Keeping Clients Not Easy After A Merger
National Underwriter (November 19, 2001)
By Lloyd West
It's human nature to resist change. Thats why in the
eyes of some clients, your agency will never be the same after being
acquired by or merging with another firm.
The way clients see it, once that other outfit becomes
part of the picture, those special qualities that first attracted
them to your agency can vanish--along with their loyalty. When it
comes to human emotions, perception can overpower reality.
Keeping clients is one of the toughest and most enduring
challenges following an acquisition or merger. It requires a well-conceived
strategy incorporating self-assessment, feedback and ongoing communication.
Since becoming a wholly-owned subsidiary of Comerica six years ago,
Professional Life Underwriters Services (PLUS) has continued to
reach out to clients in an effort to reaffirm our independence and
to highlight the advantages of our affiliation.
If your agency or brokerage firm intends to join forces
with another company, the first step should be identifying your
corporate culture--those special qualities and practices that have
enabled you to build and retain customers. They could include access
to superior products, courteous and professional service, and a
whole lot more.
Your corporate culture might be difficult to define,
so seek input from clients, affiliates and personnel at different
levels of your agency, either before or after the transaction. Before
PLUSs acquisition became official, we conducted focus groups with
our clients (independent agents and financial planners) that revealed
what they most feared losing: interacting with the same key personnel,
accessing the same carriers and receiving competitive commissions.
After the acquisition, many members of PLUSs top management
visited clients to gain additional insight and to reaffirm our commitment
to them.
Once you pinpoint the qualities that have
helped distinguish your firm from competitors, make sure you keep
them. Work with senior management of the other company to incorporate
them into the mission statement of the combined organization. Be
sure all personnel understand these qualities and how to convey
them to clients.
Effective communication is critical. Too many
agencies that have been acquired or merged believe the mere act
of distributing letters, newsletters and corporate literature touting
the advantages of the deal will ease clients fears. If only it were
that easy.
Todays customers--whether insurance professionals, employers
or individuals--are far too cynical and more savvy than given credit
for. They read the business and trade press and recognize the uncertainty
brought about by consolidation in the insurance industry. Thats
why these mass mailings often come across as the same old company
line that few clients buy into.
To break through clients fear and cynicism, you must
present convincing arguments--through tactics such as letters, newsletters,
seminars and face-to-face meetings--that your agency will not only
keep its special qualities, but will deliver new advantages.
Start by empathizing with clients. Recognize that the
acquisition or merger might not be a home run to every customer,
especially in the beginning. During the first six-to-12 months,
some aspects of service might actually fall off until new systems
are fine-tuned. Dont deny these realities, but instead express your
commitment to rectifying problems and solicit their suggestions.
Also, be upfront about the reasons for the acquisition
or merger. Clients know bigger profits played a key role in the
decision. So dont give them the, "We merged to deliver better
service" line, because nobody will believe it and youll lose
credibility. Its okay to say the new affiliation will enable your
agency to increase revenues, some of which will be re-invested to
enhance customer service functions.
Wherever possible, give specifics on why and how the
transaction will benefit clients. For example, discuss the faster
average response time you anticipate in six months following the
implementation of a sophisticated customer database management system.
Keep reaching out to clients. Even
if the acquisition or merger occurred several years ago, dont stop
the dialogue with customers, because fear and cynicism will persist.
Use written communications such as personalized letters, newsletters
and your Web site along with face-to-face forums to remind clients
about how much pride you take in maintaining your corporate culture.
At the same time, keep stressing each positive change.
And take every opportunity to solicit feedback.
Lloyd West is president of the Southfield, Mich.-based
Professional Life Underwriters Services, a wholesaler of life, annuity,
disability, long-term care and dental products that became a wholly-owned
subsidiary of Comerica in 1995. He can be reached at lwest@plusonweb.com.
