Playbooks/pro tips for mitigating churn risk brought on by M&A?

Hey folks - Playbooks/pro tips for mitigating churn risk brought on by M&A?

Would greatly appreciate any wisdom from this group around tactics that have proven successful in helping to mitigate churn risk brought about by corporate events (m&a), whereby successful customers in the mid market (health scores are strong, adoption is good, we have an internal advocate) are acquired by larger enterprises that use an incumbent competitor vendor?

How do you try to work with the advocate?

How do you approach selling into the new parent company?

Thanks in advance!

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Comments

Steve Bernstein

Hi @Matt Timmins -- Yes, Waypoint's TopBox is the tech, providing deep insights at both the account level and cohort level (especially with key driver analysis for 1:Many small accounts). Here's a short 2-minute overview video and I'd be happy to discuss with you or provide other resources:

https://waypointgroup.org/topbox/

Brian Hartley

Hey @Matt Timmins I tried to split ours out into considerations around both the agreement and tactical.

Here is a snippet from our doc:

Transition considerations

Agreement
- Review the structure of each agreement to understand the mechanics of the investment with a new group
  - Additional license costs?
  - Additional proposal credit costs?
  - Additional “business lines or units” costs?
  - Are there any transition costs to onboard the new company?
  - What ancillary costs need to be accounted for? i.e. integrations/add-ons/etc. with the addition of new company
- Are there any specific termination provisions that would need to be accounted for with respect to the vendor that you are moving away from?
Tactical
- How long will it take the new vendor to bring over the new company’s content and stand up the environment?
  - Who is going to manage the transition internally? PMO or another stakeholder?
  - How will training and onboarding be facilitated to those users who are coming on to new tool? Will vendor help or will it be the responsibility of company? Costs?
  - Who will be responsible for educating new group on any gaps between two systems during on-boarding?
- Will one environment be used for the combined companies or will two be needed?
  - Cost implications if two environments?
- How will the vendor provide customer success to the two companies (under one entity)? Will it be one CSM or multiple?
- How will the company manage the relationship back to the vendor? Will there be one POC or multiple? How will work flow to and from vendor across business units?

Matt Timmins

Thanks @Steve Bernstein - super helpful and really like the approach! Do you use a tech approach to facilitate the feedback process, especially for the 1:many end of the market? Thanks!

Matt Timmins

Thanks @Brian Hartley - what are the top 1-2 considerations you have in the one pager?

Steve Bernstein

The only way I've seen it work is to build "bench strength" in the account, i.e. proactively engaging all the stakeholders that influence renewal / expansion decisions to have strong "promoter" relationships right from the start so that they will evangelize for you (i.e. "promote!"). This needn't be resource-consuming: the process we use is simply to engage those stakeholders via a feedback process -- ask them, with the help of your champion, to assess their experiences and success/outcomes) with a commitment to address what they tell you. Your follow-up commitment is the key to get them to respond to your request, and when they do you have an easy way to follow-up, whether it's 1:1, 1:Account (e.g. maybe in a QBR where you jointly update the Success Plan based on the feedback you've collected), or 1:Many (especially small accounts where there are common themes you can address). In other words, demonstrate to those contacts that you care and they'll engage.

We achieve 80%+ response rates with this technique, which not only drives strong relationships in the account, but also allows the rest of the company to hear the voice-of-the-customer. Creating, identifying, and activating promoters is the best way to accelerate growth IMHO. What does everyone think about the approach?

Brian Hartley

Hey @Matt Timmins we created a "What to consider when you have been acquired" one-pager to talk about the considerations when this activity occurs. I have used it a few times and while it was appreciated by our customer, the incumbent was still kept on. Tricky spot to be in for sure!

David Ellin

@Matt Timmins, this can certainly be challenging because the acquired company leaders often have little say when it comes to which provider wins out.

I'd suggest partnering with your customer to gain access to the key metrics of the acquiring company compared to what you do for the acquired company. If your customers metrics are better, build a business case for how you can do the same for the acquiring company. Try to include a cost comparison as well. It's likely your competitors costs are higher and they're delivering lower results.