Why Mergers Are Often Bad For Business

from the losing-site-of-the-customer dept

The results of a new Business Week study are unlikely to surprise very many, but it would be good if some big company dealmakers got their head around the message. It appears that, for all the big corporate mergers happening, many of them tend to piss off their customers in a big way. What really happens is that the merged company starts focusing on "savings" rather than its customers. So it looks towards what things they can cut out to emphasize the "synergies" of the merger and make Wall Street happy. Of course, what that upheaval does is make life very annoying for customers -- many of whom don't forgive the company very easily. In fact, the study found that customer satisfaction ratings for merged companies tend to stay low for many years following the merger. A few companies have figured the formula out, and it works by focusing much more on the customer experience than the cost savings initially. Over time, it's easier to recognize the real savings, but simply cutting away left and right not only damages the company's core, but pisses off customers a great deal.