Outsource the Experts on Mergers & Aquisitions

Leveraging Sales & Marketing To Maximize The Value Of Mergers &
Acquisitions
By Kevin Bandy

Revenue growth continues to be a key goal of C-Suite executives
with many turning to mergers and acquisitions to support their
strategic agendas. While the acquirer’s top-line traditionally
benefits from revenue growth in the first year after
acquisition, few companies have been able to achieve sustained
increases in revenue growth in the subsequent years.

One example of companies’ inability to get back to pre-merger
revenue growth rates is the acquisition made by an established
leader in the outsourcing arena of a fast-growing start up. On
paper, this deal should have changed the industry dynamics and
created a “one-stop-shop” for outsourcing deals, generating
additional revenue for the combined company.

In reality, two years after the deal announcement, the acquirer
was struggling to stay competitive after posting a significant
year-end loss and with its stock price falling. The acquirer
admitted to having underestimated the complexity of taking on a
large number of new contracts in a short period of time and
miscalculating the cost of executing them.

This,combined with the loss of confidence in the new
organization, led to negative sales growth for the first time in
the company’s history and a decrease in sales growth from around
16 percent
growth two years before the deal to around -1 percent sales
growth two years after the deal.

There are numerous reasons for these growth challenges. Chief
among them is a tendency among acquirers to become inwardly
focused on integrating their new acquisitions, and they lose
sight of the need to retain and grow their customer bases. All
customers will be impacted by a merger. The key is to understand
how. A clear strategy that focuses on reducing customer
disruption, communicating changes timely and accurately, and
developing robust retention programs for profitable customers,
is essential to successfully managing customer expectations. The
benefits are well worth it. Companies can experience:

• Satisfactory retention rates for customers and employees.
• Market stability
• Informed customers who act predictably during the
integration.
• High level of excitement on the part of the customer that can
lead to even greater loyalty.

Successful companies use mergers as an opportunity to discover
untapped revenue potential by optimizing cross-selling and
rationalizing channels, products, pricing and overall marketing
efforts. This can be done if companies understand their new pool
of customers – their segmentation, preferences and behaviors.

Not only are customers at risk during integration, maintaining
high-performing employees could also be at risk if staff
retention is not managed properly. To help reduce these risks,
company executives must also win the hearts and minds of
client-facing employees, leveraging them to keep customers at
ease. In addition to a motivated salesforce, the right tools and
messages to communicate with customers can be crucial in
maintaining and growing the customer base throughout the
integration plans. Engaging leaders from both organizations,
developing fair and effective financial incentive plans, and
creating and clearly communicating the integration plan are also
key to successful integrations.

Companies that put the customer first, successfully equip
employees with the right tools and messages and mine their
customer databases to drive profitability can succeed at
generating post-close revenue growth. Accenture has been
involved in up to 400 M&A deals over the past five years and is
a leader in providing sales and marketing support. Given our
experience, we understand what it takes to help increase the
growth opportunities of mergers and acquisitions.

About the Author: Accenture's Electronics & High-tech industry
group offers services to all segments of this exceptionally
dynamic industry. Read the full article on "Leveraging Sales &
Marketing to Maximize the Value of Mergers & Acquisitions" at
http://www.accenture.com/manda

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