Keeping Customers First in Merger Integration [Archive.org URL]

When companies merge, they embark on seemingly minor changes that can make a big difference to customers, causing even the most loyal to reevaluate their relationship with the company. Numerous studies have found that more than half of all mergers fail to deliver the intended improvement in shareholder value. Customer defections contribute to that high failure rate. Integration decisions come with an inherent tradeoff: If you are making changes in your operations, particularly changes that benefit your bottom line at the expense of your customers, you can expect to pay a price in the top line. The trouble is, companies tend to focus on quickly reducing costs and worry mostly about the biggest things that can go wrong, such as major technology disasters, rather than long-term customer attrition. In our work with companies in a range of industries, we identified five key initiatives that can improve customer retention in a merger.

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