Case Studies

Vertical integration

Recipe for Success
When combining ingredients in a recipe, execution is key to producing a delicious product and avoiding something inedible. Similarities can be made when moving through the process of combining two companies... Read more


Customer-Centric Post Merger Integration

In a typical merger, there are two main types of synergies that can be gained, cost synergies and opportunity synergies (sometimes called strategic or growth synergies). Cost synergies are usually gained from the consolidation of resources, which are either human resources or non-staff resources such as equipment, inventory, buildings, etc. Opportunity synergies are gained through enhanced performance that could not have been achieved without the resources, products or additional services of the newly acquired firm.

Customers drive business; it is nearly impossible to maximize your opportunity synergies if you lose focus of your customer. Therefore, each account that is lost through the Post Merger Integration (PMI) process chips away at your opportunity for growth that you were anticipating by entering into the merger in the first place. This is why it is critical to maintain a Customer-Centric Post Merger Integration process.

There are three keys to success when striving for a Customer-Centric PMI:

  1. Maintain transparency with your customer
  2. Ensure continued performance throughout the transition
  3. Integrate your customer-facing activities last

Transparency with the customer can be a delicate matter that needs to be balanced correctly. First, you need to notify your newly acquired customer base about the merger, but in doing so, there needs to be an emphasis on how this change in business will positively affect their service. The main reason for communicating upfront is to ensure that your customer hears the correct information from the company, not from other sources. Do not overburden your customer with updates that are not important to them, provide them with pertinent information related to how they interact with your company. Remember, your objective is to retain as many profitable customers as you can.

Ensure continued performance through the transition. Cross-functional communication is imperative to push through the PMI process while maintaining performance as an organization. Developing an integration team that is made up of smaller functional teams, each responsible for how their specific function transitions, as the companies move together, will allow you to manage the success of the integration. Maintain special focus to customer facing employees and processes. One way to do this is by setting a plan in place to retain your key employees through employee retention packages, PMI sales targets, and clear communication, etc. As the primary customer facing activity, the sales force needs to be communicated to upfront and regularly so that rumors don't fly and the sales people don't start jumping ship. Objective: high customer retention.

Integrate your customer-facing activities last, ensuring all processes and systems are in place to handle the additional customer base. With staffing, territory, customer service and logistics plans completed transition shouldn’t be done all at once, with customer retention the primary objective. The time it takes to mesh the sales force will be dependent upon the products sold by each of the companies. The more complex the product is, the longer it will take to train for cross selling. It may be better to have duplicate sales coverage for a period of time than to have an inadequately trained sales force.

Successful mergers require careful planning, focus and attention on retaining customers and key human resources. A well designed Post Merger Integration plan can ensure that the appropriate structure, systems and procedures are in place to maximize the return on the merger dollars invested through the realization of both cost and opportunity synergies.

For more information on how Genoa Business Advisors can help develop a successful PMI Plan, call us at 651-255-4850, or visit our website,