How does a corporate acquisition affect service and support provided by an acquired supplier? What about the company making the acquisition?
Maintaining a high level of customer service can be a challenging experience when an acquisition takes place.
This issue is of particular relevance to the security industry, where merger and acquisition activity continues to rise. We asked some of our Expert Panellists to share their thoughts on how both the acquired company as well as the company making the acquisition can retain the focus on their customers throughout the integration process. Here’s what they had to say.
Most acquisitions have a major ripple effect through the acquired organisation. This often causes interruptions in service and support at multiple levels. In my experience, this interruption happens initially just due to the normal process of integrating two companies. The key for a customer of such an organisation is understanding the longer term strategy of the newly combined companies. In many cases, this strategy involves the phase out of some products, thus further affecting the service and support. In other cases, the goal may be to strengthen the specific product/service area by adding additional resources and thus improving the service and support after the initial disruption from the acquisition. Customers of the acquired organisation must find out this longer term strategy to make a decision on staying with that supplier or finding an alternative.
When one company acquires another, it takes time to evaluate how both businesses will work together moving forward. But before the deal closes, the executive teams must strategise on how to best continue to serve customers and offer optimal support. The goal is to make the acquisition seamless and transparent without affecting a buyer's confidence in the combined product and services. Most executives say they want it to be "business as usual" for customers and partners and that always should be the goal when moving through this kind of business transaction.
It seems as if smaller entrepreneurial companies often lose their “edge” when they are acquired by existing, larger companies. The corporate culture of smaller companies, which is a key factor in their service and support commitment, can lose its way amid a larger corporate bureaucracy. Sometimes the visionaries who drove the acquired company’s success are bought out and leave, and they can be sorely missed. Key managers and other employees may also opt to leave and take institutional knowledge with them. Integrating service and support needs for an acquired company can be a challenge to the acquiring company’s existing service and support infrastructure, not to mention the new types of technology (from the acquired company) to be dealt with. The industry is full of end users and integrators who will tell you horror stories along these lines.
As our Panellists have discussed, the transition phase when two companies integrate can be a challenging time in terms of customer relations. When smaller entrepreneurial companies are acquired, it is important to ensure they don’t lose their way, as Larry says. If key members of staff are forced to leave, the quality of service provided to customers is sure to suffer in some degree.
So what is the solution? Ensuring the customer is aware of the long-term strategy behind the acquisition can be vital, as Greg points out. The acquisition process can also be an advantage in that additional resources can be directed towards product development and customer support. Omer makes the valid argument that it takes time to work out how both businesses will work together moving forward. Before both parties come to an agreement, a strategy should already be in place regarding ways to continue serving customers in the best way possible. A customer’s confidence should not be compromised by the acquisition process but rather they should feel reassured that, as Omer points out, business is continuing as normal.
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