One of the main drivers for mergers and acquisitions (M&A) is to gain economies of scale, putting more transactions through a fixed cost base. Prime targets for this are back-office functions such as finance, human resources, operations, and IT. Depending on the size of the organization, several, if not all, of those functions will have service centers helping employees with their inquiries, from changing passwords to updating their banking information. They’ll also have customer-facing centers answering questions about the merger.
Industry benchmarks suggest calls to the service desk can range anywhere from $2.70 to $5.60, including direct labor, indirect labor, and operational expenses. For more specialized services and application support, the costs can rise dramatically from there. Unsurprisingly, any M&A integration plan will have customer service desk integration high on the list of priorities.
By definition, service desks are on the front lines with staff and customers. During M&A, these groups will be sensitive to any variance in service levels. If wait times increase or customers are bounced around as they get their questions answered, it won’t take long for them to sour on the deal. That can lead to staff and customer churn, eroding the very logic of the agreement.
Customer service integration is critical to M&A success. However, according to Harvard Business Review, “when companies merge, customer experience is often overlooked.” Clearly, the due diligence process isn’t going to gain the information needed to plan out the integration. However, as part of our Advisory Services consulting work with organizations post-merger to implement ServiceNow, we’ve gained valuable insights into how to make this process a success. And it starts before we even walk through the (virtual) door.
Clothes retailers Abercrombie & Fitch, H&M, and Zara all provide similar product categories, but each has a vastly different customer experience and culture. The first step in service center integration starts with the people. What do we call our staff? Are they crew, associates, ambassadors, representatives, or another variation? What do we call our customers? Are they guests, members, clients, or shoppers? It’s clear that if we aren’t aligned about what we call ourselves or our customers, everything downstream will be disjointed. It’s up to management teams to create this alignment and shared vision. Once we know the CX we want to deliver, we can think about the soft skills our team will need to deliver it – those could be very different from the ones either firm currently has.
Sometimes Acorio is brought in to implement a shared service desk model, and it soon becomes apparent that the first step is not discussing customer service strategy, but the entire customer experience itself. People alignment is the foundation for a strong integration.
Let’s be honest; most companies have data debt. Before integrating the customer service team, it’s essential to eliminate that debt. The customer data must be up to date, complete and consolidated before it can be integrated and matched with the customer data of the partner. It sounds simple, but many organizations don’t know who their customers are, or at least not in a holistic way – it’s spread across multiple systems of record. That’s why there’s an entire software category – customer data management – aimed at solving just that so the organization can know who its customers are. M&A is a good time to get that house in order.
This is where the people alignment stage starts to pay off. For instance, the customer database must have field names that reflect how we refer to the customers. You’ll need to integrate those fields. Does one company use first names in their customer interactions while the other is more formal with honorifics? Has that information been captured, and if not, what is the data enrichment approach?
I remember one developer who insisted that customer names should be capitalized. It was just his personal preference. This is a simple data transformation, but we were catching customer touchpoints that were effectively shouting at our customers in all caps for years after. The point is that even seemingly small data decisions can cause unintended consequences for customer support teams.
There are two elements to this – the first is the flow of apps that customer service teams are expected to use. The merger is an excellent time to reassess those and integrate or replace them. That’s a large part of our ServiceNow ITSM work.
The second is to look at the applications that the organization uses that the CS team must support. A service agent can typically support 4-5 applications, so it follows that the more systems there are, the more complex the support organization will become. Each application will need an up-to-date knowledge base, scripts, training documents, and a customer portal. Remember that old apps will have a smaller pool of agents with the experience to service requests. After all, no one is learning to support mainframe systems these days. If the goal of the merger is to access economies of scale, that will only come from the rationalization of the applications the organization uses.
Customer service is the lens through which customers will judge the organization post-merger. In many cases, it’s their only interaction with the company. Equally important, employees will have questions about the changes that must be handled effectively to retain talent. Success here lies in aligning people so the organizations have a shared vision for their customers and the experience they wish to provide. That’s a change management process that must precede the alignment of data to create a single view of the customer and the broader proposition the joined organizations provide. Only then can the important task of application alignment take place as the business decides how to provide that customer experience. Once those three steps are completed, the customer service team can build the strategy, processes, and materials to support the experience.
M&A is an excellent opportunity to uplevel support at a time when customers are hypersensitive to change. When handled well, it can deliver against the economies of scale objectives for the deal. The stakes are never higher, so if you’d like a partner to guide you through the process, please reach out to us.