Your existing customers are gold, especially during big business changes
M&A activity is expected to surge in 2024 according to analysts at EY-Parthenon, McKinsey, and more. These acquisitions can take on many different flavors – a merger where both brands are retained, an acquisition where one brand is slowly folded into the other, or an immediate sale and shuttering.
If your company is preparing for an acquisition in 2024 it can be a thrilling experience, but also extremely daunting. The challenge of setting up your brand and marketing for success is one that many leaders either don’t have time to tackle or don’t have the resources or money to get it right. As a Marketing leader, you need to be thinking about:
TEAM
- Do I have the right team in place to make the acquisition successful?
- What does the new Marketing team look like post-acquisition?
- How do I communicate in a direct and empathetic way to people who are likely nervous about keeping their jobs?
BRAND
- How does our brand strategy and architecture evolve?
- Do we consolidate brands? Does the brand we’re acquiring continue to live on?
- Will we have a branded house or a house of brands?
- How do these decisions get translated into our marketing and go-to-market activities?
CUSTOMERS
- What does the acquisition mean for our customers? Will they see it as positive or negative?
- How does it impact their customer experience?
- What concerns will customers have that we need to hit head-on?
- How do we keep our strategy ‘customer-first’ when we’re putting the customer through significant change?
- What is our communication plan?
- If there’s a customer conversion, what is the customer-first conversion plan?
These questions are just the tip of the iceberg.
As a team here at Growth Street, we have built customer-obsessed strategies for companies during a wide array of mergers and acquisitions – E*TRADE’s acquisition of JP Morgan’s BrownCo, LogMeIn’s acquisition of GoToMeeting and Jive, Thermo Fisher Scientific’s acquisition of numerous biotech and life sciences companies, and more. From these experiences, we’ve developed strong perspectives on the important, strategic role of marketing leadership during an acquisition. We’ll share why customer-obsession is absolutely mission critical at this time, and analyze some of the recent marketing tactics of today’s major acquisitions. Giddy up!
The Elevated Role of A Marketing Leader During an Acquisition
As marketing leaders, our day-to-day vacillates from being up at 30,000 feet and down on the ground in the weeds. During an acquisition, we have to think far bigger and bolder than we might be used to doing. In our work with our clients during M&A, we see brand and marketing leaders who are already stretched thin being asked to take on a monumental amount of new work. Making strong strategic connections between brands and creating a holistic, customer-obsessed plan is key to maximizing an acquisition and delivering ROI from the deal. The marketing leader must have a seat at the executive table.
Customer-Obsession is the Linchpin to Successful M&A
From our perspective, it’s critical to go through the acquisition planning and execution with a customer-obsessed mindset. Now is not the time for businesses to take any chances of losing steady business from their loyal customers, for a few reasons:
- Customer retention leads to long-term growth. Your current customers are steeped in trust and brand loyalty, and they can grow your business faster than a new customer starting at square one. Studies show an increase in customer retention by 5% can lead to a company’s profits growing by 25% to around 95% over a period of time.
- Your competitors will welcome your customers with open arms. Your competition knows this is the time to try to poach customers who might be concerned or unhappy. Don’t give your customers any reason to consider switching!
- While this M&A might be exciting for you, your customers are worried. A Gallup analysis shows that B2B companies are already at risk of losing a large share of their customers — only 29% of B2B customers are fully engaged. A major change such as an acquisition can give unhappy customers the push they need to break ties. For example, Gallup research on the banking industry reveals that the average annual customer attrition rate is 5%, but is significantly higher (8%) among customers of acquired banks.
One of the most overlooked aspects of M&A is the customer.
It’s easy to get wrapped up in the complexities of the acquisition process and forget what your customer is experiencing on the other side. But executives must keep in mind that customers have a CHOICE. They can decide to continue on this journey with you under the new company or decide to part ways. Make the decision easy for them with a customer-obsessed strategy.
Now let’s dive into some case studies of recent mergers and acquisitions and the customer experience of each.
(Note: We want to preface these case studies by saying that these are our observations and insights from the outside. We know there’s always more to the story and we come from a place of curiosity and learning.)
Uber Sunsets Drizly: As Customers, We’re Scratching Our Heads
Here at Growth Street, we are fans of Drizly and Uber. We’ve ordered many tasty beverages through Drizly (customers for a long time!) and taken many comfortable and convenient Uber rides (5-star ratings!). As Drizley customers, we lament the Drizly shutdown and, at the same time, we’re curious about the customer experience strategy of this acquisition.
When the acquisition was announced in 2021, the communication was that Uber would ‘accelerate Drizly’s mission”, but fast forward to January of this year and that has changed. After three years of Drizly operating independently within the Uber family, Uber will shut down Drizly and focus on consolidating delivery services under the Uber Eats brand.
Drizly has a passionate customer base. The brand voice has always been clever, fun, and conversational – like your best bartender friend. Drizly branding could be seen around the company’s hometown of Boston, sported by employees and customers.
With this recent news, as Drizly customers, we’re wondering:
- What does it mean for me?
- Will my account automatically be moved over to Uber Eats? Or do I need to create a new one?
- Will the ordering/payment experience remain the same?
- What will happen to my order history, customer assistance history, etc.?
Customer-Obsessed Observation: Where is the love?
As Drizly customers, the impression that we’re getting is that Uber isn’t all that interested in retaining us or moving us to Uber Eats.
A few of us at Growth Street receive emails from Drizly and, while the communications do a good job of telling us Drizly is going away, we see an opportunity to introduce Uber Eats and build messaging and experiences that promote us using Uber Eats. In one email, in particular, there’s an Uber Eats coupon that’s displayed under the Drizly communication.
[Source: Drizly customer email]
A customer-obsessed way to do this? Introduce Uber Eats and tell us that we can order drinks through the app, maybe give us an incentive to try it, along with some content to learn more. Instead, we get an ad, and still are not entirely sure what’s going to happen as a Drizly customer. Will we become an Uber Eats customer?
Another opportunity for customer obsession is through Drizly’s Instagram profile. This message below is pinned at the top of their Instagram profile. There’s a reference to moving on to Uber Eats, but no direct instruction on what to do or a link to an FAQ page to get these questions answered.
[Source: DrizlyInc Instagram]
A customer-obsessed way to do this? Give customers the next steps to continue doing business with Uber, once Drizly shuts down. Reference what experience they should expect – or a link to more information about the closure. And they mention exclusive perks – give clarity on when and where a customer can expect to have access to those.
We know there’s a lot we don’t know – perhaps more active users are getting completely different communications. Or perhaps it’s not where they’re focusing their resources and priorities. Or maybe they’re shifting strategies completely to support corporate or wholesale deliveries.
Only time will tell, but for now, we’re left scratching our heads.
Salesloft + Drift, Cisco + Splunk: Tech Brands Putting Customers First
It’s been a challenging time for funding and growth in the tech sector. Cheap money ran dry in early 2023 causing the tech bubble to finally burst and M&A to increase. Throughout this, customer experience has become a critical differentiator.
Let’s explore two recent acquisitions – Salesloft and Drift and Cisco and Splunk – and how they have demonstrated a customer-first approach in their announcement communications.
Customer-Obsessed Observation: Salesloft knows what Drift customers care about most
On February 13, Salesloft announced it would be acquiring Drift. Both companies have invested heavily in advancing their use of AI tech, and subsequently adjusted their core messaging and core value propositions. By connecting the points of a prospect’s inbound early web engagement (Drift) directly to the outbound sales outreach (Salesloft) this acquisition could smooth out a common sticking point in the buyer cycle for sales and marketing teams. This could be an extremely powerful revenue accelerator for companies finding it hard to convert prospects into customers.
Salesloft gets in the Drift customer’s mindset by cutting to the chase and answering top customer questions up-front. On the main announcement landing page, above the detailed press release, Salesloft used prime web real estate to address top customer concerns about payment, innovation resources, and existing integrations. Take a look:
[Source: Salesloft]
Three clear bullet points leave both Salesloft and Drift customers feeling reassured that
1) payment structures will remain intact
2) customers of both products will continue to see innovation and
3) existing integrations and partnerships will not be impacted.
Customer-Obsessed Observation: Cisco meets the Splunk customer where they are
This one is hot off the press – news broke as we were writing this post that Cisco completed its acquisition of Splunk. According to Cisco CEO Chuck Robbins, the combination of Cisco and Splunk will help prevent cybersecurity threats and limit downtime for its customers, by providing “secure customer and employee experiences across the physical, digital, and AI-powered worlds.”
The communication provided to customers on the day of the closing was consistent, with repeated messaging across several formats.
On announcement day, a dedicated landing page went live with tons of information. But what truly stood out was the ‘choose your own adventure’ of CTA’s to learn more. Customers could read a press release, click through FAQs, sign up for a webinar, or take note of upcoming events Cisco will have a presence at.
[Source: Cisco]
The team at Cisco knows that consumers are going to take their time to digest this information. They are meeting their customers where they are at various touch points over the next few months. They understand this transition is not a sprint, it’s a marathon.
Bottom Line: Get Customer-Obsessed with Your M&A
Mergers and acquisitions can be a beast. The Growth Street team has expertise in ensuring customer experience and loyalty during times of transition when you need it the most. Our team can help you:
- Get customer-obsessed to create M&A success
- Create customer communications and experiences that deliver transparency and minimize churn
- Determine how to combine entities and brands for the highest customer retention
- Set acquired customers up for success in new tech (while sunsetting old tech)
- Achieve efficiency and ROI from your M&A efforts
- Learn more about our M&A Sprint here
If you’ve got M&A on the horizon, let’s connect and talk about how to get customer-obsessed. Giddy up!
This post was co-written by Colleen Trinkaus and Michelle Heath.
Colleen Trinkaus is part of the Growth Street A Team. She is a Boston-based B2B marketing consultant with 12 years of experience spanning a top 10 SaaS company, a handful of startups series A through C, and a boutique consulting firm. Colleen was a key member of the marketing and communications team during the historic Parthenon-EY merger and later led the content strategy for LogMeIn’s collaboration suite that steadily grew by acquisition (including GoToMeeting, Jive, Grasshopper, and more). Colleen’s passion and expertise lie in content strategy and messaging – building content that resonates across the entire buyer journey and guiding demand generation partners to activate that content to meet revenue goals. Follow Colleen on LinkedIn.
Michelle Heath leads the Growth Street A Team. She is a former in-house CMO turned founder, CEO and fractional growth leader. She built brands and led high-performing teams for Fortune 500 companies including J.P. Morgan Chase, where she grew the active trader business, BrownCo, which was acquired by E*TRADE Financial for $1.6B. Her expertise is steeped in an early indoctrination in usability, user-centered design and customer experience, which shaped a unique way to tap into customer-obsession to drive business growth. She works with her M&A clients including, Thermo Fisher Scientific, to build customer-obsessed strategies that maximize value and unify brands. She shares her advice, experience and curiosity on LinkedIn. Giddy up!
Photo by Giorgio Trovato on Unsplash
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