The Problem: Industry Roll Up
A medium-sized employee drug-screening company was competing in an industry in which a major industry roll up was occurring. The company’s two biggest competitors had recently received VC money and were on a buying spree.
The company execs were not interested in selling at that point and wondered how they could compete successfully under the new circumstances.
Industry roll-ups have always had a land-grab feel to them. Clearly, the goal is to be number one and to increase corporate value and multiple. However, problems with operations and key personnel typically arise whenever there is a merger or acquisition.
Since our client was interested in organic growth, we decided to take advantage of the weakened competitors, which other firms had recently acquired or merged with during the industry roll up.
First, we conducted a competitive analysis on each competitor, which another company had recently acquired or merged. Based on research and industry connections, we identified those companies’ largest clients and anticipated what kinds of problems their clients would most likely experience.
Next, we came up with a ninety-day blitz campaign to go after the competitors’ largest clients. We positioned the company as the “go-to alternative” whenever the clients noticed a slight decline in service.
We asked our client to perform a few trial-runs to ensure everything would flow properly, at the flip of a switch, whenever the clients called. They also beefed up their operations to handle the extra workload.
Over the next twelve months, the company landed eighteen major- accounts, and sales went up 218% over the year before. In the meantime, their competitors were still in disarray after the industry roll up.
The company planned to conduct another similar blitz while the companies involved in the mergers and acquisitions were still delivering poor service.
The Common Mistake
During a merger or acquisition, everyone is so focused on getting the deal done that they forget to secure their customer base.
You may not be able to secure every account, but with a little forethought and executive attention, you can protect your key bread-and-butter accounts. If you don’t, your smart competitors will.