Mergers are very hard to do successfully

I understand, havinglived through an unsuccessful merger.

 

Background There were two express freight companies to be merged, one predominantly “Road Express”, and the other ”Air Express”. Both offered a Road and Air Express service. In the last 3 years  since the merge, the predominantly Road Express Company with over 30,000 customershas lost 33% of its sales revenue with an “ enormous” reduction of its former profitability.  The Road Express company was previously by far the most the profitable of the two.  To me, it seemed the most important component  was the financial part…   “how can we merge these two companies in similar markets with similar functions and customers into one company, eliminate duplication of processes, motivate the staff and make the single entity more profitable”. 

 

Even though they appointed  a large consulting company to do the reviews, the merger did not go smoothly at all, and the financial result was predictably very bad. The areas set out below should have been more thoroughly  reviewed and managed a lot better.

 

 

 

Culture

New Management

Customer Service

IT and CRM systems

Customer Satisfaction – Net Promoter Score (NPS)

Change Management

 

 

 

Culture

They did not look at the culture, as it was not seen as important.  The culture at The Road Express company was always “ the customer comes first”, and it was thoroughly understood by all employees, actively driven by the previous owner. It was critical to the success of the company and why it was purchased for over $700 Million.  The culture at the Air Express company was totally different. They had basically a monopoly on the Air Express business so they did not feel the need to put first priority into Customer Service.

 

 

New Management

Merging two companies means that a new management team needs to be selected, and one would normally expect that the selections would be based on individual strengths from within or outside the two companies. What in fact happened was that the most senior appointments were filled from the less profitable and least successful Air Express company.

CEO – Brought in a new one who was not a good leader and not customer service focussed (recently departed).

Customer Service Director – They did not see this as an important role, and the position was eliminated.

Sales and Marketing Director = ( previously a separate function to the Customer Service Director). Brought in a new one  who  unfortunately  had never used a CRM system and did not understand nor take any interest in CRM as a process or opportunity.

Operations Director – Made the Road Express Director redundant and replaced with the Air Express Sales Manager (since departed ).

Financial Director – Brought in a new one with no Road Express experience.

IT Director – Selected the Air Express Manager to be responsible for this area.

Marketing Manager – Road Express Manager made redundant and  the Air Express Manager was given this responsibility.

National CRM Manager – They did not see this as an important role, and the position was eliminated.

 

In summary most of the senior positions  went to the Air Express staff. Overall they replaced all the very experienced Road Express management who helped create the successful Customer Service culture, with management who did not care about or  understand the critical  importance of Customer Service. The previous Road Company motto of “Service First – Cost second” ( i.e.” worry about the cost tomorrow with good smart management” ), was formally replaced by “ Cost First – Service Second “.. . a total disaster in an express environment where intact /on – time service was critical.

 

Customer Service

The Road Express company had a Call Centre system for Customer Service and dedicated Account Managers to look after all Accounts. A customer had to spend a minimum $1500 dollars per month to become a viable and profitable Account Customer because of high infrastructure and other operating costs.  Account Managers had to visit their accounts regularly depending on their monthly spend. There was a weekly  action oriented Potential Lost Customer reporting system in place. Operations tracked their Service failures to deliver  intact/on-time on a daily and weekly basis. Everyone was focussed on trying to improve customer service.  The Air freight company did not have a dedicated Call Centre system, anyone could become a customer,  did not have dedicated Account Managers, so the Sales person who sold the service also looked after the same customer. No regular call cycle, no potential lost customer system, no failure to deliver intact/on-time system or reporting. Customer Service was not important.  When marketing did a survey of Customers to decide what the new merged company should be called, by far the majority of customers replied requesting to use the Road Express company name due to the better Customer Service record.

 

IT and CRM systems

This was and still is  a major issue.   Both companies had systems for different departments creating silos of information. The Road Express company was the first freight company in Australia to use a Bar-coded Track and Trace system for its parcels in Australia based on Main Frame technology.  Accounting and Credit were also on this system.  The Air Freight company used PeopleSoft for their Tracking, Accounting and Credit. The IT management was faced with the problem of how to merge all this into one system.  To my knowledge this has not been achieved, yet  it is a massive job.  A lot of projects were planned. I am told not many have been completed.

 

CRM systems -  The Road Express company had implemented a successful CRM system since 2002, which had been developed and used successfully over 10 years. It started with the Sales Team and then moved to a range of different departments including Account Management, Internal Sales (Satchel Sales), Risk Warranty (Parcel Insurance) and Credit.   Automated processes were developed for all these departments and user uptake was fantastic due to support from Senior Management.

The Air Freight company  only had a CRM system for 1 year and the user uptake  was not good at all due to little or no support from Senior Management.

The choice the merger team made was for the Road Express CRM system, even though the competition was SalesForce.  Within 6 months all the Air Express customer data was merged into the Road Express system and initial training had been completed, but due to little or no support from Management field user uptake was not good.  It was the first system to have both companies Customer information on one system but the Air Express data quality was not very good due to the limited use of SalesForce by its users and absence of Management interest and support.

 

The main functionality of a CRM system is Sales and Support.  In the Road Express company the Sales side had been implemented well and all reports including forecasts and successful sales were extracted from the system. This was done through and by complete support from the Sales Director.  The Air Express company had just started using SalesForce for a year but had not been successful as some managers were still using Excel to gather their Sales Closed and Forecasts because of inadequate management support.

A CRM system can be used by a lot of different departments especially those that deal directly with customers which was why it was introduced to Account Management, Parcel Insurance, Credit and Internal Sales. Automated processes for these departments; were added to the system to make it easier and quicker for them to do their job and so they could easily see other departments interaction with a customer or prospect. I am not going to go in depth into these processes, but I will give you a highlight of  a couple:

1.      Internal Sales – Satchel Sales.  This was originally a complete paper-based system that was reactive when a customer phoned.  The order was written into an order book that had 3 copies – a customer copy, a shipping copy and a billing copy. This was turned this into an automated process so that the Invoice etc was created and recorded in the CRM system and any user who looked up an account could see what type of Satchel was purchased and the quantity.  This turned around the function of the team from reactive to proactive.  The Satchel sales staff would pre- call customers based on their usual order cycle.  So if a customer used to call every week, fortnight, monthly, etc to order they now received a call from the Satchel Sales team instead. Reminders were scheduled in the CRM system. This helped increase Satchel Sales from $16 to $30 million in less than 5 years.

2.      Account Management – Potential Lost Customer Report  was an excel report created weekly based on a manual report created by Account Managers. This was  turned this into an automated action plan report based on a process that was created in the CRM system. Call Frequency Report was another Excel report based on Account Managers manual reporting. This was turned this into an automated report based on completing activities in the CRM system.

NPS

In early 2010 I was investigating CRM strategy and came across Customer Experience Strategy and NPS ( Net Promoter Score). Unfortunately this was around the time that reviews were being done on both companies. I created a presentation for senior management and a cost justification for the project.   This was well received by the Road Express Management but they were not allowed to make any decisions while the review was being performed.  Therefore I built an NPS 3 question survey using our existing email marketing system. I sent out a test to a targeted audience of 1400 contacts at 180 customers and received  a 35% response rate.  All responses were automatically recorded in our CRM system under the contacts name. In the same survey they were asked what department needed to be more responsive and improved.  The merge went through and I presented these findings to management, so we could do a full customer NPS survey.  It was rejected and they decided to do the normal ANOP annual survey that they did at the Air Express company. In the Air Express company nothing was done about the survey results.  As most people know Customer Feedback and NPS have now become the standard for most corporations around the world. If the original owner had been still  in charge he would have really liked NPS and would have used it to improve Customer Service.

 

Change Management

After the merger was completed, I had to get all the data out of SalesForce and merge it with the Road Express CRM.  I also had to organise who would be managing what Accounts and train 150 Air Freight staff who would be using it.  This was a big change with hardly any Change Management processes. Unlike the Road Express the uptake was not successful  because there was little senior management support and explaining why the Air Express staff had to use it. It seems to me that this was the reason that they had not been successful with the original rollout of SalesForce at the Air Freight company as Senior Management were still using Excel reports instead of reports generated from their CRM system.

 

 Conclusion

Be careful about your senior management selection and make sure that know about the technology that they are going to be in charge of.  Technology has become a major change agent in the world. Make sure that Customer Service has got top priority as it is the major differential between competitors.  The major reason for its failure was because of the determination to  limit costs and Senior Management particularly the Sales and Marketing Director had little or no knowledge about how the CRM system had helped the past success of the Road Express organisation, or how it could help the future success of the new organisation.  In addition I was pushing for a Customer Experience strategy to be implemented, and unfortunately  someone saw this as being not in their best personal interest so the easiest thing to do was to make me redundant ! They made this clear by getting me to cancel my Customer Experience presentation to the Financial Director and to not arrange another one. No wonder the new merged organisation has not succeeded !  The new company now competes on price alone!

 

Why have I written this blog ?  It  is because I have been recently diagnosed with MSA, a disease that might soon stop me from being able to walk, write or normal things, so I thought that I would have my say in case I could not at some time in the future.   Like most of the Road Express senior management I was made redundant after 10 years of implementing and managing the CRM system with the full backing and support of the previous 100% owner, who  built it up over 30 years  into the most successful (and profitable) Express  Freight Company in Australia. 

 

 

Regards

 

Nick Daly

Current Product Centric World Vs New Customer Centric World

During my time trying to set up my new business for improving Customer Experience I have found that a lot of SMBs are Product Centric and don’t really think much of Customer Feedback or opinions and the customer Interaction they deliver.

 

Product Centric World

 

These are these some of KPIS that help them run their business

 

  1. Sales per week – income.
  2. Accounts paid
  3. Accounts Not Paid
  4. Products Sold
  5. Inventory Management
  6. Product Marketing
  7. Web Site visits
  8. Actual Vs Budget

 

 

These are some of the statements of how they see their business going = How healthy is their business

 

  1. They are doing a good job
  2. The business is growing slowly
  3. Securing some new business but it is hard work by the sales team
  4. Ecommerce is hard -  keeps changing
  5. Lots of competition but seemed to be beating them
  6. Occasionally get referral business
  7. We are reviewing our Website
  8. We don’t get many Complaints
  9. We have some good Testimonials on our web site but they are a bit old
  10. We would like to improve our SEO Search results
  11. Marketing does an OK job of getting Prospects
  12. Sales does an OK job of getting new business
  13. What to do about The Internet is a worry
  14. Overseas Websites offer cheaper prices
  15. Price is a major differentiator
  16. Only get verbal feedback no written Feedback
  17. Have to work hard to get testimonials

 

These are these some of the questions that they have problems answering

 

  1. How many Customers have you lost  in the last month, 6 months, Last Year?
  2. How many Customers have visited your Web Site and not purchased or made an inquiry?
  3. How satisfied are your Customers ? Did they have a Good Interaction Experience?
  4. What are your customer Touchpoints? What are the Customer Experiences at each of these?
  5. Do you deliver on your Customers Expectations ?
  6. What is your Website conversion rate?
  7. How many customers have only purchased once – that is, not repurchased?
  8. Do you know why they did not come back?
  9. How many of your customers are giving you referrals?
  10. Do you know why?
  11. How many of your Customers are having a great Memorable Experience?
  12. Do they talk about their experience to their friends and associates?

 

 

New Customer Centric World

 

These are these some of KPIS that help them run their business

 

  1. Net Promoter Score – Customer Satisfaction reports
  2. Customer Feedback results
  3. Customer Problems List
  4. Customer Issues fixed – Customers Saved
  5. Referrals report
  6. Employee Customer Interaction report – best and worst
  7. Web Site Conversion report
  8. Sales per week – income.
  9. Accounts paid
  10. Accounts Not Paid
  11. Products Sold
  12. Product Maketing
  13. Web Site visits
  14. Actual Vs Budget

 

These are some of the goals that they are trying to achieve

 

  1. Improve their Customers Experiences at all Touchpoints
  2. Find out what their Customers like about their Business – so they can focus on them
  3. Find out what their customers don’t like = so they can fix them
  4. Send out short survey email after every Transaction to make sure our customers are happy
  5. Get good reviews on their Website = so visitors can see what it is like to be customer
  6. Get good reviews on their Website so they can improve their SEO
  7. Get good reviews on their Website so they can improve their Website conversion rate
  8. Get good reviews on their Website  so they can differentiate their business from their competitors
  9. Customers Service to become a Revenue creator and not just a need
  10. Grow their business by creating a Brand that delivers on their promise

 

Why is this change happening?

 

  1. The Internet
  2. Mobile Smart Phones
  3. Social Media

 

The Internet and Mobile Smart Phones has made everything more accessible to Customers. This means they can be heard.  If they are unhappy about something then they can tell everyone who is on FaceBook or Twitter or Product and Service review sites such as

Trip Advisor http://www.tripadvisor.com.au/

 Product Reviews http://www.productreview.com.au/

 Word OF Mouth http://www.womo.com.au/

TrueLocal  http://www.truelocal.com.au/cms/ratings-reviews/

 

These sites are becoming very important because they make money out of publishing Reviews of Customer Business Interactions.    Companies cannot afford bad reviews as it can do enormous damage to their Brand.

 

People trust reviews so they believe they will have a similar experience. So it is very important to get good reviews. It is very similar to positive Word of Mouth even though they do not know the people who have entered the reviews.  

 

 

How Do I know that this change is happening?

 

Research – I have been researching Customer Experience for the last 3 years via the Internet. It started off by reading a book called Customer Experience Strategy by Lior Arussy which really got me interested.

 

 

During my research I have become a member of the following:

1to1 Media by Peppers and Rogers, http://www.1to1media.com/

 

Customer Experience Matters – http://experiencematters.wordpress.com/

by Bruce Temkin  - The Temkin Group is widely recognized as a leading customer experience research and consulting firm. Many of the world’s largest brands rely on its insights and advice to steer their transformational journeys.

Membership of Customer Experience and NPS Groups on LinkedIn

Customer Experience on YouTube http://www.youtube.com/results?search_query=customer+experience+management&oq=customer+experience&gs_l=youtube.1.1.0l10.3050.12124.0.15745.19.9.0.10.10.0.223.1763.1j0j8.9.0…0.0…1ac.1.11.youtube.WrxSK26oyc0

 

 

.So I predict that in the future 2 or 3 years, almost every Website will have Customer Reviews on their website as this helps a company build trust, it shows how they have treated their current customers so prospects can make an easy decision to purchase a product of service. It helps build trust.

 

If you would like to find how you can add this element of trust to your site and see how CustomerSure works please go to my web page.

The Benefits To Your Company Of Customer Feedback

How do you get it ? By asking your customers to complete a very short simple 3 or 4 question email survey. Ask what customers want to answer: Make it about them, not you. We give you lots of sample questions to get started on the right track. One of the key rating questions is NPS (Net Promoter Score) “How likely is it that you would recommend us to a friend or colleague”? They get to choose from 0 to 10. One of the key text questions is “To help us improve please give a reason for your scores”.

How will their answers help your company? The rating answers will tell you how satisfied your customers are and what sort of experience they had. The reason answers tells you why your company got those scores and what you need fix (if bad) and what to do, to make that customer a repeat purchaser. There answers tell you if your customers are having a good experience or not.

How can your Company use these answers ? If you choose to you can publish them on your website as reviews. Prospects love reviews as they are better then testimonials, they cover both good and not so good service which allows prospects to see how you currently look after customers, thereby helping a prospect make a positive decision to purchase from you. It helps you win new business either via visitors to your website or by Sales staff recommending their prospects to your Customer Feedback reviews.

How does it help improve your Customer Service? Staff can easily see what a customer thinks of a recent interaction and are happy with great results and unhappy with bad results. They get to see what they need to do to get great results all the time. Customer feedback is a great motivational tool as staff do not want to get bad reviews.

How does outstanding Customer Service help your Company ? If a customer has a great experience dealing with your company they are going to refer friends and associates. Referrals are the easiest new business to get and therefore increases sales. It helps build your Brand

Please visit my website for pricing and to organise a 14 day free evaluation.

Customer Experience and your Website

Do you know what sort of experience your customers have when they use your Website?  Was it good ?

Have you asked them?

What sort of experience did they have after the order was placed? Did they receive everything?

Where they satisfied ? Where they happy?

Have you asked them?

 

Large Corporations around the world have realised, it is not what you sell, but the experience that your customers have during the interaction, that counts.  If a customer has a great experience, they will give you repeat business and refer friends and colleagues to your website.

 

In Australia Appliances Online  won the Best Customer Experience and Best Site Design and Optimisation at the Online Retail Industry Awards 2011. Established in 2005 by John Winning, Appliances Online is a family-run business based in Sydney, Australia.The company was founded as an online competitor to other electrical and white goods retailers, with a specific commitment to quality customer service. The business model is based on targeting customer who are limited on time and, in most cases, have a replacement need.

It has grown in profit and revenue by 100 per cent every year since 2005. In 2011, the average sale item on Appliances Online was $1000.[3]

Appliance Online’s Website builds an expectation and their feedback says they deliver on it this is the link to their feedback

http://www.feefo.com/reviews/Appliances-Online/?internal=true&id=6046

Does your website build an expectation like theirs ?

For more information on Customer Experience please  do a Google search.

To see how CustomerSure software can help you build this Customer Feedback trust for your company click on my website and we can organise a demonstration.

Please click on any of the links below to see how these customers in the UK are benefiting from using CustomerSure to build trust and deliver on expectations by displaying their customers feedback.

Apple Accessories

https://icollection.customersure.com/en/reviews

Fashion

https://more-t.customersure.com/en/reviews

https://getbusy.customersure.com/en/reviews

Jewellery

https://rocksjewellers.customersure.com/en/reviews

Recruitment

https://exclusivehr.customersure.com/en/feedback

IT Services

https://transcendit.customersure.com/en/customer_services

Lights

www.beaconlamps.com (shows the feedback button)

Dentists www.smile20.co.uk (shows the ratings widget at the bottom of their opening page) www.ewanbramley.com (they’ve designed their own Customer Service tab – see attached screenshot)

Why do you have a Website?

The Internet or Digital age has changed a lot of things, same goes for  business, no matter what your company does or your audience, you need a website

 

Are these some of the reasons?

 

  1.   It has replaced Yellow Pages so that people can easily find you or your products
  2.  An information portal, a place where people can gather information on your product  or service
  3.  An additional marketing resource so that you can explain how great your products or services are
  4. A ecommerce site so that prospects can easily purchase your products
  5. A place where you can start building relationships with your customers and prospects, as people only buy off someone they trust.

 

When websites where first built, they were usually flat pages with some marketing content. How they have changed = there are now so many companies that build and supply ecommerce and information websites, to your exact needs, that you can add whatever content you like.  Content is still the key though. But how do you convince a visiting prospect to trust you? A lot of businesses put up a list of their current customers and/or testimonials.  This has worked for a while but a lot of people now start to wonder, did the person mentioned in the testimonial, actually write it or was it written by someone in the company’s marketing department.  Some testimonials stay on a company’s web site for years without being updated or changed. This is where Social Media has come into play, people who have a bad experience with a company can now tell the world about it.   Social Media has made large corporations realise that they must make sure that all their customers have a good experience during any interaction or face the fact that their brand could be bad mouthed on FaceBook, YouTube or Twitter. This has led to the movement that is sweeping the corporate world called Customer Experience Management. It has been very beneficial for companies that have become customer focused and has led to companies differentiating themselves based on the experience that they deliver to customers; not on the products or services they sell.

 

One of the key Customer Experience elements is Voice of the Customer or Customer Feedback where the customer is asked to comment on their experience they have had during their last interaction. This is usually done by a short survey. When companies get the answers they can then find out the bad experiences that their customers are having and fix them, so they don’t happen again.  The good experiences are used to make sure all employees know what they have to do to make sure all their customers have a good experience at every interaction.

 

A Customer’s experience is now starting to change how a company’s website can be trusted. They are called reviews and there are companies that have created a whole new business based on reviews. A great example of this is Trip Advisor, where people who are planning a trip, can find Hotels and Restaurants in the city that they are planning to visit.  At any of these Hotels or Restaurants, they can read reviews by people who have been there and experienced the services offered by them. A lot of people are using Trip Advisor and book Hotels and Restaurants based on these reviews.  They trust these reviews so they believe they will have a similar experience. It is very similar to positive Word of Mouth even though they do not know the people who have entered the reviews. 

 

I predict, that in the future 2 or 3 years, almost every company will have Customer Reviews on their website, as this helps a company build trust, it shows how they have treated their current customers, so prospects can make a positive decision to purchase a product or service. It helps build trust.

 

If you would like to find how you can add this element of trust to your site and see how CustomerSure works please go to my web page.

Dentists is this a great way to get referral Customers ?

Would you like the below recommendations on your Website

“Extremely caring people at Ewan Bramley. Dianne was so welcoming and friendly and gave excellent advice. Theresa is very professional and gave honest and welcomed advice. Couldn’t recommend them enough and will definitely use them again”.
Thank you.
Gillian Oogorah – 12/08/2012

“Just like to thank you all for making me feel at ease With the treatment I’m undergoing, you were all
Very kind and professional , looking forward to seeing the end result of my implant
Thanks again Christine”
Christine Breen – 11/29/2012

“Ewan Bramley dental clinic has made a huge impact on my day to day life which I would love to thank them for. The team here is exceptionally wonderful. I would highly recommend this dentist to anyone and everyone. Before my treatment with the Inman Aligner I was never confident in smiling in public or for photographs and now I can’t stop smiling :-). Thank you so very, very much!. Best wishes, Kayleigh-ann”
kayleigh – 01/25/2013

These are just a few that are on there – they are not testimonials they are responses to a question about their experience with the firm. If you would like to find how this system works please go to my web page