Merging companies must balance costs with customer satisfaction

Organisations can go through a great deal of stress when undergoing a merger, with priorities such as customer satisfaction falling down the list. However, a recent study advises businesses to always place the customer first even in such complex times.

According to research by Rice University, Kent State University and the University of Pittsburgh, neglecting the importance of customer satisfaction during the merger process will only lead to failure. Instead, companies must make sure they balance the most pressing needs of the organisation, such as cost reduction, with the demands of the customer.

This means that merging businesses must have a “dual-goal emphasis” when undergoing the transition and keep the customer in mind. Doing so will likely lead to enhanced financial performance in the long run, according to the authors of the study.

Rice University's Vikas Mittal pointed out that, simply put, customers are the largest revenue base for any company.

“Despite the synergistic efficiency improvement opportunities that a merger presents, true firm value is only increased if customer satisfaction is increased as well,” he says.

“During a merger, the management team needs to seize opportunities to implement both changes simultaneously.”

Mittal added that firms that focus on cost cutting above customer satisfaction are “missing the boat” and neither should be emphasised at the expense of the other.

It is clear that any organisation undertaking a change management project such as a merger needs all the help it can get.

Working with a change management consulting firm can give merging businesses the confidence and assistance they need to successfully navigate the transition, including making sure the needs of all stakeholders are met – from the boardroom right through to the customer base.