New tech buying cycle challenges sales momentum after M&A, says Gartner

“The job of selling technology is already more complicated for a number of reasons. Provider salespeople, especially those selling more complex and/or higher-value solutions, already deal with the realities of the new technology buying cycle,” said Todd Berkowitz, research director at Gartner. “Adding the complication of an M&A event to this already disruptive buying cycle shift can make a difficult job even harder, especially if acquisitions are larger or are likely to force salespeople to go out of their comfort zones to be successful.” 

After a merger or acquisition, there is a natural desire to get sales organisations integrated as quickly as possible, especially for publicly-traded companies. In theory, the faster the sales forces can sell each other’s solutions, the more quickly revenue goals can be achieved. But in reality, faster does not always mean better, and in some cases, the risks significantly outweigh the benefits. 

Berkowitz explains that the changing buying cycle and necessary adjustments in selling successfully in this cycle is another reason to take this process slowly. “Time is needed to ensure synchronisation between the buying and selling cycles, and extra time is needed to do this properly when newly acquired solutions are added to the mix. Providers on the acquisition side of the transaction should spend time looking at the sales model of the company they acquired and determine if there are some elements worth adopting into their own sales process. A rushed sales integration makes it much more difficult to take advantage of this opportunity.” 

While the top sales performers are generally more capable of dealing with the change and uncertainty brought on by the changing buying cycle as well as the M&A event, they are the ones more likely to leave the company in the short term. Due to the expected demand for their services, they have the luxury of not having to bother with any added “complications.” However, losing these “A sellers” deprives the joint entity of its most valuable assets and increases the likelihood of failure. Given this reality, retention of these A sellers from both companies must be one of the immediate and primary objectives after the deal closes. 

Beyond including some A sellers in the strategy planning prior to close, providers should employ these three strategies as part of their planning.

• Sales and executive management should reach out directly to the A sellers and ensure their questions are answered, even while there is still some uncertainty;
• Minimise changes to account coverage, compensation and process in the early stages and ensure they are included in the longer-term discussions in these areas; and
• Consider retention bonuses or other compensation to make sure the A Sellers remain on board for the crucial first year. 

“The changing technology buying cycle and the corresponding shift in provider sales strategies to adjust to this reality has made life challenging for most salespeople. The list of challenges grows substantially after a merger or acquisition, and providers need to take proactive steps to maintain sales momentum in these situations,” said Berkowitz. 

“Providers can achieve next-level performance in this area by developing a comprehensive strategy that includes setting realistic timelines for sales integration; working to retain top performers; delivering targeted training on products, messaging and positioning; making the right content easily accessible; and communicating with customers on a regular basis in a meaningful manner.”

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By Shané Schutte

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