Synergy, More Science than Art?

Overestimating revenue synergies was the most cited reason for deal failure. For this reason, today’s high-valuation environment calls for a more rigorous approach to estimating revenue synergies.

Here are the top reasons for failure to capture these synergies

- 36% - integrating product portfolio

- 35% - achieve go-to-market integration and transformation

So, acquirers must be more scientific - relying on clean room activities to conduct data-driven sales planning between sign and close, for starters.

How?

Acquirers need to flip the script.

Turning revenue synergies into a competitive advantage:

Step 1/ Begin Yesterday

+ Build an outside-in perspective on possible targets years ahead of live deals

+ Primary customer research and a review of win-loss track records from the seller

Step 2/ Center on a customer-centric approach

+ Build a detailed customer segmentation in the pre-close period

+ Build a roadmap for product integration and joint value proposition

Step 3: Enabling the sales team to generate momentum from day one

+ Zero in on the target use cases, value messaging, and sales collateral that can be sold today

+ Apply focused sales plays – focused marketing efforts to pursue cross-selling & upselling

Step 4: Take lessons from every deal seriously

+ Track synergies to develop a proprietary angle for the next deal

+ Identifying the sources that ultimately materialize and the ones that fail to deliver

#synergy #strategy #mna