During mergers and acquisitions, customer experience often takes a back seat to legal, financial and operational work, leading to disgruntled customers and destroying value, experts say.
That’s because CX is rarely included in the planning process.
“They don’t consider customer experience until the customer is already feeling it,” said Jeannie Walters, founder and chief experience investigator at Experience Investigators. “They just forget about it because CX doesn’t have a seat at the table. So, customers are left with all this chaos.”
When companies are pressured to integrate quickly, they often underestimate the complexity of integrating customer data, technology and operations. They also make assumptions about what matters most to customers without properly evaluating them.
That’s why businesses should take an “experience-first approach” to ensure that integration decisions are anchored against customers’ priorities, said J. Neely, global lead for Accenture’s mergers and acquisitions practice.
“Brands should avoid assuming that what worked for one business will automatically work for the other. Even when products or services look similar, customer expectations, service norms and emotional connections to the brand can be very different,” Neely said.
But the biggest mistake is starting the integration process after the deal closes, experts say.
“The strongest acquirers think about integration while they’re still evaluating the deal because early decisions shape everything that follows,” said Daniel Friedman, managing director of the transactions and integrations sector at BCG.
Poor planning can also hurt the bottom line. More than half of M&A deals destroy value, according to BCG. That’s largely due to employee resistance and, in many instances, ballooning service costs as contact centers field calls from unhappy customers.
Loyalty programs and accounts
Loyalty programs are the most common failure point, experts say. That’s because loyalty program integration is inherently complex and directly impacts both customer value and trust.
“Combining loyalty programs means bringing together different customer databases, points systems, membership tiers, benefits, technology platforms and policies, all while making sure customers clearly understand what is changing and don’t feel they are losing value,” Neely said.
Walters pointed to Marriott’s acquisition of Starwood Hotels as a clear-cut example of loyalty integration gone awry. After the deal closed in 2016, members had to use both loyalty programs and keep track of their points for nearly two years. They often didn’t know which program they needed to use for each property.
“It was insane,” Walters said.
Conversely, when Hilton acquired Graduate Hotels, it quickly integrated its new members into its Hilton Honors program but largely allowed Graduate to operate the same way it always had, ensuring that customers continued to get what they expected but with a more expansive rewards program.
Other account issues, such as service plan changes, pose challenges as well.
“Customers may need to move accounts, navigate updates to loyalty programs, or interact with new support teams and service channels,” Neely said. “So, it’s important to minimize disruption through clear communication, careful planning and a deep understanding of what matters most to customers.”
Streamline operations with customer journeys in mind
M&A teams often identify redundant departments to streamline the newly combined organization, but they don’t perform similar analyses for customer communications or policies, leading to countless headaches.
“What makes these challenges difficult to overcome is that they span multiple parts of the business at once,” Neely said. “A change designed to simplify operations can easily create friction for customers if the impact on the customer journey is not fully understood.”
That’s why it’s important for businesses to pay close attention to customer feedback during the transition. But many companies freeze their voice-of-the-customer programs during integration, blinding themselves during the highest-risk period.
“That’s where you need it the most,” Walters said.
The organizations that navigate M&A most successfully start by identifying the moments that matter most to customers and designing the integration to maintain trust and minimize disruption.
“They use customer data and insights to anticipate pain points, test changes before rollout, communicate clearly and transparently, and take a phased approach where appropriate,” Neely said. “This helps ensure customers experience the benefits of the merger rather than the complexity behind it.”
People and culture
Integrating people and culture is often the most challenging aspect of M&A, as emotions can run high.
“M&A leaders have a tremendous amount to manage. They have to integrate operations, systems, finances, customers, and talent — often on an aggressive timeline,” Friedman said. “As a result, the people side of the integration can receive less attention than it needs, even though it’s one of the biggest drivers of long-term success.”
While this impacts everyone in the organization, smooth integration is especially important for frontline employees, as their frustrations can permeate how they serve customers.
Culture is particularly challenging, as seemingly similar brands can feel very different.
“Even when a deal makes perfect strategic and financial sense, differences in decision-making, communication styles and ways of working can create unnecessary friction if they’re left unaddressed,” Friedman said. “The companies that navigate this well don’t assume culture will sort itself out — they make it an explicit part of the integration plan from the outset.”
Taking a one-size-fits-all approach is another common pitfall, as employees’ experiences may vary, depending on their role and organization. So, both the integration strategy and communications must be tailored.
“Winning employee support is just as important as executing the operational plan,” Friedman said. “People need more than timelines and milestones — they need to understand what the change means for them personally.”
Ultimately, however, it’s important not to lose sight of the fact that M&A should result in an improved, unified customer experience.
“It’s about maintaining customer confidence throughout the transition and ensuring customers see the merger as an improvement in their experience, not a source of disruption,” Neely said.
