Sales Savvy

Yesterday, while finishing up my Starbucks Venti-Quad, non-fat vanilla latte, I ventured into a conversation about mergers with two of my colleagues. My friend was describing a small company who is struggling with their pricing and business strategy. As it turns out, the company grew through acquisition and thinks that they are leaving money on the table. Companies equate mergers with growth, but ineffective mergers can have the opposite effect. A well-intentioned growth strategy can have negative consequences on selling and the customer experience. 

For the purpose of this narrative, we’ll summarize the business situation mentioned above—and call them Company A (because I’m lacking the creativity to find a more alluring name). Company A is realizing that they don’t have a global view of their customers, their pricing, their discounts. Their pricing methodology is disparate across business lines, and in some cases, unknown. Sales reps have full authority to make pricing changes with no accountability, and no corporate visibility. Sales reps are (inadvertently) underselling other business lines. Their customers are confused and frustrated.  It is harder to do business in the “new” company, than it was before the merger. In a nutshell, their customers think the patients are running the asylum…

So now that you have the picture, you can argue that there are a lot of reasons for why this occurs—and you’d be right.  But without the right plan in place to address the customer experience and sales, your growth goals will be hindered. Here are some things to think about:

• You’re not buying a clone of yourself, no matter how well aligned you may think you are. 
• Not every sales rep sells alike; so it is unlikely that your business divisions will sell alike. Disparate selling efforts and strategies can undervalue your portfolio. Leverage best practices, and develop (or revise) training to increase sales effectiveness.
• Sales preparedness. Can your sales team effectively explain the merger or acquisition to their customers? Customers want to know how the changes will affect them, but they also want to understand the big picture. Help them “sell” the merger/acquisition.
• Understand the pricing practices across the units. Pricing methodology may be a misnomer and you may be leaving money on the table. Believe it or not, pricing is not always established with profit in mind…
• Contract terms, pricing terms, billing practices, etc. This can be a deal killer—your customer pulls out a contract from your sister division and uses it against you in the negotiation. These terms don’t need to be alike, but if your sales management and reps aren’t educated and prepared to explain, deflect, defend then you’ll undermine the negotiation, every time.
• Your customer experience will vary by business unit, good and bad.
  • What is the customer experience like now—post merger?
  • Does your customer feel like they are doing business with two or three (or more) companies, instead of one (selling, billing, customer service, operations, tech support, etc.)?
  • What are your customers expectations regarding the merger and how will you manage them? I once had a customer who thought that all of our business units would immediately match in terms of processes, customer satisfaction measurements, reporting, billing functionality, etc. Once we re-set expectations, life was much easier for all of us…
• Practice, not just policy, should be investigated. For example, your divisions may have a policy for pricing changes but the practice may be as simple as the sales rep calling Customer Service or making the pricing change for themselves. Seriously, it happens.
• Not all customer reporting is the same. Meaningful customer data will assist sales and management efforts. Most employees will deal with raw data (if you can’t make it “pretty”) in order to understand their territory and customers. Trust me, there is always someone in the company who knows how to get the information you need.
• Immersion (aka portfolio) training will enable collaborative selling, reduce the sales cycle, improve price position and increase sales effectiveness. Don’t give them a marketing brochure and call it training.
• Develop a sales strategy for the porfolio (if applicable).  If not, develop a cross-sell program to improve lead generation and customer acquisition.
• Portfolio-based selling and cross-selling require training, CRM tools, communication channels, rules of engagement and incentives.
• Sales compensation for each business unit should be evaluated and aligned to the company goals. Compensation plans drive behavior– incent the behavior that you need for retention, profit and growth.
• In a merger, there may be a newly-created hierarchy in the selling chain. Some units will pay more based on the relative sophistication of the product or service and hence, the complexity of the sale. You need to be prepared to communicate and manage the perceptions and associated behaviors.
• Without the right plans in place, you can create internal sales competition–and that momentum will undermine your profit and growth goals.

Without a doubt, mergers and acquisitions are complex. But the best way to impede sales growth is to ignore their impact on selling and your customers.