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Companies spend all sorts of pre-M&A time on alignment. But what about after the merger or acquisition deal is sealed? There is still work to be done, especially in sales.
When Companies make acquisitions, they have a lot to do, from identifying redundancies in staffing, processes, and procedures to selecting which survive and which can be reduced or eliminated.
Even in the face of so many critical issues demanding management’s attention, one study showed that 30 percent of M&A executives surveyed ranked sales the most important piece of the integration puzzle to get right. In addition, the study noted that “integrating sales forces ranks among the hardest parts of a merger to execute.”*
Yet integrating Sales Teams is often overlooked, especially how efficiently a common sales process can speed up the integration process and the realization of the investment thesis. Over the years we have observed companies that have optimized sales after an acquisition as well as those that have struggled—or even failed. Here are three scenarios—two thumbs up and one thumbs down.
Thumbs Up: In this first scenario a company makes a strategic acquisition in its own field, in part because the companies offer different solutions the market needs. Marketing and selling the combined product offerings would now, in theory, be much more efficient. But what’s the key to making that work? We’ve found that creating a highly productive, common sales process customized for each company’s objectives and challenges is fundamental. Here are just a few reasons that make getting the sales processes right is critical:
- Developing the sales process involves salespeople in the M&A process itself, increasing buy-in and likelihood of success
- Communication across lines improves product knowledge and insights for both teams
- Common customers are easily identified and assessed. Joint visits reduce uncertainty among customers and make inroads by competitors more difficult
- Customers that are candidates for products or services from both companies become apparent
- Serving those customers efficiently can become part of a joint sales process that will only become more productive over time.
Using our FOCIS® Selling program, sales teams not only learn or improve consultative communication skills. They also develop multiple sales processes that can be customized for each product or service offering, each prospect, and each company. The processes we help our clients develop are not canned pitches. They are instead customized persuasion processes that help prospects understand the full value—including both soft and hard benefits—a seller’s solution brings to the table. When the processes are developed, documented, and in place, they also make it much easier for the sales teams to identify the right prospects, or current customers, to begin selling new products.
Thumbs Up: One of our clients made five acquisitions in five years. Each time we taught FOCIS® Selling to the new sales teams and helped create a process for selling what the acquired company brought to the market. This replicated the professionalism of each sales team throughout the country, sped up each integration, and helped achieve the investment thesis sooner in each case. The original company eventually grew to $20 billion in sales from $1 billion and was acquired by a Fortune 500 company. The company’s CEO credits our process as a contributing factor.
Thumbs Down: In this less efficient scenario, after acquisition each company continues to sell only its products and not those of their now-sister company. Even though some territories overlap, unnecessarily increasing some expenses, that’s not the major problem. The major problem—which too often festers just beneath the surface—is that two representatives from the combined companies may be calling on the same buyers. That can cause confusion and uncertainty, eventually opening the door for competitors who seem more organized, stable, and reliable.
An even more unfortunate situation is when a sales rep is calling on a prospect (or customer) who can benefit from a product sold by the new sibling company. But the rep doesn’t know how to identify the need and communicate the value, let alone make the sale. Why? Because the companies don’t share sales processes and profit from the advantages. For example, reps might not even know the other company’s products exist, let alone the problems they solve. The risk of losing any sale is greater or the buyer receives a less-than-optimal solution, eroding confidence and loyalty over time.
Having a strong sales process and sales skills is helpful not only for companies involved in a merger or acquisition. It’s an asset helpful to any company. Other challenging situations in which a strong sales process is valuable include when:
- Introducing a new product
- Transferring the main sales responsibility from the founder or leader to someone else
- A small percentage of the sales team is bringing in 70 to 80 percent of new business
- The sales team is not capable of aligning their sales process to a specific prospect’s buying process.
Can we help you? Please get in touch at 847-446-0008 Ext. 3 or at pkrone@productivestrategies.com . We’ll talk with you about your objectives and challenges. Together, we’ll decide on the best next steps for your company.
*Mastering Sales Force Integration in a Merger, Marketing & Sales Insights, McKinsey & Company, October 2009. The next most important were areas behind sales in order were HR, IT, and operations. |
