Top 5 Measures of M&A Success

Top 5 Measures of M and A Success

Today, we’re going to talk about five top measures of M&A success. In 2020, the fundamentals continue to look strong so we can expect quite a few more M&As in our industry.

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Today, we’re going to talk about five top measures of M&A success. In 2020, the fundamentals continue to look strong so we can expect quite a few more M&As in our industry.

Everything from tight talent to succession planning as baby boomers are looking to retire, or other strategic considerations continue to play a part. For this discussion, we’re going to assume that your firm is somehow involved in a merger or acquisition. And thinking about Hinge’s perspective on brand and marketing strategy integration, we’re going to focus on some simple factors for success.

First, let’s talk about the overall pool of clients. Whichever side of a merger you’re on, it’s important to look at how many total clients you have, how many have been added by the new firm configuration, how many competitive relationships have been resolved. Is client retention remaining stable for the first year or two?

This can be a great high-level post. Next, let’s think about the cross-selling of services. This is often a starting place for strategic mergers and acquisitions. So there’s often an opportunity to add new offerings whether it’s in a form of services, tech, or newly combined infrastructure. This often has a direct line to incremental revenue, so it’s a great idea to track some of those metrics specific to cross-selling success.

Next, let’s talk about revenue per client. Now of course, overall revenue is important. But keeping track of revenue per client pre and post-merger can be a telling indicator of client confidence, efficiency, and as cross-selling opportunities that we just talked about. Client experience is really important in a merger or acquisition. By nature there’s a lot of change going on.

So it’s important that you develop a clear communication and support plan for clients, and regularly monitor their experience in a systematic way. Now, last but not least, employee experience is really important too, how are our teams doing internally? Considering that new talent is often a key value considered in a strategic merger or acquisition, it’s important to create or emphasize those techniques and tools that monitor teams’ experiences and apply efforts to retain the best talent.

It’s important to remember that in an M&A situation, new recruits didn’t actually choose your combined firm like they would in the typical job search. Your firm chose them. So onboarding and support are often crucial to get the most value out of your newly combined firm.

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