M&A's Impact on Customer Service

Customer Service
Customer Service

When news of a merger or acquisition hits, the focus is usually on whether the move is good for stock prices, quarterly revenues, and market share. What isn't mentioned is whether two companies' combined strength is a good move for customers. The same is true of the actual decision to combine service and support resources, which is made by board members and financial executives who may not consider whether the new operation will better serve customers.

We spoke to an executive from a large retail chain whose company is facing this challenge, having expanded recently via acquisitions. Many of the acquisitions resulted in customer backlash due to initial customer service and change management issues, so he asked to remain anonymous.

In an effort to combat a "corporate takeover" reputation, his company now tailors its direct mail and purchasing programs to its local stores, recognizing cultural differences in different regions of the country. In addition, the retailer is also testing an initiative to give individual store and regional managers more say into how stores look and what they stock.

He points to the fact that stores should retain their own identity. A store in an urban center, for example, shouldn't carry as many outdoor grills as a suburban store, because its customers primarily live in apartments. These are common-sense concepts, yet they sometimes get overlooked during the M&A process.

Beyond the financials, service, support, and marketing play a large role during a merger-creating a new brand image, reassuring customers that their service will go uninterrupted, and tackling the challenges of integrating redundant technology and combining two sets of employees. One company that experienced those challenges firsthand is Verint, which acquired Witness Systems last year to create Verint Witness Actionable Solutions.

"We learned early on that you can't really do any detailed planning until after the transaction is already closed and you see what redundancies you have," says Ryan Hollenbeck, senior vice president of marketing for Verint, and formerly a member of Witness Systems. "After we became one company, we started right away communicating with both sets of customer groups, which was particularly important in the B2B space."

Because Verint sells systems that come with service and upgrade contracts, the company focused on ensuring that customers were comfortable and understood they would receive uninterrupted support during the transition. After the initial outreach, the newly combined company created a number of core integration teams (CITs) to draft plans for integrating each department. Each CIT included regional managers from each functional area, and ranged in scope from legal and product development to service and support.

"Our customers told us the most important thing to them was not decreasing our service/support systems, and continuing to invest in R&D," Hollenbeck says. "Despite the redundancies, we committed to increasing our support systems by 150 percent and increasing our R&D resources by 200 percent."

He stresses the importance of customer feedback early on in the process. Verint surveyed customers immediately to measure satisfaction levels, and the company created a customer advisory council with representatives from both companies' customer bases. In doing so the newly combined Verint was able to see what customers considered the "best practices" from Witness and the former Verint, and prioritize those processes in the new company.

One best practice suggested by customers was to route support calls to specialists in each product set or industry served, rather than training agents on every technology the company provides. Today skills-based agents handle calls in less time and with higher satisfaction levels than before the merger. That's an example, Hollenbeck says, of not getting stuck thinking inside-out when a merger forces you to examine every system and process. Sometimes outside feedback is the key to success.

"We can measure internally all we want," Hollenbeck says, "but we don't know how well we're doing until we hear from the customer directly."