First impressions matter when you buy another MSP, especially for the acquired customers. They will naturally be skittish, wondering what will change. And they’ll have questions—lots of them. How and when you communicate with them, and the cadence of introducing any changes, will either send them running or put their fears at ease.
While you won’t retain every customer—and some of them you shouldn’t—having a well-defined communications plan in place will increase the odds of a successful transition for you and them. Here’s what MSPs with multiple acquisitions under their belt recommend.
Be Prepared for Their Questions
Anticipating concerns that will be raised during your initial communication is critical.
Fear of the unknown drives the questions from acquired customers, says Larry Ward, managing partner at PCS Florida, an MSP in Sarasota, Florida. “They want to know what will change, whether they will still have their primary support contact, and whether prices will increase.”
Concern about price increases “is the question we get 90% of the time,” says Tommy Thornton, CEO of Automates, an MSP in National City, California. Pricing is especially important to smaller clients that operate on tighter budgets, he notes. The more mature businesses, Thornton says, tend to focus on the second most asked question: “What is going to change?”
Customers also fear falling off the radar, with service suffering, as they become part of a larger customer base, says Paul Cissel, CEO of Growth Caddie and M&A Expert in Residence for TMT. “What I explain to them is that we have more resources. We have a lot of certified people. We have a very bulletproof tech stack that’s going to help them reduce risk and help them grow,” says Cissel, who has been involved with nearly 60 transactions, mostly on the buying side.
First Contact = First Impression
Because it’s so prevalent in customers’ minds, pricing talk is inevitable during the first contact. So be prepared. Also, decide how to make that first contact—and what to convey. You get one chance to make a first impression.
Resist the temptation to overwhelm customers with too many details, advises Thornton. Use a gradual approach and start by addressing the questions foremost on customers’ minds.
Thornton makes it a point to directly reach out to customers on first contact. “I want to get in front of it, introduce myself. Most of the clients are overwhelmed by that: ‘Wow, I can’t believe the CEO is giving me a call.’”
During that call, Thornton tells customers if they are getting a new account manager or, for those who didn’t have an account manager previously, whether they will be assigned one. He explains that Automates will have a dedicated team of tech and account managers for the customer, and details how the company works. He follows up the phone call quickly with an email recapping the conversation.
Whether to call or email customers for the first contact depends on the customer base, says Ward. It’s easier to make calls with a smaller base but if the customers number in the hundreds, email is more expedient, he says.
Either Ward or one of his customer success managers makes the call. In addition, he says, “We typically like to have the previous contact person involved in the call so we have a familiar face and voice for the customer.”
Cissel emphasizes the importance of direct communication. “You probably won’t have any more than 20 or 30 customers you have to directly communicate with,” he says. “The larger ones and the ones with the largest account profitability, you want to meet directly if you can. You want to be able to press the flesh. You want to impress upon customers they’re going to be in good or better hands.”
Take the Driver’s Seat
Cissel makes no bones about who dictates how to communicate with customers—the acquirer. Let the customer or the acquired company decide, instead of following your tried-and-true playbook, and you’re asking for trouble. “Any time you do something special, you’re going to screw it up,” he says. The same goes for which systems and tools to implement—the acquirer sets direction.
“We have our preferred method of communications,” says Thornton, adding that they are “very communicative. We show that we are hyper-responsive on the phone and to their tickets.”
In some cases, customers aren’t used to communicating with the MSP, says Ward. That was the case with the customers from a recent acquisition. “There was no outreach from the company we acquired. Now they’re getting a lot of information. I think they are a bit overwhelmed,” he says. Ward is looking to strike the right balance by providing enough information without drowning customers in it.
Prepare to Onboard
Once you establish lines of communication with customers, let them know what comes next. Typical next steps include network assessments and audits to determine what tools they are using and identifying technology and security gaps.
“There may be tools from the MSP you acquire that you choose to keep and others you choose to get rid of,” says Thornton. “It’s definitely different per acquisition.”
If you migrate customers to your platform, typically you’ll conduct a network audit. That’s when gaps and vulnerabilities are identified, which will likely require a price increase to address them. “We find them 100% of the time,” says Thornton. Customers tend to react positively because they want to address the issues, he says.
While the acquired customers may not necessarily understand why audits are needed, they do appreciate it when something like a forgotten server is discovered that they can disconnect. “We audit them in the first month and half,” says Ward. “We want to know right away what we’re getting into.”
Onboarding should include a plan prioritizing tasks and a budget for the next 12 to 36 months. Cissel likes to provide a one-page visual with instructions on how to work with the new MSP.
Another critical part of onboarding, he notes, is collecting customer data for the helpdesk team to provide excellent service when the customer needs it.
Cissel also recommends having the acquired customers sign your contract and MSA as you start migrating them, which typically takes 12 to 18 months. Get customers on your billing platform as soon as possible to get them used to seeing your logo, he adds.
Don’t Rush to Raise Prices
Often, the acquired MSP’s prices are too low. So you’ll have to decide whether to raise them or eat the cost of maintaining them–at least for a while. Experienced MSPs advise the latter approach. Give customers a chance to acclimate to the new tech stack, billing platform, and service protocols before asking for more money. Raise prices too fast, and customers tend to walk.
“The customer is not a spreadsheet where we’re adding 20%,” says Ward. “If we raise prices, we are going to add value for the customer.” That means adding services such as 24/7 support, better visibility into ticket resolution, and providing a better tech stack. In one case, Ward notes, PCS provided a data forensics solution to a customer that the acquired MSP didn’t offer. “No one wants to pay more for the same service they have experienced for years,” he notes.
Thornton advises waiting 12 months to raise prices. First you have to earn the customers’ trust by pointing out gaps in their technology and security coverage. “We provide a pricing option to fill those gaps, but rather than pushing sales, we are coming from an advisory standpoint and only doing our due diligence by bringing it to their attention,” he explains.
Acquirers typically want to avoid chasing customers away, but Cissel argues some customers aren’t worth keeping. He’d rather focus on the more profitable customers, especially those generating margins of 55% or more. For those at the bottom, let them know they will eventually have to pay more to be on a more secure technology stack and that “may scare them away,” Cissel says. “You can’t go into this thinking you’re not going to lose customers.”
Communicate – But Don’t Overwhelm
Despite your best efforts to welcome acquired customers into the fold, change is difficult. Thornton says he learned the hard way not to overwhelm acquired customers with too much information.
“Don’t announce too much change too quickly,” he advises. A lot of work goes on behind the scenes after an acquisition, and customers don’t need to know everything, he notes. While communication is essential, it has to be effective.
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