Mergers & Acquisitions (M&A) activity has been strong within the technology and media industries for some time. While the pandemic slowed deals in the beginning, activity began to rise mid-2020 and is expected to continue with influx of capital from private equity. This creates both opportunity and challenges. Companies have big picture motivation for acquisitions such as expansion of products, skill sets or geography. They also tend to address the unification and stabilization of assets too slowly which can negatively impact net profits due to higher expenses, stagnate revenue, and increased turnover.
A full-service advertising agency executed multiple acquisitions based on market penetration, sales footprint as well as additional services. The hope was to quickly enter a new market, grow revenue and market share rapidly. As acquisitions were completed, it stayed business as usual with new team members and additional services on the solutions list. Unfortunately, the desired outcome didn’t materialize. Employees were not trained to sell value of new services; broad understanding of how the services were connected was missing; and employees didn’t know how to best collaborate for effective outcomes. Clients began to take notice of the confusion. Turnover of employees and clients began to grow and size of deals was stagnant.
Solution set included:
- Created a strategic and operations plan for new organization.
- Created solutions based on market driven needs and current client business goals in alignment with company mission and brand.
- Reorganized teams to support individual and business growth.
- Cross trained employees on comprehensive solutions sets and value to market.
- Unified and consolidated back office and operational processes.
- Built feedback loop to improve client experience and solutions development.
Results of integration:
- Increased revenue
- Reduction in expenses as percentage of revenue
- Improved employee and client engagement as seen by reduction in turnover and retained revenue
- Larger contract sizes due to more cohesive solutions set and sales focus