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Many CSMs want to ensure effective use of customer success during mergers and acquisitions as without it, organizations can have a negative impact on your acquired customers as well as the existing employees. In this write-up, we demystify this art of ensuring customer success during mergers and
Customer success is one aspect of corporate SaaS mergers and acquisitions that is sometimes overlooked. Organizations are guilty of putting it on the back burner even though it is one of the most crucial factors in success. During mergers and acquisitions, even the slightest operational change can significantly influence both the staff and the clients. This can have a disastrous impact on the customer success department and ultimately on the success of an organization.
Maintaining the focus on customer success throughout the mergers and acquisitions process is difficult. But if you consistently do it, you can get significant rewards. Maintaining your employees and your customers is the first thing customer success does.
While it can be challenging to maintain elevated levels of customer success across the organization during mergers and acquisitions, you can get the required outcomes by having the proper combination of knowledgeable people and operational procedures.
But, before looking at how to do it, it is important to understand the reasons that make customer success imperative during mergers and acquisitions.
Let us look at some of the reasons that customer success crucial during mergers and acquisitions:
The phrase – Age of the Customer – was first used by Forrester, who defined it as a customer-obsessed enterprise that concentrates its strategy, energy, and budget on processes that enhance knowledge of and engagement with customers and prioritizes these over maintaining traditional competitive barriers.
For people, goods, processes, and technology to offer a compelling and cohesive customer success approach, the company’s operational model needs to be realigned in the Age of the Customer.
Although it may seem challenging, many businesses have gotten the message and now see customer success as a genuine business discipline that can also be profitable.
Therefore, we also need to adopt this customer-centric strategy when it comes to mergers and acquisitions, emphasizing what customers value most.
Losing employees while following a merger and acquisition is normal, whether because of cost-cutting, economies of scale, or the chance to forge a new direction elsewhere. From the perspective of customer success, this is quite risky because losing a customer success manager is awfully expensive regardless of your rep-to-client ratio.
It is crucial to start by getting to know your new customer success team. Before taking action to prevent departures, you must meet with each team member and quickly assess the likelihood that they would leave and the potential harm that would result if they do.
Do not modify anything if the churn is not alarmingly high and no urgent adjustments are required. It is simple to think you know everything during merger and acquisition, but change takes time and requires careful management.
In practice, this entails maintaining current portfolios and connections while making sure that every customer success person is aware of the new product and company strategy, how the product helps you accomplish business outcomes and the future impact on customers due to tech collaborations.
During an acquisition, having mutual customers who are rivals could be very risky. Nevertheless, they are often taken into account. Neglecting this possibility is real because it is the safest choice. Early detection, segmentation based on total ARR, and elimination are required.
Recognize the differences in ARR between the two and the rationale behind their use.
Try to reintroduce the SPOC if they are accustomed to having one. But only do it when a few internal reps have received training and have some exposure to both. Because modification will still affect the shared consumer, you can assign a small team of capable CSMs to manage only your shared clients. This will lessen the requirement for product training for everyone and help you become skilled at managing shared clients.
Various compensation models can present a related challenge. For instance, if one of your customer success teams receives a reward for customer retention while the other receives one for client engagement, your clients will experience an entirely different outcome.
Obviously, pay does not suddenly increase or decrease. However, it is imperative to close wide deficits like those in this situation.
The last thing you want is for one customer success team to think they are better than the other. You do not want them to be concerned that dealing with the opposing side would sever their bond.
Now that you have understood the relevance of customer success during mergers and acquisitions let us now focus on the concluding section, which will demystify the art of ensuring customer success during mergers and acquisitions.
Here are some of the best practices to ensure you optimally utilize customer success during mergers and acquisitions by retaining the existing customers and employees:
Differentiate the mergers and acquisitions process from mundane business operations
The logistics of attempting to combine two organizations might be easily overlooked. After all, that’s where all the action happens during a merger. However, the core business can swiftly deteriorate if the leadership team permits itself to become sidetracked.
Integration initiatives can occupy so much time, effort, and focus that managers and staff are diverted from their regular tasks. Problems with clients can frequently result from poorly managed system migrations or uncoordinated efforts.
Customers can become nervous when things change, so they will know how the new connection will affect them. They will probably be overly sensitive to any changes in the way things are done.
You will keep your consumers satisfied and guarantee the quality if you constantly and clearly communicate the advantages and management of the new, united firm. Additionally, it is critical to describe any changes that would have occurred regardless of the integration process, such as process upgrades, market-wide strategic adjustments, and structural realignments.
A special team that comprises experts from the company operations, law, technology, and finance must be formed, covering every integration area, especially customer success needs to be formed. Care should be taken to ensure that the procedure will not interfere with regular business operations if an exclusive team focused solely on M&A concerns is formed. The company’s employees can be called upon as needed, but they should be otherwise free to concentrate on giving great customer service.
Managers must be aware of how customer success models will be merged during a merger and closely monitor any potential changes that could affect customer success. Companies frequently wait too long to implement new organizational structures and leadership, resulting in skilled executives leaving for better opportunities and customers switching to a rival brand.
Early process establishment and standardization increase the likelihood that everything that made you successful in the past will be successful again in the new business. According to Deloitte, a customer’s decision to purchase a good or service is influenced by how much they have enjoyed their overall experience.
One strategy to maintain client satisfaction throughout a merger is to automate critical processes. In your automated email interactions with customers, explain what they need to know and how it affects their relationship with your brand.
Do not go crazy; they do not need to be aware of every integration detail. Furthermore, you can host clients by having regular interactions with CX bots. This makes key staff available for more vital customer success interactions. You will have much greater chances of making your priceless clients feel cherished if you accomplish this.
Every organization has a unique set of cultural norms, values, and preconceptions that guide how employees interact with one another and behave themselves. Choosing what to do with the combined company culture is one of the largest issues of most acquisitions or mergers. Usually, the buyer wants to keep the culture that supports its strategy. Sometimes the acquirer wants to incorporate the target company’s culture into its own. It is crucial to keep in mind the cultural components that are crucial to the company’s foundation during the merger and acquisitions process and discussions.
Discussing which cultural concepts will be fundamental to the new business throughout the negotiating process can make the integration process easier and boost the efficiency of post-deal delivery. Whatever the circumstance, commit to the culture you want to see develop as a result of the integration, talk about it, and implement it. The culture must then be actively managed by executives starting with the CEO.
Consistent communication is essential throughout the merger and acquisition process. As a result, you must keep your team updated on everything that occurs throughout SaaS mergers and acquisitions. As a CSM, your top-most responsibility is to ensure your employees and customers handle the change positively. This will ensure successful mergers and acquisitions for your organization. 37
Prioritizing customer success during the merger and acquisition process will set a standard for future performance. Additionally, it will guarantee that your current clients continue with you during periods of mergers and acquisitions. I hope the information refurbished in this blog helps you deal effectively with customer success during mergers and acquisitions.
Published 30 Jun 2022, Updated 30 Jun 2022
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