While economic uncertainty is a headwind for the Mergers & Acquisitions (M&A) market in 2025, the number of corporate deals remains consistent with the previous year, according to Ernst & Young¹.
Yet, research suggests that most mergers result in failure. 70-75% of acquisitions fall short of their intended goals, such as increasing post-acquisition sales growth, achieving cost savings, or maintaining the buyer's share price². In fact, in contested acquisitions, stocks of companies that didn't acquire often outperform those of buyers by 20-25% in the three years following the acquisition². And, PWC found that 17% of customers reduced or ceased business with a company after an acquisition. An additional 50% spent the same, undercutting any growth hypothesis for the merger³.
According to Walker, a B2B customer intelligence firm, the acquired customer base can represent up to 80% of an acquisition's value⁴. Despite this, many companies focus heavily on internal matters like finances, systems, and cost savings during integration, often neglecting the customer perspective. While customers are acknowledged, their specific needs and perceptions, and the strategies to provide them with value, are not prioritized.
Researchers help drive customer value with a community
Integration teams give themselves a super power by building an online customer advisory board (CAB) to consult for integration decisions. Here are 4 ways researcher, armed with a customer community, can help companies ensure their mergers succeed:
- Minimize Customer Churn Through Real-Time Feedback: Traditional periodic surveys often fall short of capturing immediate customer sentiment. By the time results are analyzed, customers may have already left. To prevent this, use a customer community to monitor customer feedback in real time. This allows integration teams to quickly identify and resolve issues, demonstrating responsiveness to customer concerns.
- Refine Communication Strategies: To reduce customer anxiety and prevent churn, it's vital to communicate effectively. Utilize a customer community to test messaging and ensure it addresses customer concerns constructively and enhances perceptions. BMO ran tests with its customer community members for various conversion-related communication and simulating the digital touchpoints customers would experience as part of this change.
- Co-create a bigger value proposition: Whether is combining brands and/or enhancing a set of product or service offerings, companies need to constantly pulse customers about what they find valuable, instead of just assuming more products or services equals a better value proposition. A community allows companies to inquire about customer needs and explore how merged solutions can solve more important “jobs to be done”...and how to brand the new company. This approach allows companies to redefine the ecosystem, including cross-selling and upselling, and enhance overall value to customers and itself.
- Re-design products, processes and services. From loyalty programs to purchasing processes to digital platforms, companies have a lot of decisions about business architecture and which capabilities to replace or enhance. Instead of primarily concentrating on internal system alignment and redundancy elimination, leverage an insight community to re-think product/feature mix, services and processes. Leverage a community to help build customer journey maps that illustrate customer processes, friction and opportunities – and how redesign processes or services could help. Use the community for feedback on a unified UI/UX, new product bundles, and enhanced capabilities. Use the disruption as an opportunity to design new and better experiences in the merged company.
The data is stark: the majority of mergers fail to meet their goals, and a substantial number of customers reduce or cease business with merged entities. However, by leveraging customer research and establishing a dedicated customer community, companies can transform M&A from a risky gamble into a strategic opportunity. Real-time feedback, refined communication, co-created value propositions, and customer-centric redesign of products and services are not just best practices; they are essential tools for ensuring that your merger doesn't just survive, but thrives, by putting the customer at the heart of every decision.
See how Alida’s customers are using their community-centered research platforms to drive success in their mergers:
BMO - BMO uses Alida’s community-driven customer research platform to inform and support customer conversion activities when it acquired Bank of the West.
PokerStars - PokerStars leaders realized the need for a holistic CXM strategy after the merger of.Flutter merged with The Stars Group, its parent company.
1. Ernst & Young. (2024). Why we expect M&A deal values to increase in 2025. https://www.ey.com/en_gl/strategy/why-we-expect-m-a-deal-values-to-increase-in-2025
2. Christensen, C. M., Alton, R., Rising, C., & Waldeck, A. (2016). Why do so many mergers fail? Harvard Business Review. https://hbr.org/2016/03/why-do-so-many-mergers-fail
3. PwC. (2023). Global Consumer Insights Pulse Survey. https://www.pwc.com/gx/en/services/people-organisation/publications/global-consumer-insights-survey.html
4. Walker Information. (n.d.). B2B Customer Intelligence. https://www.walkerinfo.com/
