How to Handle a Vendor Acquisition

How to Handle a Vendor Acquisition
Picture this: You head into work at 8:45, your to-do list grows with every new email that enters your inbox. You are already dreading the mountain of tasks and meetings in front of you and then you open up LinkedIn and see the big news: your vendor has just been acquired. While the shareholders are popping champagne bottles and planning their next vacation, you’re left to mull over the near/far-reaching consequences of this acquisition. Here are 4 things to watch out for when your vendor gets acquired.

1. Price Hikes and Upsells and Gouges…oh my!
All too often it is the loyal, tenured customer who gets the short end of the stick in the form of changing pricing models and unsolicited pressure to purchase new integrations.

Think about why you purchased the product in the first place. Perhaps it had a user-friendly interface or a platform that integrated well with your other technologies. But first and foremost, it had a price that fit your budget. New features and added functionality are great. But when they are packaged into existing deals, you can often get more than you bargained for.

If money isn’t important to you then keep scrolling. But the reality for most organizations is a limited amount of sales/marketing spend on software purchases. Trying to reallocate budget for any price increases is often hard to justify without a noticeable change in the ROI of the product.

2. Changing Account Owners + Worsening Customer Service = New Headaches
Your team has spent years building up a rapport with your vendor. Maybe your vendor sent your team cupcakes or forwards funny emails. No matter the nature of this relationship, it is the result of extensive time and collaborative effort from both parties.

One consequence of any merger is a rearrangement of sales coverage, which means that you will have an entirely new team dedicated to your account. Let’s be honest, forging new relationships is hard. And saying goodbye to old ones, even in a professional setting, can be difficult as well.

Remember when your younger sibling was born and you were no longer your parents’ favorite child? When a small vendor gets acquired, more often than not account relationships become impersonal. It can certainly be jarring for a customer who had such a personalized experience to be treated like a commodity by an under-informed customer-service team.

3. Tried-and-True vs. Something New
An organization’s biggest pain points when purchasing any new software is integrating it into their business processes. Getting members of your organization up to speed with the features and technical specs of the purchase can make even the calmest person want to pull their hair out. Change is not always a bad thing, but having it forced upon you as a result of an acquisition is not change for the better.

If the acquisition is a straight technology grab or one competitor buying out another for market share, there may be little or no interest in continuing the acquired product in any form. The usual decision in such a situation is for the larger company to keep its product and customers, and terminate the acquired product.

Do you remember assigning ownership and administrative duties, configuring integrations and APIs, and training your team on the new product? Now imagine having to do that all over again. You might think you are living the software version of Groundhog Day.

4. Credibility and Trust Go Out the Door
With any software purchase comes trust — trust in the vendor that it will deliver their service and trust that whatever contractual agreement you entered will be upheld throughout the life of your arrangement. But what happens when an entirely new company takes over these terms of service?

Once your vendor gets acquired, there is a myriad of new things to worry about, like:

Is my data safe from cybersecurity threats with this new company?
Will I be able to stay with the original platform or will there be a forced migration?
Are the terms of my contract still in effect and have the terms of service changed?
Will my customer service get interrupted in the acquisition process?
Will there be any data migration — and if so, how will that affect my data processes?
Without answers, these questions hold the key to discovering just how time-consuming and frustrating this acquisition will be to your team.