Merging Sales Teams After an Acquisition

The Hunt for the Elusive Revenue Synergies

“Nearly a quarter of acquirers are able to achieve

at least 80 percent of their revenue synergy targets.”

Deloitte

Synergies.
The interaction or cooperation of two or more organizations to produce a combined effect greater than the sum of their separate effects.
One plus one equals three.
The holy grail of mergers and acquisitions.

“Resulting from companies with different cultures, management styles, clients, and even hiring practices, a merged entity generally experiences its greatest heartburn from the human impact.

This is particularly true for sales organizations, which McKinsey pronounced ‘one of the hardest parts of a merger to execute.’

Done correctly, and a merger will deliver greater revenue growth and value for the combined organization. But, to get there, the company will need to choose a singular playbook and philosophy if they are to conquer the marketplace with unity.” (Michelle Richardson)

A survey by Deloitte proudly claims that nearly a quarter of acquirers are able to achieve at least 80 percent of their revenue synergy targets. Digging deeper into the data, though, is very revealing:

- Only 6 percent of all acquirers achieve 100% of their revenue synergy targets.

- And 30 percent achieve only 50% or less of their targets.

I take this as a combination of overly ambitious deal economics (well, the numbers have to work on paper, otherwise there is no deal) and poor execution. Personally, I have been part of both.

Merging sales organizations and ensuring that they deliver the revenue synergies is hard work. On paper, especially when grasping for straws to make the deal work, it always looks logical and makes sense. It almost always ignores the human aspect of sales: the team, the clients, and their interactions.

Drawing from various sources, here are some best practices to make sure you and your merger end up meeting the targets:

Provide a 20/20 vision

It’s critical to ensure from the first post-merger moments that the combined sales team understands the vision – and related strategies – of the merged entity. If not done quickly, the sales team will likely fill in the gaps on their own (Michelle Richardson). Very simple: Why are we together, and why is this good. Each team member needs to be able to tell the story.

Pursue the low hanging fruits of cross-selling

The most commonly used tactics by high achievers are (1) new sales incentives, e.g., dual compensation to sales teams, (2) team sales efforts, (3) enablement of systems to share leads, (4) geographic expansion (Deloitte). Pick easy ones for fast results and consider additional incentives an investment into the future.

Coddle the customer

Protecting your book of business is critical during this period of change, and the customer will want to understand: Will the products remain consistent? Will I get my orders on time? Is my price protected? Reassurance is key, so getting your aligned sales team out into the field quickly will help build momentum (Michelle Richardson). Overcommunicate and stay consistent; the customers will look for the first sign of change and perceive it negatively.

Cast a wide net

Given the risk inherent in any individual revenue synergy initiative, diversification can create a virtuous cycle of growth enabled opportunity expansion—increasing the odds of meeting targets: access new markets, access new customers, international expansion. (Deloitte)

Consider the cultural implications

A huge barrier to a smooth integration is the cultural difference that existed between companies. Sales leaders from both organizations should first work to define which behaviors, skills, and knowledge reps need to execute the new, combined go-to-market strategy. Then they should adopt an overall sales enablement program to incorporate the best practices and behaviors of both companies into onboarding, ongoing training, and coaching efforts. (Alec Shirkey) How do you bring a dynamic, sales-driven startup and the slower-moving corporation that purchased it together? When you're in a large corporation, there's something to be said for having a comfortable position, making good money, and not sticking out.

Earn buy-in from the sales force

If sales reps are not able to formally voice concerns and challenges related to integration, then they’re likely to be less invested in the results – and more likely to continue doing whatever made them successful before the merger. (Alec Shirkey)

Ultimately, we as humans find change difficult or uncomfortable. And when it’s forced upon us, we can often be skeptical of how this change can affect our status quo.

“As customers change how they buy and the marketplace continues to evolve with mergers and acquisitions, the sales force must evolve how they engage customers and how they sell,” writes Ty G. Swain. “If the team is brought together to focus on the role of sales and its part in defining top performance and sales success, transformation will occur because the team realizes they drove the process and result.”

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Michelle Richardson - Assimilating Your Sales Teams in a Merged Company Environment

Deloitte - Revenue synergies in acquisitions

Alec Shirkey - 4 Keys to Post-Merger Integration for Sales Teams

Ty G. Swain - Blending sales teams after a merger

Photo by Anne Gosewehr