SalesConsiderationsDuring MergersWHITE PAPER

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REVENUE SYNERGIESThe most important thing to demonstrate post-merger is that revenue synergies promised during merger announcements can be made a reality. The execution challenge here lies in the need to get sales teams from two organizations selling efficiently with an expanded product or services set. And that’s where having a strong sales methodology is key.

Sales methodology provides the insight and skills that sales teams need, especially in times of change. Rather than hope that sales people understand how to approach accounts to deliver the new message and excitement of new product and services, you can have confidence that they’re working strategically, qualifying opportunities correctly, understanding the ever-changing political landscape of their clients and prospects, and driving to close as quickly and efficiently as possible.

As proof of this need, consider that only half the companies in a TAS Index survey had 50% or more of their sales people achieving quota. This deficiency and others can be significantly improved by the application of sales methodology, which boosts quota achievement, reduces turnover, and increases the close rate of deals in the pipeline.

Sales Considerations During Mergers

INTRODUCTIONAs the pace of business continues to accelerate, strategic combinations have become the weapon of choice for gaining market share, expanding product lines, garnering operational and financial efficiencies, and ultimately delivering increased shareholder value. However, the challenge lies not in these merger deals themselves, but in the post-deal operational execution, since that’s where their value is actually created.

Unfortunately, with an overall failure rate of between 50% and 70%, post-deal integration is not only where the value is created, but also where the failure occurs. Everything is under a microscope, and the scrutiny is further compounded when public companies have to answer to Wall Street and industry press.

Nowhere is this execution pressure felt more than in the combined sales organization once two companies have been put together. This is due to the fact that the sales team is where the three primary operational objectives of any merger come together most strikingly:

• RevenueSynergies• CostSynergies• CulturalCompatibility

Organizations that deliver well on the above objectives are the ones that are the stuff of business legend, particularly when the further challenges of globalization and economic turbulence are added to the mix. It is in exactly this environment that the application of sales methodology, process, and technology reaps its biggest benefits.

Look at the impact that can be made by having at least 50% of your sales teams using a leading sales methodology like TAS, shown in the figure below. These gains in sales efficiency and reduced turnover can help improve revenue performance and make the revenue synergies demanded by stakeholders a reality.

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0%

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<50%>50%

Figure 1: Benefits of Sales Methodology

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And while the benefits of sales methodology and process are well-documented, their ongoing reinforcement is crucial if the full ROI is to be achieved. Obviously, management buy-in for these initiatives is a key to their success, but even with management fully behind their implementation, sales methodology and process have a dismal record without the added support of technology. In fact, 87% of skills learned during training are lost within the first month, so reinforcement is necessary if the training is to have a meaningful impact.

Moreover, using technology to reinforce methodology adoption and usage is an important factor in driving post-merger revenue. It’s not just about the ROI on your CRM investment; it’s really about getting the revenue productivity out of your teams. Our research shows that CRM usage improves from a dismal 33% without methodology integration, to 65% with a proven and well integrated methodology. Likewise, integration improves the adoption and use of the methodology itself, which moves from 14% to 38% as a result.

COST SYNERGIESRight behind the intense revenue pressure that accompanies mergers is the need to reduce expenses through cost synergies. This typically means one thing: get more done with fewer resources. Eliminating redundancies in the combined organization often results in reduced support staff, and sometimes means fewer sales people as well. Added pressure comes from the inevitable voluntary turnover that accompanies most mergers. And yet, this leaner sales organization is expected to produce the revenue synergies discussed above. How can this be accomplished? In addition to ensuring that your team has the methodology skills needed to tackle a more involved sale, having a rigorous sales process moves from nice-to-have to absolutely critical.

Without a defined and measured sales process in place, existing sales talent will be slower to move through the sales cycle for additional products and services that are now part of their portfolio. Moreover, management will have a difficult time accurately forecasting their performance during this critical time of scrutiny by the stakeholders that approved the merger transaction. Equally daunting, how do you accurately measure your pipeline to ensure that sufficient business is available to make your goals?

The answer lies in a well defined sales process, supported by strong technology to continuously reinforce and measure that process. How do we know this? The TAS Index survey shows the dramatic improvement that the combination of sales methodology, process, and integration with CRM can provide: 88% improvement in quota achievement, 33% reduction in sales force turnover, a 20% increase in opportunity close rate, and a staggering 155% increase in sales proposal close rate (see Figure 2).

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Figure 2: Impact of Methodology, Process and CRM

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Having a proven, integrated methodology helps solve this, and has the added benefit of enforcing the sales process as well. Combined with the right capabilities, this means your sales velocity not only improves, but enables you to finally measure your pipeline and forecast objectively. Rather than relying solely on armies of analysts with spreadsheets and a healthy dose of intuition, solutions like Dealmaker Predictive Sales Analytics become an alternative. It will not only give you the impartial numbers, but provide insight and coaching hints that allow you to drill down from your newly accurate forecast and pipeline into individual deals and sales people, so you can apply coaching where it matters most.

This capability is also invaluable when it comes to reporting to senior management and the board on performance against the revenue and expense objectives laid out for a merger. Imagine the ability to present your forecast and pipeline analysis, and sales cycle performance, all without having to spend a single minute with a spreadsheet or analyst (see Figure 4). Only the combination of an integrated sales methodology, sales process, and technology integration with your CRM system can give you these results.

Achieving reinforcement means more than beating on people to use what they’ve learned. Instead, using elearning capabilities and integrating sales methodology and process into your CRM system are a proven way to not only reinforce concepts, but get the ongoing measurement that allows management to offer focused coaching to their sales teams (see Figure 3). For example, the Dealmaker Virtual Learning System is an on-demand video learning system that allows sales people to refresh themselves on key methodology concepts on a just-in-time basis, watching small, highly concentrated segments to help them through a particular element of a deal.

Likewise, your sales process is at risk of rapid degradation without the support of technology. For years, the answer to this has been CRM but as noted earlier, adoption has been a problem.

TIME

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Area of Missed OpportunityLoss of Sustained Value

Traditional LearningE�ectiveness Curve

Blended LearningE�ectiveness Curve

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Figure 3: Impact of Elearning on Retention

Figure 4: Dealmaker Predictive Sales Analytics

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Having good performance measurement and coaching tools also cuts through the bluster that can creep in during these merger transitions. We’ve all seen this situation where fear of change leads sales people to overstate or even manufacture performance claims. Using an unbiased system to help adjudicate these cases, provide coaching, and as necessary aid management in making organizational change decisions is something that our customers have told us they rely on during times when emotions run high. And where you have strong performers that are at risk of resigning and heading for greener pastures, it’s important to note that in addition to making them more effective, the use and reinforcement of methodology can reduce sales force turnover by 33%.

CULTURAL COMPATIBILITYThe other important objective in any merger is to integrate the cultures of the two companies being combined, and this is a particular challenge in sales. There is inevitable territory overlap, and often there is also overlap in the product mix, leading to natural tension between sales teams. In some cases, there is outright hostility when former marketplace competitors are merged.

While there is no substitute for good management in these situations, having a common sales methodology and process has proven very helpful with a number of our customers. The simple reason is that the standardized approach, common language and steps, and the use of automation that methodology, process, and technology provide helps to bridge cultural, organizational and time zone gaps.

SUMMARYMergers offer tremendous opportunity with a high degree of difficulty. Sales organizations have to perform to deliver on higher revenue expectations with reduced resources, and do so while creating a positive combined culture.

The positive impact that a proven sales methodology, process, and technology can have on these challenges is well understood and documented. The missing

ingredient then becomes management’s willingness to engage in and truly embrace an initiative that makes these benefits a reality in their organization. The TAS Group stands ready to be a partner in these initiatives, and help deliver on the promise that a merger in your company holds.

If you wish to find out more, please contact us at info@thetasgroup.com.

ABOUT THE TAS GROUP  The TAS Group helps sales professionals sell smarter and manage better. Through a unique combination of deep sales methodologies and intelligent software applications, customers achieve measureable results including increases in win rates, deal sizes and qualified opportunities, as well as decreases in sales cycle length. According to the Aberdeen Group, customers of The TAS Group realize 21 percent greater attainment of sales quotas.

Dealmaker® intelligent software is the engine driving revenue growth and sustained adoption of improved sales practices.

The TAS Group has helped more than 850,000 sales professionals in more than 65 countries, from small private companies to market leaders. For more information visit http://www.thetasgroup.com and read the dealmaker365 blog at http://www.dealmaker365.com.

ABOUT DEALMAKERDealmaker software from The TAS Group delivers real-time opportunity and account management, intelligent deal coaching, accurate sales forecasts, smart playbooks, self-paced learning, and predictive analytics, resulting in measurable sales growth.

Dealmaker can be delivered as a standalone application or can be integrated with Salesforce CRM, Microsoft Dynamics CRM, Oracle CRM On Demand, Oracle’s Siebel CRM and SAP CRM, or with any third party software application through the Dealmaker API. For more information visit http://www.thetasgroup.com.

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