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“Hi, Troy,” the email began. “I’ve just purchased [the name of the company that does my web work], and I just wanted to introduce myself.” This type of email, starting with this type of sentence, strikes fear into many customers’ hearts. The company that handles a critical service — one you depend on daily — has just changed hands. What’s going to happen now? Are they going to raise prices? Cut my service? Screw up my world?

I’ve been through numerous company takeovers, and even sales territory takeovers, and it’s always a turbulent time, both for the service providers and for the customers. What always amazes me is the level of unforced errors — moments where the company doing the buyout has an opportunity to smooth the transition, but for whatever reason, chooses not to do so.

Here’s my maxim: Comfortable Customers Buy. When you’re making a transition of ownership or salesperson, the thing your customers want most is a sense of comfort — that a steady, smart hand is on the rudder of your company and that you’re going to continue to take care of them.

Your enemy here is FEAR. The customer’s fear that they need to make a move. The fear that their apple cart will be overturned. And the employees’ fear of losing their jobs. All of these fears are in play during a transition of this type, and these fears can cost you big money. Would it surprise you to know that in many company takeovers, particularly in the small-to-medium sized business space that makes up most of this readership, as much as 50 percent of the book of business being taken over can go away in a year or less?

That’s exactly what I experienced during one takeover years ago. To set the stage, I was the new sales manager for a managed-service provider in Kansas. We had bought out a smaller competitor whose owner had decided it was time for retirement. So far, so good.  We had a strategy meeting to discuss the takeover and how to do it. We knew that, for the standards of our industry, the customer wasn’t receiving great service. Their product quality wasn’t up to our standards, their route drivers and trucks weren’t as well-polished as ours, the service training wasn’t up to snuff. The sales department was nonexistent — but the previous owner was willing to stay on for six months to help in the transition.

Some within my company felt that we should go full-bore on rebranding the new operation and absorbing it into our company. Get the drivers in our uniforms, paint or replace the trucks, give them as much “us” as humanly possible, with the route drivers (remember they weren’t well trained) as our main ambassadors, and let them revel in the glories of our company.

I was the contrarian. I said to change as little as possible early on. Same drivers, same uniforms (keep in mind, in buying the company, we’d bought the rights to their name, logo, etc.), even the same billing address. Assume that the customers were happy; many had a personal relationship with the owner of the company, and the company had low customer churn.  Make investments in our product and service quality behind the scenes, so they could see that their service was taking an uptick. After a month or two of this, let the former owner meet with the customers individually — with our service manager in tow — to explain the changeover and shepherd the transition.

I lost. We rebranded as quickly as possible, with the route drivers (in their sparkling new uniforms) explaining the buyout in their own words.

And WE lost.  Nearly 50 percent of the customers left in the first year. The way we did it sparked fear in the customer base and they bailed.

I can’t fault them; I’ve bailed too. I scheduled a meeting with the new owners of my web provider (they were local to me). In the meeting, it became obvious that they hadn’t even looked at the very website they were hosting for me, and cared little about my business. Fear sparked, I looked for and found other options. I’m guessing I’m far from the only one.

I’ve told you these two long stories for a very good reason. There seems to be a ‘standard’ way to handle transitions in ownership or salespeople, and they universally spark fear and make you easy prey for your competition. Since the pace of consolidation in this industry won’t be likely to change — to say nothing of sales turnover — here are some guidelines for handling this transition.

  1. Assume the customers are happy until you know otherwise. Too many transitions are based on ego; on the idea that ‘we’re so much better than they’ve had.’ Maybe that’s true, but you will have to prove it to the existing customer base.
  2. Keep the transition gradual, and have as much of the ‘old’ interspersed with the ‘new’ as possible. If the former owner or managers can assist, let them; in the case of a sales transition, have the sales manager on board for the calls from the new person.
  3. Respect the old while introducing the new. One of the biggest unforced errors is when the new people put down the old people, without knowing what the relationship was. 
  4. Keep the customers CLOSE, at sales, service, and management level. Overpay them attention. Customers are less likely to have fears and look for new vendors if they’re being communicated with, openly and honestly.
  5. Do NOT go for a quick upsell; make sure your relationship is strong and the customer is mentally bonded to your company before trying to raise their level of business.
Troy Harrison
Author, Speaker, Consultant and Sales Navigator

Do these guidelines mean that you won’t have fear on the part of your customers? Probably not — but those guidelines will help you alleviate the fear and keep your customers comfortable as soon and as well as possible — and then you won’t lose a substantial portion of the business you just paid for.

Troy Harrison is the author of “Sell Like You Mean It!”, “The Pocket Sales Manager,” and a Speaker, Consultant, and Sales Navigator. He helps companies build more profitable and productive sales forces. To schedule a free 45-minute Sales Strategy Review, call 913-645-3603 or e-mail Troy@TroyHarrison.com.

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