However, the promise of the merger can often fall short of the reality.
When post-merger activity commences, the primary focus inevitably shifts to integration of operations, assets, and staff to achieve cost savings. This should come as no surprise. After all, redundancies are almost always present, easy to find, and even easier to quantify. Cutting redundancies is a promising start for many newly merged companies!
The problem is that while many organizations deliver on cost reductions, they fizzle out when it comes to delivering customer benefits. Chaotic price lists, haphazard solutions, and obscured value propositions are hallmarks of market fizzle. We also see Sales teams operate in silos, and a sibling rivalry of sorts can develop. Each team won’t sell the “other” solutions or, even worse, they give them away at a deep discount.
The financial result is an equation that looks more like 1+1=1. Sadly, this result is even less than the sum of the merged entity.
The secret to preventing market fizzle is to focus on what the merger means for the customer. Here are four fundamental questions to consider:
- How do we deliver value to our customers as a combined entity?
- Which of our customers are most apt to benefit from this value?
- Can this value be quantified and communicated to new customers?
- Will this value translate to profitable revenue?
We suggest a straightforward approach to understand and create value and build better relationships with customers in a post-merger environment:
- Develop a common language and approach across siloed sales organizations. Each organization often has its own language and its own way of expressing value about its products. To avoid siloed sales organization when the two organizations come together, they need a common language for describing an offering and protecting its value. While newly merged organizations can’t be expected to have an integrated, scalable, and winning solution immediately, Sales teams need to be skilled on how to protect, not give away, value. Read Negotiating with Backbone to learn more about protecting your value.
- Define solutions that reflect the combined value. New solutions need to be based on customers’ needs, reflect what your merged entity truly offers that is different from the competition, and have a value promise that is clear and compelling for customers. To learn more, read “Getting to Value in B2B.”
- Provide a framework for Sales teams to sell the new offers. Once you have common language and offers defined, the Sales team will need the framework to engage with customers on value and explain and defend price. To learn more, read “Sales Transformation.”
The work that goes into our straightforward customer value and solutions approach is not easy. If it were, we’d see more successful mergers. However, it is achievable and can help deliver on the promise of the merger. If you lead a newly merged company, ask yourself, “How well have we understood and met our customer needs and positioned our solutions for the newly-combined Sales team to win?”
