Last summer, our firm had the opportunity to purchase the client base of another Best reseller also located in the Twin Cities. In an earlier Consulting Concerns article (Accounting Today Feb. 10-23, 2003, p. 16), I laid out the specifics of what it took to reach an agreement and execute a mutually beneficial acquisition.
This article will detail an equally important aspect of making a business acquisition -- dealing with your pre-existing clients and the ones you gain by making the deal.
Acquiring this firm allowed us to significantly grow our consulting practice by increasing our client base by 60 percent. In addition to helping us, the acquisition was equally beneficial to our new clients, as we were able to offer them a variety of services that they had not been accustomed to.
We reasoned that we could add a substantial number of billable hours each year with a larger base, keeping our consulting staff busier and reaching a higher level of utilization.
The buy-out agreement included provisions for the sharing of service and product revenues that were generated during a specified period of time. This was done to ensure that the selling company would remain committed to assisting us through the transition. In any consulting practice, client loyalty is often relationship-based. We wanted to make sure that we had measures in place that would encourage the transfer of those relationships to consultants within our firm.
Knowing that I would be tied up pulling together the final details of the transaction, and my staff would be busy continuing to service clients, I turned to an outside consulting firm that specializes in marketing and customer strategies. This firm focuses on existing client marketing, as well as customer loyalty initiatives for the reseller channel. They assisted us with managing and implementing the logistics of client communication and integration.
The first thing we did was to determine our message. This included what clients could expect from us, what additional services we could offer, what services would stay the same, and what differentiated us from other reseller firms. The next step was to create a plan for communicating our message to these new clients.
The first step was an introductory letter explaining the redefined focus of the selling firm as well as outlining the reasons that Automated Accounting Solutions was chosen as the acquiring firm. This letter explained the additional benefits that clients would experience by working with our firm. Again, the idea was to portray the acquisition as beneficial to all parties involved. The letter came from the selling firm, but was signed by both the selling firm owners and myself.
In addition to the letter, we developed a Frequently Asked Questions document that was included. This document outlined information that we felt would be important to all the clients. For example: Whom do I call for support? Will my billing rate change? I had a support contract, will that be honored? Who owns Automated Accounting Solutions? What is happening to the selling firm?
The next step was to contact all the clients to discuss the transition. As this process would be very time consuming, we again requested assistance from a marketing consulting firm engaged to help with customer loyalty initiatives.
This specialty company created the phone script to be used and made calls to the entire new client base. As part of this, we had the owners of the selling firm contact their top clients to personally explain what would be happening.
The call explained what was going on, why the existing firm was turning over their clients and discussed the letter and FAQ documents that they would be receiving in the mail. It was very important to position this so clients would not feel abandoned.
In addition, this call gave us an opportunity to discover any outstanding items or additional services needed, and allowed us to invite the clients to an upcoming user group meeting. What we found was that many clients had immediate needs for additional software, training classes and on-site services.
We were thrilled to already be generating revenue from this new group of clients. The call also invited them to contact me with any questions. Overall the reaction was positive; however, you do need to be prepared for some level of attrition.
The next phase was to hold the user group meeting. In attendance were the owners of the selling firm, our consulting staff and myself. We felt that this would be a good transition event and would give the new clients a higher level of comfort with us. The user group meeting was held at a location that the clients were accustomed to, and we used the meeting to announce our first annual client conference.
Hosting a client conference was something we had considered in the past, and now that we were supporting a much larger client base, we decided to move ahead with the project.
The event management and logistics were outsourced to Tipping Point Advisors. Over a two-month period, clients received fax, e-mail and letter invitations to the event.
This also played into the marketing strategy we had for our recently acquired clients. We wanted to make sure that they saw our name as often as possible in the first two months following the acquisition.
Our client conference was a one-day event that kicked off with a keynote address from Taylor Macdonald, Best Software’s senior vice president of business partners. We were fortunate to have him speak, as we wanted to showcase our strong relationship with the Best.
In addition, we invited product developers to attend as sponsors and had them present sessions in their areas of expertise. Of the 100 clients in attendance, about 20 percent were from the acquired client base.
The day was a success. We were able to showcase our talented team of people, our relationship with Best Software and our ability to give clients an opportunity to network.
This event cemented the relationships we have with our clients and provided significant revenue opportunities. As a result, we plan to host an annual conference in the fall.
Our ongoing management of the client base consists of two full-time account managers, quarterly user group meetings, plus monthly newsletters and e-mail communications. Having these systems in place has provided us with additional service and product revenues from our base of clients.
If you are considering an acquisition, know that how you integrate your new clients is as important as the details of the transaction. After all, they are what you are buying.
