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The Customer Comes First: Why ‘Voice of the Customer’ Analysis is Vital For Any M&A Process

by Ole Pedersen August 25, 2021
Voice Of Customer Analysis M And A Freshminds

​During a business acquisition, it’s often believed that customers will come along with the business purchase with no questions asked. But, unlike business assets, customers are not bought or sold in the same way. The M&A process can quickly alienate those treasured customers and lose vital value as a company changes hands and builds in different strategies.

Acquisition process aside, today, customers are savvy and brand loyalty can be low. So, building in a strong ‘Voice of the Customer’ (VOC) research and analysis process and focusing on customer experience plays a pivotal role in understanding the market and driving long-term success.

Why ‘Voice of Customer’ analysis is important

The most successful organisations have developed some solid customer-obsessed brands. These focus on a strategy, investment and process that enhance engagement and true understanding of their customers; what they want, what their expectations are and how they interact. This understanding enables them to develop products and propositions, and respond to the changing market demands where the business sits.

Consumers can be unforgiving if they do not receive what they expect or encounter an online purchase badly. Across the industry spectrum, customers drive purchases, referrals, and profit, ultimately determining whether companies thrive or profit, struggle or fail.

A more customer-centric approach calls for a realignment of the operating model in order for people, products, processes and technology to deliver a compelling and unified customer experience. While this approach may sound challenging to build in, many organisations understand the importance and recognise that this ‘VOC’ is a vital business discipline for ongoing development. Ultimately, a successful customer experience can be very profitable.

VOC in the M&A process

When it comes to M&A activities of any size, shape or form, prioritising what the customer values provide the opportunity to adjust integration plans where relevant and affords the ability to bring those existing users across with the acquisition.

At Freshminds, we strongly recommend putting the ‘VOC’ at the centre of M&A processes, building in customer due diligence pre-deal and experience management in the integration planning. The business and operating model analysis can be used as a lens to help you match targets to the strategic purpose of the deal, but combining with a deep understanding of the user base will give a fast-start post-deal. Ultimately, it’s important to have a broader assessment of the target in order to ensure that the decision goes beyond the financial considerations only.

Building in customer analysis pre-deal

Workshops with various key selected customers and former team members of the selected target, help uncover opportunities and new sources of value. These assist in validating the analysis of the ‘VOC’ program. Across the research stages, understanding the market gives a clear picture of how the potential investment could add further growth.

1. Gap analysis:

When performing the gap analysis between the current status of the target’s customer experience capabilities, put the ‘VOC’ research at the centre of this to determine what needs to be bridged, should the deal go ahead. This could include views on customer service, value propositions, channel performance, brand promise of the target or one of their brands, and the overall engagement their customers have with the target/brand.

2. Operating model analysis:

Use the ‘VOC’ analysis to drill further into the current operating model of the target to provide a holistic understanding of how each of the various capabilities of the target (from its culture to the technology) can be combined to deliver additional value to the customer experience. The objective is to understand the business drivers, how they are linked, and how this can impact the customer experience.

3. The business case:

It’s important to build the key areas of the ‘VOC’ programme into the target business case. Identify the chain of value drivers that deliver upon the customer experience. Doing this ensures there’s a clear linkage between the research findings, measurement of the existing customer experience, and the overall deal performance.

Overall, it’s beneficial to apply the principle of reverse engineering, beginning with the desired business outcomes from the M&A deal (in particular the customer value propositions) and work back through the value drivers that would deliver upon those outcomes. Based on this, it’s possible to start formulating a holistic strategy to deliver better customer value and see practical development and growth.

The value of a VOC programme

A thorough ‘VOC’ insight programme will help to deliver results across key areas, such as:

  • Quick wins: The immediate delivery of value, requiring only minimal effort post-deal.

  • Transition: Making better, faster changes and hard savings, achieved through the combining of systems, business functions and processes. These can be achieved with minimal impact to the customers, provided they are aligned with the outcomes of the ‘VOC’.

  • Transformation: Ensure to make the necessary changes to the customer experience, based on the ‘VOC’ programme, whether that being through capturing new markets, opening up new geographies, innovate current products and/or deliver new products, services, brands or work in new channels.

  • Leadership: Make sure the success of the M&A is closely linked to the behaviour of the leadership of the target, as they have to drive the new core strategy, and increased changes in existing customer experience, or the launch of a new strategy which is vital part of the target’s future success.

  • M&A integration scorecard: It is vital to expand this to include key engagement measures at each of the customer touchpoints to ensure continued focus on customer experience during integration.

A thorough, well-planned and ongoing VOC programme is essential for the success of every M&A deal. It provides a pathway for detailed target evaluation pre-deal, and ensures a validated platform of intelligence from where to deploy the post-deal strategy across the merged/acquired company.

At Freshminds we have a long and strong track record of successful VOC programmes that have helped to facilitate successful investments by large Private Equity firms, Funds and Family Offices. In addition, we also often partner with well-known Management Consulting firms in their CDD programmes by delivering the VOC aspect of the projects.

Author: Ole Pedersen, Business Consultant

With 30+ years of industry experience, Ole is a qualitative research expert and consultant with highly varied international and sector experience. He has a background in working at the intersection of business and strategy, insights and research, and innovation and technology.

Ole has worked with top-tier and boutique consultancies over the last 20 years, managing teams and research projects, conducting primary and secondary research, drawing behavioural insights from large amounts of data, highlighting key trends and presenting a final report to C-level clients. He has a proven track record in Financial Services, having worked with companies, including Allianz in Germany, AXA Wealth UK, Erste Bank in Austria and the Lloyds Banking Group in the UK.

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