and integration was a clear priority. “We had a three-year integration plan, which involved a clear vision,” he says. “We spent 18 months harmonising the pricing and features of our products, and the service levels were integrated in a way that made them consistent across all of our phone, web and branch customer channels.”
As well as ensuring customer service strategies are consistent across the board, Bulmer also highlights the importance of transparency. “Regular communication at each phase of the transition plan kept customers informed of what was happening and why,” he adds. “Customers were also able to present their views at regional and area committees.”
Internal communication is just as important. A well-planned merger or acquisition may require the appointment of a director of integration and change, to oversee the transition of the organisations. Having senior management on board to explain what’s happening and keep staff in the loop is essential, and should help to ensure that staff remain engaged and focused on delivering high-quality customer service.
“Staff that are worried about their jobs are far less likely to be at their optimum in service delivery,” notes Alison Bond, a director at research-led consultancy The Halo Works. “Diminished customer service produces a reduction in loyalty. Customers could decide to jump ship and fall more happily into the lap of a competitor.”
Finally, Liz Machtynger, managing director at customer management consultancy Customer Essential, adds that organisations going through a merger or acquisition should always consider the customer’s perspective. She advises exploiting customer feedback “to show their needs and priorities”. It might be tempting to simply focus on the figures, but any deal will fail if the negotiators lose sight of the customer.