GTM Integration Planning Part 2

In-depth integration planning

It's a multifaceted piece. But the customer’s journey should always be the north star of every transaction.

• How do I put two lead-tracking tools together? 
• How do I put two comp systems together? 
• How do I even merge two customer bases and sales force pieces?

And every time you think about those, always go back to thinking about the customer experience. And the general rule is it's ok to see duality for about a year because there are a lot of things that happen. So maybe I have to work with two sales forces, or sign two contracts or have two billing pieces cycles. 

A positive customer experience is paramount to deal success and integration should be done within the first year post-close. Taking too long will turn customers off. 

And then the next thing you should think about are the tasks that you can do right off the bat. Because you have two sales forces that are eager to work together. So how do you incent them and get them to be joint sales?

And the more you can get both sales forces working together, there's also a magical moment of keeping both sales forces in play. You have two sales forces and they're not really working together, that just doesn't do very well. 

So that's the first short super tactical pieces and some of that can be like joint lead passing or joint sales calls. Think of ways to incentivize the sales force on both sides to work together to capture immediate opportunities. I think those are all tricky things. 

A lot of times companies will think about SPIFs, and SPIFs are great tools, but SPIFs also have some limitations. Because if you make a really big SPIF, you're paying a lot of money for maybe what's a small transaction.

And if you make a really small SPIF for a joint deal, then you may be incenting people for something that they would've made a much bigger deal, much more upside on, as if they worked together. And then I think the other piece that you have to think through is if your M&A doesn't come on nice calendar years. 

And so, you have an existing sales force that is the inbound company, and then you as the host company, have your own existing sales force with plans, territories, quotas, all those lovely things and you can't just merge them at once.

If you did that, it would be really disruptive because the odds of both territories mapping exactly the same is zero. So you have to think about how you operate in this interim phase until your next calendar year.

Because sales cycles always work in the annual processes, everybody gets a quota and their territories and all those good things handed out. If you're closing a deal in the early half of the year, you've got some time to figure this out. If you're closing it in the last half of the year, you have to make a real quick decision.

Do it like in the first of the year, if I'm closing a deal on Q4, that's awfully tight. Can I do everything to merge sales forces together or do I have to wait a whole year? And so, this drives some pretty big strategic thinking that you have to think around: do we keep the sales forces separate for 18 months? That would be kind of extreme.

And so what does that mean for the joint sales team? What does that mean for customer experience? So you have to think about these very early. What's best for you from the customer's perspective? What's best for you from your revenue-driving perspective? And then how fast can your systems and tools adapt to do that?

Some companies I've seen, have amazing, great onboarding processes so that they could actually take a company in Q4 and map it all in and have it all together and then have joint sales in one quarter. 

But for most companies, this is not a core set of competencies and I think it takes a little bit of time to build up the tools and the people, and the know-how to do that.

SPIF

A SPIF is a cash incentive paid out as the two sales forces work to close a deal jointly. For instance, the existing sales team and the inbound sales team created a joint opportunity and closed customer A. 

Then both sales teams get their regular commissions plus a cash incentive on top of it. And that does work depending on the size of the transaction and the volume. Sometimes, SPIFs work well. 

If they are large, curated deals, it's hard to set the right SPIF because some of these deals could be very expensive or very lucrative from the sales perspective. And so, you have to figure out the right incentives. 

A good sales partner is extremely important, where you can sit down and plan your strategy. I've also seen double compensations work. So if the inbound team and the host team both sell products, they both get each other's commissions. That's a very bold move because it's pretty expensive.

That's a lot of costs to acquire customers, but once you've acquired those customers, then you can upsell and other cross-sale opportunities, so it's definitely something to consider. 

Customer focus planning

You need to reach out to all customers immediately and tell them you are excited, as soon as the deal is closed. Sets expectations regarding existing transactions - are they continuing or changing? 

It's important to communicate that it's business as usual because you want your customer base to have good security. And in every transaction, it's also important to have both companies call down on key accounts and do that personal outreach. 

It's also nice to see both salesforce call a customer at the same time to let them know they are working together. And then just really be transparent and open with the customer base. 

Mechanical parts 

I have done over a hundred transactions and I have never seen two companies have a complete one-to-one mapping, even on something as simple as the customer name. 

Both companies must learn how to use the same customer name, language, and quote-to-cash tools. Chances are, the two parties have very different systems, tools, and processes that need to start operating as one. 

For instance, a customer named Boeing. There could be Boeing, there could be The Boeing Company, there could be Boeing Inc and their Salesforce systems. And each one of those three would be a very valid customer and customer identifications. 

But you now have to map the host companies definitions with whatever the target company used. And that's like a general deep mapping exercise that you really have to have so that you're using the same language and talking in sync. 

And in some cases, you may have different contacts within the company, and that's great and fine. Still, you may have two different ways of calling the company in your internal sales tracking systems that you need to ensure alignment. That's also the first step. 

Then, at some point, the inbound contracts will merge with the host company's contracts. So there's a contract conversion period of time that you have to think about moving off the inbound company's paper to the host company's paper. 

No acquiring company has ever been happy with an inbound company's terms and conditions and things like that. Because frequently, it's a bigger company with a smaller company. And the bigger company has a different set of risk criteria or profiles. 

So you must start aligning those key mechanics around how you work with a customer and setting those principles up very early. And then you have to think about when you make sales, when you start converting the customers over to your paper. So those are bigger nitty issues.

Sales team

At the front end, it's like a three-legged sales call. You have two salespeople going in together and jointly working with both products and both jointly pitching both products at the same time.

So you almost have a double team. And until you get to a common quote system, a common lead-to-cash quote in a fulfillment system, you have to operate that way. 

You have to be very thoughtful about those because you will have to merge those two systems, along with tools, processes, and approvals. 

Most of the time, it usually is the host company's tools. What I have also seen some unique ways which the target company engages with customers, and I'm very open to borrowing that. But it takes some time. 

However, you want to move as fast as you can. And the key piece is making sure that you identify dedicated resources for the transition from both teams. The challenge is that operational teams have often leaned forward to get as efficient and financially physical as possible.

And so, you have two very lean teams trying to do three things at once. So often, that requires investment, resources, and teams to do that work. If you're a serial acquirer, that's a core competency that you want to build up, and you want to have an onboarding team that does that and thinks that through. 

And in some very high-level cases, you should have an onboarding team that constantly thinks about how to take in companies and bring them into their systems incredibly fast so that transition goes quick. That's a key piece, mainly if you're making a lot of serial acquisitions of companies with inbound revenue streams.

Expectation vs Execution

It starts out in theory. And then it's always hard to prove until you've done the first few deals and transactions, and then everybody sees how complex it is. So it's important to do post-close reviews. 

• How did things work? 
• Where could we have done better? 

Those are incredibly instrumental in building the case for investment for future core infrastructure teams. And then for the first few times you do it, you have to think about building repeatable processes. 

Retaining knowledge

There are two things there. First, if you're investing in a series of program managers, engineers, and systems analysis people, you can also keep that team for key business transformation efforts. 

Sometimes you're upgrading your core back in the ERP systems. So that's the same team. You can use that same team, that same knowledge, that same skill set. That's one way to help justify it when you're not doing a lot of deals.

The other way is tabletop exercises. We ran quarterly deal scenarios. We picked a company that we thought was interesting. Often, the first one I recommend is picking a softball just to run through the process and make sure you figure out how it can work. 

Testing for sales readiness

There's an interesting intersection because product management often drives these kinds of ideas or transactions. So in some ways, that's like in theory, adding these two teams together will be great, but in practice that may not be so hot. 

They just have different sales actions or work with customers differently. I think it's a really good opportunity. And this is something I've talked about to other people. It doesn't hurt to partner with these types of companies beforehand. 

Because if you're partnering and then you're doing joint selling, then you're doing joint customer engagement. 

And if you're partnering and you're working well and your customers like working with both of you, that's a pretty good sign that you'll not have that friction. 

Or if you can't partner, then you start looking at which customers do we know both teams are working in already. 

Building the GTM integration team

Have a dedicated group of people. And the reason I say for go-to-market, you need to dedicate it from the strategy perspective. And then you need to think about defining that interim execution plan. And then they need to understand the company’s systems in-depth so you can know what you can do in flex.

And then I'd say the whole other area here is the lead-to-cash generation component, which we haven't talked much about. Again, it's the marketing side.

• How do they reach out and contact the customers? 
• Is it sales conferences? Is it onsite visits? 
• What drives the sales motions there? 

It's important to understand it because both marketing machines need to work well together and not send mixed messages to customers. You also have to ensure that the inbound team and the host team are looking at each other because often you still have two websites, two sales conferences and you may even have user groups.

So it's us instead of them plus us; it should say WE. And then the other piece is you need to cultivate a series of subject matter expertise in each domain of the entire value chain. 

There is a lot of eagerness to do the right thing, and you have to have a sense of optimism because you want to keep people working towards it. But at the same time, you have to inject a sense of healthy skepticism.

Those are nice ways to ensure there aren't surprises or get a little more detail around it. I think it is really important. The devil is in the details, and you have to have those people that can answer them really quickly or you have to come back and test with tabletop exercises. 

Tabletop exercises

There are two levels of tabletop exercises.

One is like a high-level deal capacity. Do we want to do deals this way? And then the other kind is to exercise in an extreme, certain work stream or a certain set of processes. So both of them have their cases.

The best way to do this is to create a fake company and assume we will buy it. I usually give it a code name and everything else, like the product and basic high-level things you get in an early due diligence session. And then we're going to dry-run the deal. 

• What information would you need more of? 
• Where do you see immediate risks that would give you concerns? 
• Where do you see easy things we could be doing? 
• What do you do about those? 
• How does this work? 
• Do we set up a meeting where we have these conversations and what would that agenda look like? Those things. 

Often, we would test core assumptions. Some companies acquire technology and shut it down and then refold it in. 

• What would happen if we didn't shut it down and we wanted to keep the product in market for a period of time? 
• What would happen if we did three deals at once and we wanted to integrate it into one product? 

The other one would be more of the go-to-market function in particular. So we're buying a subscription product. It's billed annually, and it has these kinds of add-ons that can be done in those kinds of structures. And maybe those are things that you just don't do. Ask that question. 

• How would we build the systems? 
• What would it take to build those systems? 
• What would break if we did this? 

So create fictitious companies, and be very careful because sometimes those can create internal rumors. 

Don't make them look too much like one company because everybody likes to figure out if that is a real deal or not a real deal.I insist that there's always a new practice rewritten or a new process or a new set of functions that we need to develop or create by doing these exercises. 

People Involved in Tabletop Exercises

For the core ones, I usually bring in my cross-functional leads. They're usually the directors of the different teams. Although in some cases, they volunteer their junior members because it's a good way for them to get up to speed without having to do a deal. So it can be both ways.

Bring in the domain experts if you're going into a deep area of joint lead past or any of those things, and I don't make those plays super long. I usually set up a hypothetical situation and give people a day or two because it's a simulation of a potential acquisition to internalize whatever it is.

And then one or two working sessions that are maybe an hour or two where we pick at something, go at it, figure it out, write up some action items, try to build some artifacts, and maybe meet back in a couple of days to finish those artifacts or test them out and then, move on. 

So I don't want to take teams out of the field for very long at all because I think it should be something that you can do maybe over this course of two weeks. 

Usually, the first meeting is a couple of hours because you're laying out the case, you're laying out the pieces, and there's usually a good set of Q&A that either you have the answer or you have to make up on the fly so that everybody knows what the rules are. 

You then have a couple of working sessions and then a couple of circle backs. I don't like putting people in a room for a week and then coming out with something. That's just too disruptive. 

Best Advice

Remember your customers. Always think about what you're doing to the customer. That is the most key thing. And your internal difficulty should not be exposed to the customer. There may be duct tape and baling wires, you stitch all these things together, but the customer should never see that.

‍