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Telecoms Mergers: How Do They Impact Customer Experience?
As large telecommunications companies seek to gain a competitive edge and accelerate their growth, the mergers and acquisitions trend continues. Maritz recently conducted a poll of more than 1,000 full-time employees in the telecom industry, to determine the impact of this constant turbulence on both employees and customers.
"Companies too often focus on cutting costs during mergers and acquisitions," said Michele Dunn, telecommunications industry consultant for Maritz. "They often forget to focus on revenue, which should equate to a heightened awareness of the people within the equation -- the customers and employees whose perceptions and behaviors will determine success or failure during what can be a time of tumultuous change."
M&As Breed Mistrust
According to the poll, nearly four out of 10 (38 percent) telecom employees have experienced a merger or acquisition.
While Maritz' research in other industries showed that engagement levels for employees, who recently have experienced a merger or acquisition, were not much lower than employees who haven't, this result does not hold true in the telecom industry. Engagement levels of telecom employees, who experienced an acquisition, are significantly lower on many of the attributes measured. The largest of the negative gaps included poor ratings of agreement with the following statements.
"The primary theme is employees of merged or acquired telecom companies often feel left out or mistrustful of management," said Dunn. "This is bad news for the telecom industry. Maritz Research studies show that employees, who believe their managers don't care about them, are less inclined to care about customers. And, this is in an industry already plagued by perceptions of poor customer service."
In addition, in an unstable environment, employees are distracted and shift their attention from growing customer business and revenue to growing or protecting their individual power. "Unfortunately, those who feel the most disenfranchised are usually the same people responsible for customer satisfaction -- the front-line employees," said Dunn.
Mastering the Merger
According to Dunn, there are three key strategies to help companies successfully navigate the M&A maze:
1. Communicate aggressively to foster trust -- Immediate and aggressive communication with customers and employees can reduce customer and employee churn, lessen disruption and speed transition. Customer messages should focus on the value the new firm will provide. Employee communication can energize them about leadership's vision for the newly merged company, foster idea generation, help align behavior with corporate strategy and improve engagement -- all of which directly touch the customer experience.
2. Shore up sales to safeguard and build revenue -- Many companies focus on cost containment during a merger, when they should be focused on safeguarding and building revenue. Effective sales force motivation during mergers includes incentives programs aligned with the newly-combined company's growth strategy, as well as training to make sure the sales team understands the new value proposition and product offerings. Customer acquisition and retention should be a focus of training and incentives.
3. Engage employees to protect the customer experience -- More robust voice of the customer research and tools that generate a 360-degree understanding of current and new customer needs help companies understand gaps and create actionable steps to address them. Training based on research that's effectively implemented at the front line will yield the best results because these are the people who have the greatest knowledge of customer interactions. Then, incentives and recognition programs can help answer the question, "What's in it for me?" and engage employees, creating thinking advocates that are actively interested in the success of the merged company.
Posted to the site on 4th March 2008