This series is inspired by all of the terrible mergers and acquisitions of consulting partners I have seen over the course of my association with Salesforce — both as an employee and a business consultant to Salesforce partners. I am sharing this because it pains me to see good companies have their resources squandered and the balance of what they built destroyed post-acquisition. Also because it makes absolutely no sense to buy a partner, and then see the whole investment you’ve made unravel. And, also, because it continues to blow my mind that this happens. ALL. THE. TIME.
Sure, some partners are acquired purely to create a practice where none existed before. Other consulting firms sell because the founders are ready to do something else, like start a new company, or watch the grass grow. While everyone has their own reasons, and price, many founders hope the firm they built will grow. They hope their employees will prosper and have better opportunities with a sale or merger, and that an investment or sell-off will take their company to the next level. So many times this is just not the case. We’ll delve into some of the obvious mistakes. I’d love to hear what you see as mistakes or the challenges you are facing as well. Feel free to drop me a line on social or email.
Here are the top ways I have seen companies starve, kill off, or generally screw up a services merger or acquisition due to mistakes on the sales side:
Sales mistake #1 - Allowing your sellers to perceive the new practice as a competitor
Maybe you have competitive products or services. Maybe your team just THINKS you do. Either way, account teams that are wary of losing to large technology providers like Salesforce or AWS won’t open the door to co-sell with them. Leadership that doesn’t address this head-on will not see many sales as a result.
Pro Tip: Think about ways to position the new services as a value-add rather than a takeaway. If your sellers can see the larger contract value (and sales comp plan changes noted below) as a perk rather than a penalty, they will be more inclined to co-sell.
Sales mistake #2 - Thinking you don’t need to change sales comp plans
Chances are you want your existing customers to buy these new technology services from you and not someone else. For this to actually happen, you need to incentivize your account teams to bring your acquired service sellers into their accounts. Just adding the ability to sell this new service is not an incentive. Even having it retire quota at a higher rate or at a better margin typically won’t do it - especially if your teams are used to selling larger contracts.
Pro Tip: The best way to incentivize your account owners is to assign specific quota for your new service line. This will help demonstrate the value of adding these services to a contract.
Sales mistake #3 - Not doing joint account planning
Which accounts are you hoping to convert to your services? How are you deciding which accounts to use as proving grounds for selling new services? It’s critical to identify these milestones at the onset.
Pro Tip: If you don’t get teams to collaborate on these decisions - and incentivize the behavior - joint account planning is not going to happen.
Sales mistake #4 - Failing to market to your existing customers
If your customers don’t know you have these new services, they won’t buy them from you. This means you need to lean on the expertise and experience of your acquired practice.
Pro Tip: Get your marketing and sales teams excited. Prioritize your marketing spend and resources on the new practice and think about ways to let your customers know the benefits and value of adding these new services to the portfolio of solutions you provide to them.
Sales mistake #5 - Not cross-selling into existing accounts
Siloed teams are nothing new (more on this later), but it boggles the mind to see how poorly companies manage to cross-sell. You must incentivize this behavior. I had a customer with two successful practices - AWS and Salesforce. There was no reason they couldn’t leverage each other, except that company leadership kept the sellers and account managers siloed. This undoubtedly cost them business in the long run.
Pro Tip: Understand your customer, and their unique needs. Then think about ways to package and promote new services that will help further solve their business challenges.
Are you an MSP, digital agency or other services firm thinking about buying a technology practice or have you purchased one already? Let’s connect. I can help you work through the above pitfalls and optimize your sales efforts so you have a greater chance of success with a private equity/advisory package.