So you’ve acquired a company and you’re merging it with your own. It makes sense to save money by eliminating sales and marketing redundancies.
It makes sense to save money by eliminating sales and marketing redundancies.
With an investment of this scale, there is a lot to think through. Consider the following before you merge sales forces.
Before You Begin, Think About the End Goal.
Your culture and overall investment hypothesis govern the cost savings you achieve.
- Are you looking to recover cost?
- Are you looking to take a cost leadership position?
No matter your end goal, the priority should be minimizing disruptions.
How to Start: 5 Critical Evaluations
There is a link between the left and right sides of the balance sheet. There is no such thing as a “no-cost” termination. There is always a revenue impact when you terminate an employee.
Do these five critical evaluations as you move forward:
- Evaluate the different cultures.
The two company cultures will probably be dissimilar. Take some time to get to know the differences. Then help the combined sales force understand the “net new” culture. This process will help you determine how many people must be released, how quickly.
- Evaluate the people.
The merged organization will need to match the competency profile of the acquiring company. Take a close look at employees and identify those who don’t fit that profile. Then handle terminations properly, under appropriate regulations and following legal requirements.
It’s important to assess your talent, particularly sales talent, in a consistent and comprehensive manner. We’ve created a Talent Assessment tool that will help you quickly identify your strongest sales talent. This assessment tool will give you the information you need without costly trial and error. Download the Talent Assessment tool here.
- Compare both companies’ direct sales ecosystems.
First, conduct a value-chain analysis on the sales process:
- What is it about both organizations that customers value?
- Analyze the series of interactions the client is having with the marketing function at each company.
- Explore the value the buyer places on your companies’ activities.
- Assess your buyer’s willingness to part with certain activities.
Second, do a direct sales assessment:
- Evaluate the Net Promoter Score for each customer.
- Review customer post-purchase surveys.
- If possible, use an independent agency to determine how customers are evaluating the sales reps. Have the agency survey customers who have had exposure to both companies. Also have them survey customers who haven’t worked with, but are considering, either company.
- Compare both companies’ partner ecosystems.
Which partners will continue working with the new, merged organization? Which partners have overlapping functions?
Some partners may not want to move forward with the merged organization. Communicate the change with partners — explain the value they will get from the merge. Actively cultivating those partner relationships may kindle their desire to stay with your company.
- Do a “dis-synergy” analysis
Review the sales opportunities for both companies. Explore for each:
- Active opportunities. Where can you perform risk remediation? How can you assure clients?
- Near-term prospects. Consider where there are relationships and where there is activity.
- White space. Are there people that neither company has engaged in a meaningful way? Where are the overlaps with products, solutions and value propositions?
How to Handle the Reductions: The Pace and the Plan
There are two schools of thought on the speed of redundancy reductions:
- The “rip the band-aid off” approach. With a speedy approach to departmental reduction, you risk making bad decisions. And bad decisions can lead to increased cost rather than cost reduction. There is often no sales territory design, no customer engagement and no set quotas. The sunsetting of your overlapping offerings is also often overlooked with this approach.
- The “go slow” approach. With this approach, you might be missing out on talent upgrades. Both selling groups are still doing what they’ve been doing – it’s status quo. By not merging quickly, you can miss the benefits of an enhanced product portfolio. You’re also not improving your value proposition.
There is actually a third, better approach: unified sales management.
Creating the role of a unified sales manager consolidates the reduction tasks. This manager can:
- Arbitrate disputes
- Decide the right value proposition for the new organization
- Minimize disruption and maximize visibility
No matter which approach you take, you will need an arbitration process in place. This will help determine account ownership, account reassignment and compensation. Take your time with the compensation piece, though. Evaluate and address territory potential and put a process in place to address compensation.
Set time and cost-savings expectations appropriately. Your ultimate goal should be to minimize disruptions.
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