All views expressed are my own and have do not reflect views of FTI Consulting in any way.
Over the last few years, M&A has become a top line growth play in many sectors making customers the center of focus during integration between two companies. Acquirers have evolved from defensive plays around customer retention to aggressive customer acquisition, proactive predatory plays on new customer segments leveraging acquired capabilities and enhancing customer experience. While CX (Customer Experience) has in itself evolved into a well-defined body of knowledge, its application in the M&A context is often not well understood. The last few transactions that I have done, my clients have explicitly requested assistance and advice with CX with full work streams swinging into action with the IMO.
There are several aspects to CX as a value driver and is integral to other levers of value such as Brand, Channels, Products, Customer Segments etc.
Core Objectives of CX during M&A Integration:
- Preserve (existing) and enhance (develop new) customer experience through disciplined execution M&A Integration
- Drive customer acquisition, retention, brand strategy and loyalty by providing distinctive customer experiences through focused CX integration
- Make enhanced customer experience a catalyst to drive revenue synergies utilizing key levers such as branding (premium positioning) , products (enriched experience and creating stickiness), pricing (pay for value), customer segments (penetrating new customers) and channels (generating additional pull)
CX – Transaction Considerations:
- All customer touch points from both companies require careful attention, the interaction model at each touch point needs to be understood for where it needs to be preserved and what needs to be enhanced. Each customer segment values interaction model(s) differently and hence mapping them to right customer segment is critical
- Apart from considering CX being its own work stream, embedding it into all ancillary work streams is a leading practice , more specifically areas touching sales, marketing, service and support
- CX can be positively or negatively impacted due to changes in policies, operational processes or systems. Anticipating the neutral and negative experiences of key customers or customer segments will help design appropriate safety nets against dissatisfaction or flight risks; typical components of safety nets include promotions, targeted incentives, executive coverage and operationalizing exception management processes
- Prior to Day One, ensure that there is adequate infrastructure, systems, and training to support the target customer experience. In fact, this has to be very high on the priority list during Integration Planning
- Use product bundling, packaging and delivery and key levers for enhancing CX; train sales, marketing, and service to position, communicate and sell CX as a key differentiator
- Understand, document, measure and report customer experience across all relevant functions such as Sales, Marketing, Service, Support, Product Development, R&D Billing and Invoicing
Customer experience is not a nebulous thing in today’s age, it has significant impact on transaction value realization and can be analyzed and executed in a very actionable, measurable and tactical manner.