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
