March 28, 2023

The CMO’s Guide to Acquisitions: A Playbook for Success

by Laura Parkyn

For B2B CMOs, acquiring a new company can be both an exhilarating and nerve-wracking time. On one hand, an acquisition brings with it a flurry of opportunities for growth, innovation, and market expansion. On the other, it can also mean a whole lot of pressure, uncertainty, and tough decisions.

Suddenly, you have a new brand to bring into the fold, with a new set of customers to target, a new product portfolio to promote, and a new combination of employees to acculturate. All without losing the brand equity of the acquired brand. 

So how can a CMO help their company effectively navigate all the changes that come with it? That’s what we asked 3 seasoned B2B CMOs in a specially curated panel with marketing execs Julie Feller of U.S. Legal Support, Isabelle Papoulias of Mediafly, and Kristen Russel of symplr. Read on as we delve into the top 6 acquisition takeaways from the conversation.

1. Start with Understanding Why No Two Acquisitions are the Same

With multiple acquisitions under their belts, all three CMOs would agree: There is no one-size-fits-all solution and that each acquisition will require a different strategy. Factors such as the company’s size, the industries involved, and the cultural differences between the two companies can all play a role in determining the best course of action.

Having been with Mediafly for 5 acquisitions in a short period of time, Isabelle shared this key advice: “You have to have an open mind. You’ll deploy tactics, some may work, some may not work, and then it’s iterative. You learn and optimize from there.”

2. Assessing Brand Equity Post-Acquisition

Companies are acquired because the acquiring company finds something valuable about them. Hence, you can’t simply toss out the acquired brand and replace it completely. According to Julie: “The biggest challenge across three acquisitions has always been how to integrate the new brand so that we have a cohesive story, but we don’t lose the essence of the acquired property or their market position.” 

Navigating this challenge starts with listening—one of the key superpowers of great CMOs. It’s all about learning and understanding the acquired company’s current positioning, what’s worked well for them, and what hasn’t. Julie believes that there’s something to be gleaned from every company whether they had a strong brand or not: “They might not have an event plan or a budget for paid advertising or social strategy, but they do at least have communication with their existing clients and they know how they’re getting business.” 

3. Preserving Brand Value for Acquired Customers

It’s absolutely necessary to evaluate the level of engagement and connection customers feel towards the acquired brand. From awareness studies to internal and external focus groups to social listening, these tools will help CMOs determine how quickly or slowly they can usher in the transition. 

In some cases, for example, you can change the acquired brand name without much friction, while in others, you need to move more slowly so not to give up the equity of the acquired brand. Kirsten shared that while some acquired brand names have been changed to fit within symplr’s branded house (e.g. symplr Spend, symplr Clinical Communications, symplr Workforce Management), they only changed the visual elements (the colors, typography) for others to better align with the parent brand without losing acquired equity. 

In all cases, there’s a certain amount of reassurance marketing that needs to be done for acquired customers. They need to know that things are changing, yes, but that they are changing for the better. Transparency and over-communication are key here—reach them in every way possible: assign account managers who can communicate changes face-to-face, hold in-person events, and compliment all of it with relevant emails, phone calls, direct mail, and more. 

4. Bringing Two Teams Together: Employee Acculturation

Employees are the heart and soul of any organization. If you’ve heard a single episode of Renegade Marketers Unite, you would know Drew says employees should be given top priority. While customers and prospects are important to a business, investing in employees can provide a significant return on investment, improving productivity, customer satisfaction, and driving innovation.

Integrating new employees into existing operations can be complicated and time-consuming, requiring a great deal of communication and coordination between different departments and individuals. To make them feel a part of the company and aligned with the greater brand, consider creating welcome kits and hosting events focused on who you are, what you do, and where you want to go—communicating successes and admitting failures along the way. 

Companies should invest in training and development programs for their employees, and encourage collaboration and communication between departments. They should also establish clear lines of authority and responsibilities, and empower employees to make decisions and take ownership of their work.

You can’t rush acculturation, either. Isabelle shared that the two companies will need at minimum three months to get through the team evolution of storming, forming, norming, performing. Here’s what you can expect from each stage: 

  • Storming – The chemistry-building stage as two company cultures come together. 
  • Forming – Things start to click here as organic relationships start to build.
  • Norming – Synergies are developed, maximizing employee outputs and removing friction.
  • Performing – You’ve reached A+ stage in terms of functionality and cohesiveness.

5. Unlocking Cross-sell and Upsell Opportunities Amidst Platform Changes

Acquiring a new company most often means that your platform is adding a new product or service that is going to amplify value. There is a tremendous opportunity here to cross sell and upsell existing clients on both sides of the fence with everything you have to offer, but this means you need to unify the story and messaging being told via marketing and sales. If your story is cohesive and sales teams are aligned, you’ll see upsell and cross-sell increase. 

However, it takes time to integrate two products together. It cannot happen overnight, meaning that your vision for the platform may not match the platform you have today. Here’s where over-communication is key again: Focus on the value you offer now, communicate the vision for the future, and carefully detail how you’re delivering on it (what can customers expect to see in 6 months, in one year, etc.). 

6. Measuring the Success of an Acquisition

The metrics signaling the success of an acquisition are as unique as the strategy behind it. “We look at the deal thesis,” Kirsten Russel explained. “Why did we acquire the company: Is it for growth of TAM, or is it for a technology acquisition play? Depending on that, we’re going to apply different metrics to the acquisition.” 

In addition to these metrics, Kirsten also highlighted the importance of measuring customer and employee satisfaction, including data points like Net Promoter Score (NPS), cross sell penetration, customers acquired per acquisition, and average revenue per customer. 

You can’t neglect brand awareness either; symplr runs a brand survey twice a year to track the success of an acquisition and where there are still opportunities to build an even stronger, more cohesive company. 

Final Thoughts on B2B Acquisitions

Effectively merging two companies isn’t an easy road. Still, companies that are well-prepared and proactive in their approach can effectively navigate these changes and maximize the opportunities they bring. By establishing clear goals and expectations, maintaining their culture and values, and building a strong, cohesive team, companies can successfully shift into position post-acquisition and reap the benefits of their investments.