With so much merger and acquisition activity occurring within the High Tech Industry, I thought it would make sense to understand how sellers should deal with their most valuable assets, their salespeople. I posed this question to my friend and business partner, Joe Vanore at Everingham & Kerr, who gave me permission to republish this article from the company’s June/July 2014 newsletter….
Knowledgeable, experienced salespeople with strong customer relationships are worth their weight in gold — or perhaps the premium paid to acquire their company. So the last thing you want to do as you integrate your acquisition is alienate this valuable group of employees. Instead, focus on convincing sales staff of your merger’s merits and involving them in the planning process.
Thwarting the competition
As soon as your deal is announced, competitors are likely to contact your target’s customers to persuade them to jump ship, claiming that your combined organization will be too big or bureaucratic to effectively serve them. Competitors will also attempt to recruit your best salespeople.
Act quickly to thwart competitors’ efforts and reap the benefits that attracted you to the transaction in the first place. Help salespeople communicate the deal to customers by preparing a script that explains expected changes and how customers will benefit. Include FAQs and provide the name of a person in the organization who can answer questions your sales staff can’t.
Face to face meetings
Also be sensitive to the morale in the sales department. It’s not enough to communicate upcoming events via e-mail. CEOs of both organizations need to meet face-to-face with their salespeople as soon as possible to address rumors, reassure employees of their job security and discuss potential opportunities within the merged organization. Keep these presentations short and spend time listening to employee concerns.
Salespeople will — above all — want to know how the deal will affect them. For example:
- Will the sales forces of the two companies be combined?
- Will salespeople now be expected to sell 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 off hand, promise that you’ll respond as soon as possible — then keep your word. Following these meetings, salespeople can return to their work and communicate a consistent message to existing and potential customers.
Even the most loyal employee will consider a competitor’s offer if the price is right. So consider financial incentives, if you hope to retain top sales producers (and their customers) and encourage staff to cooperate with new colleagues and share knowledge. 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. While interim bonus programs may be expensive in the near term, they can prevent sales from dropping off during the merger process. And they will help you generate far more long-term revenue to offset the immediate cost.
Ask the real experts
Because they work in the trenches, salespeople may have cross-selling and other ideas. Create a temporary sales leadership team to evaluate possible downside risk and increased sales potential. The team should include two to four seasoned salespeople who focus their efforts on retaining customers and maintaining sales during the integration.
There are many ways the team can help accomplish these goals. It can serve as a clearinghouse for customer concerns and employee confusion over the future of product and service offerings. Team members also might have ideas for new product and service offerings or combinations. Sales leaders can be valuable in identifying and monitoring at-risk accounts.
A fragile link
Although all personnel affected by a merger deserve honest communications and an opportunity to voice their concerns, it’s particularly important to keep salespeople in the loop. Your sales staff is your direct link to customers, and this link can be broken if it’s not handled with care.