Don’t Let a Merger or Acquisition Derail Your Sales Results

7 Critical Actions That Drive Sales Success

Careful planning is needed when companies combine through mergers or acquisitions.  The financial aspects of the merger get lots of attention, but sales force issues can be left unresolved.  In the long run, taking the proper steps to ensure that the new sales force operates effectively from day one could have the largest impact on future financial success. Key steps are:

 1 -Determine the New Sales Management Team

In all probability, sales momentum has already been negatively impacted by the merger.  Prior to the completion of the merger, uncertainty abounds and rumors will sweep through both sales organizations.  Your top performers are vulnerable to competitive offers during this time.  Act fast to lock in your best talent.

Due diligence requires more than a financial review.  Evaluation of key sales personnel needs to be a critical component of your merger planning.  Management needs to move swiftly to get the new sales force in place.  Decisions regarding the sales leadership team need to be made in advance of the merger date and the new sales leadership should be in place and focused on the day the merger is finalized.

 2 – Establish Your Value Proposition and Make Sure Every Sales Person Knows It

Your sales team has to clearly understand your strategy and be able to effectively present it to your clients.  The combined organization has expanded capabilities and greater resources. You need to clearly define your message so that your customers and prospects understand how they can benefit from your new organization.  Test your message early in the transition and ask your clients for feedback – adjust your message as necessary.

 3 – Resolve Account Conflicts Before They Hurt Customers

Prior to the merger, if both companies provided similar products in the same markets, account conflicts within the combined sales force are bound to occur.  Successful resolution of these conflicts is one of the most important factors in keeping revenue growing, but it is also one of the most difficult to achieve.  Every large customer needs to be reviewed in an impartial manner.  A number of factors come into play:  where in the customer’s organization is each rep positioned; how much revenue does each rep produce from the account; how long have they been involved with the account; and what does the current sales pipeline look like for each rep?   Ultimately, account ownership should go to the rep who offers the best chance of maintaining and growing the customer relationship.

 4 – Evaluate Staffing Levels in Every Market

Growth in the size of your sales force does not equate to an expansion of the market served by that group.  I learned this through experience.  My top management wanted fast revenue growth so they left all the reps in place following a merger.  We ended up overstaffed in many markets and sales results suffered as territories had to be reduced to accommodate the larger number of reps.  With fewer prospects, sales results slipped, profitability declined, forecasts were missed and turnover increased.  Performance didn’t get back into balance until the combined number of reps was brought in line with market potential.

 5 – Set Sales Territories Quickly

When sales territories are not clearly defined for each sales person, sales productivity will suffer.  Reps will chase the wrong type of accounts or compete with each other for the same business.  Inexperienced sales people will go after complex accounts with no chance of success but a high likelihood of damaging your reputation.  High potential prospects will be ignored while sales people chase home runs with little probability of success.  Territories can be list based, segmented by prospect size or industry, geographically based, or developed based on any number of other factors.  There is no perfect formula.  The key is to have territories that are clearly defined and properly sized.

 6 – Integrate Comp Plans ASAP

As a matter of practice, sales activity will be determined by the comp plan and not by management’s wishes and strategy.  If the pre-merger plans are left in place, sales reps will focus on any perceived unfairness between the plans – especially if it can be demonstrated that one plan pays more than the other for a similar sale.  A smart sales rep will look at the comp plan and figure out the best way to maximize his or her income.  If you need to drive new customer acquisition, your comp plan better not direct reps toward customer retention.   If you plan to foster the desired sales results, address the problem immediately.   The answer is to create a plan which drives the sales force toward the revenue goals of the company and apply the unified plan to the entire sales organization as quickly as possible.

 7 – Review the New Order Flow and Make Sure It Works

It may seem obvious, but mergers often disrupt systems and processes.  In a merger I was involved with, the acquiring organization was surprised shortly after the merger when they realized that one of the products offered by the acquired company required a sales engineering review.  Unfortunately, because of a lack of understanding of this process, all of the sales engineers were eliminated during the reorganization.  The backlog expanded and customer service deteriorated.  Orders were cancelled and revenue was delayed until alternative plans could be put in place.  The problem was avoidable, but no one had walked through the order flow prior to making the organizational changes.

At Sales Xceleration, we know that many organizations suffer needlessly from a merger or acquisition.   While mergers and acquisitions have an impact on every part of a business, the changes to the sales organization should be a priority.  Financial performance is directly linked to revenue production, so if you need help making sure your sales issues are addressed early in the process and resolved quickly and effectively, contact me today at 210-325-4004.