To Keep Clients, Keep Your Culture After A Merger Or Acquisition

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Its human nature to resist change. Thats why in the eyes of some clients, your agency will never be the same after being acquired by or merging with another company. The way they see it, once that other company becomes part of the picture, those special qualities that first attracted them to your firm can vanishalong with their loyalty. When it comes to human emotions, perception can overpower reality.

Keeping clients is one of the toughest and most enduring challenges following an acquisition or merger. It requires a well-conceived strategy incorporating self-assessment, feedback and ongoing communication. Since becoming a wholly-owned subsidiary of Comerica six years ago, Professional Life Underwriters Services (PLUS) has continued to reach out to clients in an effort to reaffirm our independence and to highlight the advantages of our affiliation.

If your agency or brokerage firm intends to join forces with another company, the first step should be identifying your corporate culturethose special qualities and practices that have enabled you to build and retain customers. They could include access to superior products, courteous and professional service, and a whole lot more.

Your corporate culture may be difficult to define, so seek input from clients, affiliates and personnel at different levels of your company, either before or after the transaction. Before PLUSs acquisition became official, we conducted focus groups with our clients (independent agents and financial planners) that revealed what they most feared losing: interacting with the same key personnel, accessing the same carriers and receiving competitive commissions. After the acquisition, many members of PLUSs top management visited clients to gain additional insight and to reaffirm our commitment to them.

Once you pinpoint the qualities that have helped distinguish your firm from competitors, make sure you keep them. Work with senior management of the other company to incorporate them into the mission statement of the combined organization. Be sure all personnel understand these qualities and how to convey them to clients.

Effective communications. Too many agencies that have been acquired or merged believe the mere act of distributing letters, newsletters and corporate literature touting the advantages of the deal will ease clients fears. If only it were that easy.

Todays customers–whether insurance professionals, employers or individuals–are far too cynical and more savvy than given credit for. They read the business and trade press and recognize the uncertainty brought about by consolidation in the insurance industry. Thats why these mass mailings often come across as the same old company line that few clients buy into.

To break through clients fear and cynicism, you must present convincing argumentsthrough tactics such as letters, newsletters, seminars and face-to-face meetings–that your firm will not only keep its special qualities, but will deliver new advantages.

Start by empathizing with clients. Recognize that the acquisition or merger may not be a home run to every customer, especially in the beginning. During the first 6 to 12 months, some aspects of service may actually fall off until new systems are fine-tuned. Dont deny these realities, but instead express your commitment to rectifying problems and solicit their suggestions.

Also, be upfront about the reasons for the acquisition or merger. Clients know bigger profits played a key role in the decision. So dont give them the, “We merged in order to deliver better service” line, because nobody will believe it and youll lose credibility. Its okay to say the new affiliation will enable your firm to increase revenues, some of which will be re-invested to enhance customer service functions.

Wherever possible, give specifics on why and how the transaction will benefit clients. For example, discuss the faster average response time you anticipate in six months following the implementation of a sophisticated customer database management system.

Keep reaching out to clients. Even if the acquisition or merger occurred several years ago, dont stop the dialogue with customers, because fear and cynicism will persist. Use written communications such as personalized letters, newsletters and your Web site along with face-to-face forums to remind clients about how much pride you take in maintaining your corporate culture. At the same time, keep stressing each positive change. And take every opportunity to solicit feedback. Among some suggested tactics:

–Seminars. Always a great value-added service, seminars also enable senior management, the sales staff and account executives to schmooze with customers and gain valuable feedback. If your clients comprise insurance producers, consider holding CE courses to increase attendance and encourage face-to-face interaction.

–Golf outings/open houses. These relaxed settings enable executives, the sales staff and other personnel to bond with customers and get comments on specific problems.

–Telephone surveys. Use routine calls to update customer information as an opportunity to solicit feedback on issues such as staff friendliness, response time and overall quality of service. This feedback can be both quantitative (e.g. rated on a 1 to 5 scale) and qualitative, requesting more comments.

–Tracking interaction with clients. Ask all personnel who regularly speak to clients to keep a log in which they rate every call in terms of client satisfaction. The data can be turned into a written report to be discussed at a company meeting, after which recommendations can be developed.

is president of the Southfield, Mich.-based Professional Life Underwriters Services, a wholesaler of life, annuity, disability, long term care and dental products that became a wholly-owned subsidiary of Comerica in 1995. He can be reached at lwest@plusonweb.com.


Reproduced from National Underwriter Life & Health/Financial Services Edition, October 22, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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