M&A from Commercial Perspective: How to Lead Revenue Integration During Post-Acquisition

Revenue integration is all about merging pricing, sales teams, customers, and market strategies after a company buys another. When it's handled well, it can bring in extra revenue for M&A. But if it’s done poorly, it can quickly hurt the company’s value.

Some common issues with revenue integration are:

• Confusing pricing models that leave both customers and sales teams puzzled.
• Conflicts in sales processes, target audiences, and marketing that complicate go-to-market strategies.
• Ambiguous roles for leaders, leaving sales teams feeling unmotivated.

In this article, we'll talk about how commercial leaders can tackle these problems.

Why revenue integration fails  

M&A deals look good on paper when it comes to boosting revenue, but many don’t really deliver. The main issue is that companies often underestimate how tough it is to merge their operations.  

Pricing problems

Pricing usually takes a hit first. Once the deal is done, the new company might run into:

• Conflicting pricing models - One side might use subscriptions with monthly fees, while the other does one-time licenses or flat rates.
• Regional pricing gaps - Customers in different areas may have grown used to different price levels based on local competition. If prices are changed too quickly, it could upset some customers.
• Legacy discounts and custom deals - Each company may have its own special pricing agreements with long-term clients. Figuring out how to merge these can confuse sales teams and lead to contract renegotiations.

Without a good plan for bringing pricing together step by step, even loyal customers might start to wonder if the new company has their best interests in mind.

Go-to-market confusion

Putting together sales and marketing teams brings another big challenge: figuring out how to go to market together. Common issues include:

• Different customer targets. One company may target large enterprises, while another goes after small businesses. Salespeople suddenly have to deal with new products and different customer needs.
• Different sales processes. The two companies might have entirely different ways of handling sales, from generating leads to finalizing contracts, requiring a lot of retraining.
• Mixed messaging. The marketing teams may struggle to agree on product positioning or brand identity. Without a clear and unified message, customers might get confused.

If these issues aren’t dealt with quickly, they can hurt growth and lead to lost sales opportunities.

Team and leadership issues

A successful integration hinges on having a motivated sales team, but that’s often where companies hit major bumps.

• People might worry about their jobs and future in the new setup.  
• Sales staff might find themselves reporting to new managers or in different territories.
• Compensation plans might need to change a lot to fit new products and shared goals. 

Managing the human side of merging revenue operations requires openness, kindness, and proactive leadership.

The role of commercial leadership in revenue integration

Commercial leaders are key players when it comes to the post-acquisition stage. They link the big picture strategy with real-life sales, pricing, and keeping customers happy. 

Here's where they should put their energy:

1. Align pricing models

• Take a close look at both companies' pricing setups, including tiers and discounts.  
• Find any overlaps or conflicts that could confuse customers or sales teams.  

Expert tip:

“Most integrations face about 60-70% of revenue risk due to pricing mismatches. One big issue we currently see is hidden discounting. Companies often sign multi-year contracts with complicated pricing that includes regional exceptions and outdated discounts that just don't mesh well. If these problems aren't addressed right away, sales teams can lose trust, deals get stuck, and cross-selling can fall apart, leading to a loss of value quicker than you might think.” - Vitaly Makarenko, CCO at Quadcode Brokerage Solutions  

2. Harmonize GTM strategy

• Bring together ideal customer profiles (ICPs) and redefine target segments for the new business.  
• Standardize sales processes, qualification criteria, and how you communicate with customers.  

3. Align and retain sales teams

• Address any worries and uncertainty with open and early communication.  
• Revamp how you reward teams to encourage collaboration.   

4. Manage customer communication

• Let customers know early what changes are coming and what will stay the same.  
• Assign dedicated customer success managers to help during the transition.  
• Reassure clients about service continuity, product support, and contracts.  

5. Navigate cultural differences

• Commercial teams often have their own unique cultures, sometimes even more so than product or engineering teams. 
• Hold workshops, open discussions, and cross-team projects to build trust.
• Use shared goals and performance metrics to foster unity.  

5-step guide to revenue integration

If you want to make revenue integration easier, here’s a straightforward 5-step guide for commercial leaders. Each step aims to stabilize revenue and foster long-term alignment.

Step 1: Quick pricing check

• Start by listing all products, pricing levels, discounts, and contracts from both companies. 
• Spot any immediate issues that might confuse customers or make sales tricky.
• Decide which pricing problems need quick fixes and which need more time to sort out.

Step 2: Align go-to-market strategy

• Create standard customer profiles, sales processes, and pipeline stages.
• Bring together marketing, sales, and customer support teams under a unified strategy.
• Make sure the messaging is consistent across all customer interactions.

Step 3: Merge sales teams and incentives

• Clearly define new reporting structures and individual roles from the get-go.
• Revise compensation plans to encourage teamwork and support for cross-selling and upselling.
• Develop joint training programs to ensure everyone is on the same page about products.

Step 4: Create a customer communication plan

• Group customers by size, region, and contract type for more personalized communication.
• Proactively address any changes in pricing, support, product plans, and services.
• Use customer support teams to reassure customers and manage relationships.

Step 5: Keep an eye on performance

• Monitor key metrics like revenue retention, churn rates, cross-selling success, and customer satisfaction scores.
• Look out for early warning signs to make adjustments before issues become serious.
• Set up a cross-functional team to oversee the ongoing integration process.

Conclusion

When it comes to mergers and acquisitions, closing the deal is just the beginning. The real test is how well companies manage to capture revenue afterward. One of the main reasons deals fall short is poor revenue integration.

By aligning pricing, creating a unified go-to-market strategy, keeping sales teams stable, and communicating well with customers, businesses can turn this process into an advantage.