While mergers and acquisitions are designed to grow market share, they typically come at a price in disruption and downsizing.
M&A deal activity in the industrial manufacturing sector is expected to continue strong into 2022, and manufacturers need to be prepared to deal with the aftermath. When another manufacturing company merges with yours, or when your company buys a competitor, you can expect plenty of uncertainty among your team. And rightly so: They’re worried about what all these changes will mean to them.
Here are some tips on managing your manufacturing sales team through a merger or acquisition.
1. Communicate Clearly at the Right Time
Mergers and acquisitions by their very nature are confidential affairs that involve the top levels of company management working for some time in secrecy. Workers who operate outside of the c-suite are typically not the first to know when an M&A deal is in the works.
Once announced, they’ll want to know if their jobs are safe, and they might think the worst if they’re not informed. Your role as a sales manager is to keep your sales team in the loop. So, you’ll want to reassure them with some transparency: Tell them what is going on, why the merger or acquisition happened and when they’ll learn more.
2. Conquer Uncertainty
Mergers and acquisitions are times of great uncertainty, both for company leadership and for company sales teams. Mergers and acquisitions are also a process. Between the deal being announced and the process being completed, there is plenty of time for uncertainty to creep in.
When the deal is inked, nothing has really changed, but people start wondering about their roles and their duties. Are they still responsible for the same tasks? Are new directives coming their way?
As the sales manager, you must conquer this uncertainty by communicating your expectations during the transition. Whatever you expect from your sellers, continue to flow that information down to your team. If they should be reaching the same accounts with the same frequency, make sure they know that.
If there are changes (a new division is being merged in and they don’t need to cover a certain set of accounts anymore, for instance, or they are now responsible for selling a subset of products), then let your team know as soon as possible. Communicate expectations clearly and often during this time of uncertainty.
3. Determine Who Owns the Customer Relationship
Mergers and acquisitions typically create duplicates. Two companies merge and there are suddenly two of everyone. This means that you as the sales manager are likely going to have to consolidate some roles, while balancing two imperatives:
- On the one hand, you want to keep the reps you have because they have established and fruitful relationships with your customers, and you need to be careful not to break these bonds.
- But on the other hand, your merger or acquisition is likely bringing needed expertise on board, and you don’t want to turn any of that expertise away. For example, if Company A has a certain set of products and they want to buy Company B because it manufactures a technical subset of these products, then Company A will want to keep Company B’s salespeople because they are one of the biggest reasons for the acquisition.
Remember that acquisitions most commonly happen either to eliminate a competitor or to gain expertise and product lines that were not available previously. So, when your company is not swallowing up a competitor, but is looking to obtain a tangential product line, you should try to keep as many people on the sales team as you can.
4. Consider a Hybrid Sales Model
If you use a direct sales team, and if the company you are merging with or acquiring uses an Industrial Manufacturers’ Representative (IMR), your new sales model doesn’t have to be either/or: You can adopt a hybrid sales model.
With a hybrid approach, you have your own direct sales team, while augmenting some of your sales with an IMR.
For instance, you could divide your accounts by type, geography, or target market. Whichever way you decide to divvy them up, you should always keep in mind where the best relationship is. If one of your high-performing direct salespeople has a great relationship with an account, you probably don’t want to mess with it. Same goes for an IMR, if they have a long-standing relationship with a particular distributor, then you should allow them to continue working with that account to see the best results.
5. Evaluate Before You Eliminate
One blunder to avoid when working through a merger or acquisition is assuming that you already know the strengths and weaknesses of every seller who has been added to your team. You may also think you know how loyal these sellers are going to be to their new employer.
Take your time to get to know each new team member. Before you give anyone a pink slip, give them a chance. And before you make any assumptions about competence or loyalty, ask.
For example, say you have a seller on your team who knows cutting tools well and understands all there is to know about speeds and feeds. During a merger, you acquire a seller from another company. It might be easy to dismiss them…until you discover they know work-holding and setup well, and could really complement your existing team’s knowledge.
So, don’t be in a hurry to prune your team. First, get to know each new seller. You might discover some expertise your team has been desperately needing.
Guide Your Manufacturing Sales Team Through M&As – the Right Way
Mergers and acquisitions can be times of great optimism and great uncertainty, of great excitement and of great worry, of addition and of subtraction.
The key to enduring a merger or acquisition is to manage what you can. As the sales manager, communicate well and often, but do not overload sales reps with irrelevant details. Conquer uncertainty by communicating your expectations. Determine who owns the customer relationship. Consider adopting a hybrid sales model. And, before you eliminate anyone, evaluate everyone.
Learn more about today’s industry trends by reading our white paper: How to Profit from Shifting Industrial Manufacturing Sales Trends.
