What is the Number One Moment of Truth in an Acquisition Integration?
By: Charlie Dino – President, GM
The acquisition has been signed, all employees informed, excitement is in the air, and the team asks themselves: “How do we measure success?”
While there are many objective ways to measure success, any financial metric for example, there is one tried and true measure of a seamless transition in an acquisition integration. You might think it’s the first time a new service is delivered to a customer under the new branding. Now while establishing name recognition needs to be an initiative in the integration planning, it is not a critical moment for your new and existing customers.
The number one moment of truth in the acquisition integration is the first invoice the customer receives from the acquiring business entity. The customer expects this invoice to be accurate, priced correctly, and explained.
The way to ensure that this objective is executed flawlessly is to conduct a diligent data validation, data mapping, and testing of the invoice information coming from the acquiring company’s billing system prior to initial release. It might even be advisable to revise the new invoice format to ensure it is easy to understand. You could even add explanations on the invoice via an attachment to the invoice, a URL to click and follow while reviewing the invoice, or have the sales person deliver the first invoice. However, you decide to deliver the first invoice, it is critical to your acquisition integration success that the customer feels like a priority and understands the information.
You might be asking yourself at this point, “aren’t the synergy targets, EBITDA, and financial drivers the most critical measures of an acquisition integration?” While they are the long-term metrics for the acquisition, they are lagging indicators. If you don’t keep your existing and new clients happy then it will lead to revenue erosion, which will make the synergy, EBITDA, and financial targets much less desirable.
So, while all aspects of an acquisition integration are important, the MOST important early initiative is to ensure that the first invoice exceeds the customer expectations.