The Value of Communication When Faced with a Merger or Acquisition

September 17, 2019
The Value of Communication When Faced with a Merger or Acquisition

Last year was a big year for mergers and acquisitions (M&A) and according to Deloitte, the value of these deals is expected to increase from 38% in 2018 to 51% by the close of 2019. Why? Tax reforms that provide corporations and private equity firms with additional funding are a driving factor behind this flurry of M&A activity. While companies merge for many reasons, the need to expand the customer base in existing geographic markets remains a consistent top reason to merge with or acquire another company. Why, then, do so many companies lose track of the customer experience during the transition?

The telecom industry experiences an extraordinary amount of merger activity, so Escalent took a look at the experience and the impact on customers. Our study uncovered a gap between customer expectations and company communication during the merger process. This lack of communication often generates anxiety among the customer base. However, if a company can bridge customer expectations and communication, there are opportunities to engage a new set of customers while reinvigorating loyal customers.

Executing a successful merger is a Herculean task. (Escalent understands this firsthand, having just gone through one.) It is easy to lose focus on the customer experience when you are juggling legal issues and myriad internal deadlines. However, setting aside resources to prioritize a consistent and transparent customer communication plan before, during and after the merger can help prevent churn and, in some cases, strengthen customer relationships.

Findings outlined within the study include:

  • Two-thirds (66%) of respondents have strong feelings of curiosity or caution regarding mergers, while just one-quarter feel indifferent toward the process.
  • The top customer concerns for the result of mergers are service offerings and cost.
  • Most importantly, consumers indicate their desire for open, honest communication from the merging company regarding the process and outcomes. A communication strategy for customers should:
    • Explain the benefits of the merger
    • Describe how the merger will affect products, services and pricing
    • Educate customer service staff to quickly address customer concerns
    • Use preferred communication channels

The Bottom Line

When a company announces a merger, customers feel a range of emotions from nervous, apathetic, or indifferent to helpless. Empathizing with your customers’ feelings can actually foster greater loyalty. To craft an impactful, targeted message around your company’s merger, you need to first understand how your customers are different. Whether you are a car manufacturer, an energy company, a major retailer, a health supplier or a tech firm, if you are embarking on a merger or considering an acquisition you’ll benefit from reading What Customers Expect from a Merger or Acquisition.

 

Downlaod What Customers Expect from a Merger or Acquisition

Jeffrey T. Johnson
Senior Director, Tech and Telecom

Jeffrey is a director in the Technology & Telecommunications divisions at Escalent. With 18+ years of experience in the tech and telecom sectors, Jeffrey has led large, complex research projects with clients such as AT&T, Charter, Cingular, Microsoft, and Time Warner Cable. This experience has provided him unique insights into wireless (post and prepaid) and wireline customer satisfaction, market and flow share (which led to a co-owned methodology patent), churn, retention, onboarding, NPS, network, and overall satisfaction. Jeffrey prides himself on not only knowing the ins and outs of the telecom and tech sector, but the ability to communicate it in relatable terms—allowing for an actionable story from the data his clients can really use. Jeffrey lives in Oklahoma City, loves to run competitively, and has enough children to force critical vehicle and housing choices.

Kate Harris, Analytics Manager
Kate Harris
Analytics Manager

Kate is the analytics manager for the Technology, Telecommunications and Consumer & Retail divisions at Escalent. With 18+ years of research experience in the tech, telecom, financial services, and consumer products sectors, Kate has led large, complex research projects with clients such as Microsoft, Charter, Discover and Sabre. This experience provides her with a broad range of knowledge that translates between industries. Kate’s research background includes brand and product awareness as well as customer satisfaction. Kate prides herself on not only knowing the clients but also the customers of these industries. She has the ability to distill research intricacies into actionable outcomes for her clients and their customers. Kate lives outside of Philadelphia, PA. She is known as a dedicated ice hockey mom who travels all over the world to watch her son, a goalie, play.