You and your leadership team have studied your company’s proposed insurance acquisition for months now from all angles. You know how it will affect your workforce count, your product inventory, your sales and marketing footprint, and even the various ways your company will do business. You have a pretty good idea of how the move will affect employee morale, and you’ve crunched the numbers on expenses, new revenue streams, cash flow, and how the acquisition will drive innovation.
Congratulations on the comprehensive research you’ve done. But what will the effect be on your customer base? This, after all, represents your most critical metric, the impact of the move on the stakeholders you treasure most. How will your M&A activity impact their customer experience? If that thought isn’t already top of mind, it needs to be there long before the deal comes to fruition.
Grasping the Importance of Customer Experience During an Acquisition
Your team’s goal is to formulate and execute strategies for seamless integration and growth. The vitality of your company depends on it. But what happens during the long and involved period while that is happening?
How do your customers feel about your company at this time? Have they been fiercely loyal and supportive for years, or are they on board because your premiums are — at least at this point in time — typically lower than those of the competition? Are they merely chasing savings that might evaporate in the next quarter? What sort of emotional connection, if any, do they have with your business?
The strength of their relationships right now is important to capture because that emotional response could be threatened by what is about to occur. All insurance acquisitions can create turmoil for the two companies involved, and the aftershocks might shake customers loose from their loyalties.
Things will change along the M&A timeline and afterward. Different processes and policies might be instituted. Departments will merge. Offices will open and close. Names and faces will change. How will all of this be accepted by those who most impact your bottom line?
Crafting a Value Proposition Centered on Customer Experience
Customer experience, or CX, is the cognitive and emotional reaction of a company’s customers during every step of the sales relationship, from the first pre-buy analysis to the purchase decision-making process to the steadfastness of their brand loyalty through the years. In short, it’s how our customers feel about your company and the strength of those ties.
An effective customer value proposition, or CPV, addresses the reasons the customer should patronize that company versus the competition. What services or values do you deliver that other companies can’t? Or won’t? What are — or should be — the advantages of your company as seen through their perceptions?
Will any of the advantages outlined in the CPV be compromised by the M&A? That must be determined early in the insurance acquisition, and steps taken to rectify any threats posed to the customer relationship as a result of the upcoming transaction.
The stronger that bond, the more likely your customers will put up with adverse change during and after the M&A process. That’s why it behooves your organization to develop a rigorous value proposition devoted to the experience you’ll give your most valued stakeholders as the new company takes shape.
Evaluating the Impact of Customers During Insurance Acquisitions
Whether you’re the acquiring party or the to-be-acquired, nearly every step you make during the acquisition process has the potential to disrupt your company’s relationship with your most valued customers. What will they notice, and how will those changes be received? That’s what you and your leadership team must frankly ask yourselves.
Keep your customers in the loop. Update them on any changes that will occur in the way you do business in the near future. Simplify the procedural changes as much as possible and make sure your customers know how to proceed.
Use direct mail, the internet, direct agent contact, and other communication tools to make sure your customers are notified at every point when these changes will occur. Your goal is to eliminate as many pain points and reduce as much anxiety, confusion, and frustration as possible.
Preparatory Steps Before an Acquisition to Ensure Value
Survey your customer base before the acquisition as a way of benchmarking how they feel about your company today. After the acquisition is completed and the merged business has successfully turned the corner (you hope), conduct follow-up research to gauge the customer impact at that point.
How do they feel about the new company? How easy is it for them to do business with you within the new context? You want to know the movement of the customer experience perception. Has the CX improved, or have conditions worsened or stayed largely the same?
Your before-the-move actions should also include a transparent explanation of what’s about to happen to your company and how you intend to uplift the customer experience before and after this time.
Avoid leaving your customers perplexed by changes as they come. Keep them foremost in your acquisition strategies every step of the way.
Learn More About Recent Acquisition Success
As the nation’s leading provider of personal lines insurance coverage, we have welcomed hundreds of smaller organizations to join the Confie family. In fact, we have an entire team devoted to successful M&As with companies like yours all across the nation.
Join our team to expand your footprint and grab competitive advantages with a robust product inventory from brand-name insurance carriers.
We make it our responsibility to keep our industry educated and informed. We invite you to visit our Knowledge Center for insurance industry guidance, trends and insights, and acquisition news and details. You can also call us at (714) 252-2500 or contact us online if you’d like to explore a possible collaboration.
