Companies plan mergers and acquisitions because they see opportunity in the deal — but so do their competitors. As soon as your M&A deal is announced, your rivals could be calling your target’s clients inviting them to jump ship. They may claim that your combined organization will be too big or too bureaucratic to effectively serve them. Competitors will also attempt to recruit salespeople — raising fears that you’ll fire staff, increase sales quotas and promote people from the other organization over them.
Thwart these efforts and keep those customers by winning the hearts and minds of your new sales staff as soon as possible.
Plan ahead, communicate early
Don’t wait until the deal is announced to think about sales department employees; that’s likely to be too late. Developing a communications plan for salespeople in each organization should be an early part of the merger process. Among other things, the plan must explain the deal’s rationale, its anticipated benefits for employees and the changes staff can expect.
Even before the deal is made public, work with sales staff to prepare a script that explains the expected changes and how customers will benefit. Include FAQs, and provide the name of a person in the organization who can answer questions that sales staff can’t.
Provide real answers
It’s not enough to communicate upcoming events via email. CEOs of both organizations need to meet with their salespeople in the first week following the deal announcement. A face-to-face meeting is particularly important for the acquired sales force. As you talk to employees, focus on reducing fears about layoffs and creating enthusiasm for new opportunities the merger will provide. You also want to ensure that everyone in sales will send a consistent message to existing and potential customers.
Make your presentation short, and spend the rest of the time listening to employee concerns and answering questions. Above all, salespeople will want to know how the deal will affect them. For example:
- Will the sales forces of the two companies be combined?
- Will they now be tasked with selling the other company’s products or services?
- Will compensation and benefits change?
- How will the new sales department be structured and who will manage it?
If you don’t know the answer to a question offhand, promise to find out and respond as soon as you can — then keep your word. If you plan to cross-sell or combine products or services, arrange to provide training. Salespeople must understand your offerings in order to present them effectively to customers. In addition, training is a concrete way to demonstrate that the new, combined company will continue to provide them with sales support.
Even the most loyal employee will consider a competitor’s offer if the price is right. So if you hope to retain top sales producers (and their customers) and encourage staff to cooperate with new colleagues, you must consider financial incentives.
Offering retention bonuses and rewards for maintaining and increasing sales — in addition to existing compensation plans — can help. Make such incentives easy to understand and clearly achievable. Although interim bonus programs may be expensive in the near term, they can prevent sales from dropping off during the merger and integration process. And they’ll help you generate far more long-term revenue to offset immediate costs.
Encourage employee ideas
Because they’re out with customers, salespeople are likely to have ideas for capitalizing on your expanded offering. Create a temporary sales leadership team to evaluate possible downside risk and increased sales potential of the M&A deal. The team should include two to four top sellers who are taken off their regular responsibilities and tasked with retaining customers and maintaining sales momentum during integration.
The transition sales leadership team should serve as a clearinghouse for customer concerns and competitor strategies. They should also be available to clear up other employees’ confusion over the future of product offerings. They might also develop new product and service combinations based on customer feedback and demand, and look for ways to retain at-risk accounts. Finally, it’s important that the team frequently update messages and strategies as the deal progresses and competitors’ tactics change.
Discourage excessive departures
When companies merge, some employees will inevitably leave. But if the success of your deal rests on customer retention — and most do — make sure you have a plan to win over and keep top-performing salespeople.
If you have questions or need guidance on issues relating to your M&A deal, contact Weaver. We’d be happy to help.
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