It can allow access to a large pool of talent, a wider product or service set, new technology and, most importantly, new customers.
Without customers, there is no business, so it makes sense to prioritise CX (customer experience) throughout any merger or acquisition process and to make it the focus of your business operations. However, not all businesses are prioritising CX or even think it is important to their organisation. According to Smart Insights:
87% of businesses say that an exceptional customer experience is important to their organisation, with 11% saying that CX is somewhat important and 2% saying it wasn’t important at all.
That means that 13% of businesses are not prioritising CX as part of their strategy.
Why is this an issue?
We live in a fast-paced digital world, where easy service and instant-gratification take precedence over brand loyalty. Before the rise of the internet, brands could rely on retaining customers, as it was more difficult to compare services and experiences, so customers where less tempted to leave. Nowadays, the market is competitive, with different brands offering the same products and services. Customers are inundated with targeted marketing from potential competitors as soon as they open their phone to check their Facebook notifications. Consumers are less likely to be loyal to a brand in favour of simple and effective service, competitive pricing and an excellent experience from a company. A bad experience with your business coupled with effective marketing from a competitor can mean loss of business, so it is more important than ever to put CX at the heart of your business strategy.
Elite understands the importance of CX, as it plays a vital role in everything we do, including our acquisition process. Why is CX so important and how can you ensure an outstanding customer experience before, during and after a merger or acquisition? We will explain why CX is an integral part of our M&A strategy and why it should be an integral part of yours.
Acquisitions can bring fantastic benefits for your customers including:
Acquiring businesses or selling your business can keep you steps ahead of competitors, but M&A failures are common and a big cause of these failures is inconsistent or negative CX.
There are a variety of factors caused by M&A that could pose a potential risk to your customer’s experience. Customers notice changes and inconsistencies instantly, which can reduce trust in your brand. A negative change in the quality of service, inconsistent information or message given to customers, even employees not integrating or leaving the company can have a detrimental effect on your customers’ experience. If CX is not at the heart of your business processes, including M&A, this could result in dissatisfied customers, losing customers to competitors and, potentially, a failed acquisition.
Customers walking through the door is not a result, we need to retain them in order to ensure a steady revenue. A business with a high customer turn-over (or churn rate) is not ideal, as it means customers are not receiving an experience that is encouraging them to stay with the business. Furthermore, if your customers are consistently having a negative or unhelpful experience with your business, this can be damaging to your reputation. 33% of customers share their bad experiences with a brand to others, whether it be through word of mouth or through leaving reviews on public forums, such as Trustpilot, or on social media.
At Elite, we understand that a lot of work, thought and stress goes into an M&A process, which can mean, factors such as CX are forgotten, but your customers will notice. Even if you have been customer-focused and have provided an excellent CX, if it slips during the M&A process, the knock-on effects and loss of business can be harmful. The experience of the customer needs to be on your mind from before the M&A process begins, right through to post-acquisition.
At the beginning of your M&A journey the first question you need to consider is how the acquisition will affect the experience of your customer – both positively and negatively. If you’re looking to grow and develop your business through M&A, the impact and benefits of this investment needs to reflect positively on CX.
‘The value of the acquisition is in the customers, so your capability to provide an exceptional level of service is paramount to retaining and growing that investment.’
Before advertising your business to buyers or looking for a potential business to merge with or acquire, look at your own CX. Businesses looking to develop through M&A will not want to damage their own customer retention rate due to a business with a churning customer-base. A couple of questions you could explore to analyse and/or improve your CX include:
At Elite, when we are looking for potential acquisitions one of the biggest factors we take into consideration is the customer-base. As our Director of Customer Experience explained, the value of an acquisition is in the customer-base. If it is churning or we can see that customers are regularly having a negative experience, there isn’t going to be much value or return on our investment in that company, and it could hinder the expectation for CX that our customers currently have.
During M&A, the businesses involved need to be a good match, not just strategically or in the products/services they provide, but culturally. The ethos and values of your business and the other business(s) included in the M&A need to be considered carefully.
Example: Business A uses a consulting approach with their customers. The ethos of their sales process is to fulfil their customers’ needs through analysing all of the available options and suggesting the most suitable one for them. It’s important to Business A that the customer feels listened to and receives a service that is tailor-made to their business. Business B (who are looking to enter an M&A process with Business A) are more focussed on closing sales quickly. They simply provide the product that the customer thinks they need, rather than helping them find something that truly meets their needs.
Business A has built a strong customer-base with clients who consistently engage in repeat business with them or are on long-term contracts. They regularly ask for feedback via their sales team or through surveys. Business B has a lot of customers initially walking through the door, but they have a high churn rate. As they have a regular wave of new custom and are making money, Business B haven’t seen the need to ask for feedback, despite having a poor retention rate.
Business A prioritises looking after employee wellbeing, introducing incentives for sales teams to find new business and creating an environment that is enjoyable to work in. The minimum amount of time an employee has stayed with the business is around 2 years. Many employees have stayed working for the company for many years and some have been there since the business opened. Business B have a low employee retention rate and are frequently having to replace members of staff, which has led to an inconsistency in service.
This is a very extreme example of two businesses that are not correctly suited for an M&A process, but you can see the issue. Businesses who have conflicting approaches to sales, customer experience and employees are going to have a hard time working together. They both may feel that their approach is the best which will lead to issues during and after the process and it won’t set the acquisition up for success.
Everybody has their own ideas about the best approach to run a business and you’re not necessarily going to agree on everything – that’s why negotiation is a big part of any M&A process, but there should be a lot of common ground in terms of how your businesses operate and view your customers and employees.
As we mentioned before, CX needs to be a key focus point from the beginning of an M&A process right through to signing on the dotted line and beyond. As the acquisition process goes on behind the scenes, your customers need to feel like it is business as usual. An important factor that can help to ensure good CX during an M&A process is ensuring you keep sight of your brand values and ethos all the way through. Businesses should look to integrate and leverage values that are easily aligned and critical to customer retention and satisfaction, wherever possible.
Employees have a direct impact on CX as they are the people who are delivering your service and dealing with your customers’ needs and concerns. Two things should be considered regarding employees during an acquisition – their wellbeing and their training. Any change in company ownership can cause anxiety amongst employees for a variety of reasons including:
The time in which you tell your business about a potential transaction is personal to you and your business’ situation. If you are selling, you may want to keep it close to your chest until the deal is done in order to avoid employees jumping to negative conclusions and leaving or worrying about their position, which could have a negative impact on CX. Similarly, if you are buying a business you may only want to let your employees know at a certain point in the process just in case it falls through. Supported employees provide a better service than employees who do not feel valued or appreciated. Looking after your employees’ wellbeing can encourage them to stay with the company for longer, avoiding constant recruitment to replace roles and keeping talent within your business. During an M&A, integration needs to be solid, with every acquired employee feeling as part of the team along with current employees.
At Elite, we value every team member and our appreciation and care extends to every member of staff we acquire during an M&A process. Our ability to provide an excellent customer service is a result of ensuring that our company is a great place to work. We place significant importance on employee wellbeing and reward achievements, as well as provide as many opportunities as we can for growth and development. Whether an employee was originally recruited by Elite or gained through an acquisition, we ensure that they are integrated effectively, are aware of our values, our team ethos and how Elite will support them.
Training is paramount during the integration process of an M&A. It is important that the businesses we acquire adhere to our values and we are all on the same page regarding company policy. Comprehensive inductions are a great way to introduce new team members from an acquisition and introduce them to the ethos and values of the company, as well as its aims, how they will be supported and benefits available to them. With every employee feeling valued and clearly focused on the company and its goals, this can continue the good CX you have already provided and improve it with the added talent you have acquired.
Consistency is key to maintaining good CX throughout an M&A and improvement of CX is important post-acquisition. When you announce your new M&A, customers need to know the benefit to them, especially if the customer-base has been acquired from another business. Furthermore, they need to see the benefit of this acquisition. Whether its access to more expert advice, a wider variety in your product set or better customer service, the value of your M&A needs to be tangible.
‘Customers need to feel a benefit from being acquired, but this is a fine balance to be aware of as processes, people and systems naturally evolve. Getting this correct is crucial to maintaining and improving the experience, post-acquisition.’ Ian Roby | Director or Customer Experience | Elite Group
As we mentioned in the opening of this article, one of the main objectives of M&A is to grow and develop a business. Retaining current customers from both the acquiring and the acquired business is important for growth, as well as attracting new customers.
One of our success stories is the acquisition of Nexus Telecommunications. When Elite was first interested in acquiring the business, the key features that attracted our attention included a similar culture and ethos to our own brand, as well as having a respected reputation within the industry.
‘The key to our acquisitions programme is finding the right people to work with and the appropriate skills and technologies to ensure we are at the forefront of industry innovations.’ Matt Newing | Founder | Elite Group
The reputation and skills of Nexus Telecommunications combined with our unified communications and IT products and services, allowed Elite Group to deliver the strongest customer experience in the industry. Both Elite and Nexus worked together as a team rather than individuals, which helped to overcome any challenges posed by the M&A process. Our dedicated acquisitions team ensured our structured process ran smoothly allowing all involved to focus on the negotiations and to arrive at a suitable agreement. The integration process post-acquisition is always a challenge. Elite ensure that we communicate the best way to approach telling employees about a deal once it is completed. This ensured that integration between Elite and Nexus started positively from the first day. Good communication with employees allowed them to then reassure customers and suppliers, post-acquisition allowing the continuation of a great customer experience. The result of this successful M&A process allowed a smooth transition with as little disruption to the Nexus team as possible, as well as continued high-levels of service and a broader product offer.
Looking to sell your business in 2021? We could provide the solution. We have an expert acquisition team and we take the time to fully get to know you, your business and its needs. You are in control and our inclusive approach ensures that you are regularly updated throughout the process. If there is anything you don’t like or you decide that Elite are not the right buyer, you can walk away from the process at any time. Get in touch today to find out more about our acquisitions process.
Elite Group is one of the UK’s leading unified communication providers, supplying reliable and professional IT and unified communication services to organisations seeking Business Mobile, Cloud, Networking, Connectivity, and Telephony solutions.
For more information on how Elite Group can power your unified communication solutions, call us or request a quote today.