With the cost of money low and the competition for deals high, revenue synergies are playing a bigger part in the rationale for acquisitions. In this episode of the Inside the Strategy Room podcast, three McKinsey experts discuss the challenges involved in capturing revenue synergies in mergers. In their conversation with Strategy & Corporate Finance communications director Sean Brown, partners Alex Liu and Nikolaus Raberger along with associate partner John Chartier share the key findings from their recent research, featured in their article, “Seven rules to crack the code on revenue synergies and M&A.”
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Many companies make general assumptions that through a merger they will increase penetration or market share, but they don’t combine that top-down thinking with bottom-up, customer-level validation.
The best integrators build their plans with the salesperson in mind. The plan is developed not only in the board room but in the strategy department and in the commercial department.
Developing the leading and lagging indicators may sound straightforward but there is some art to it. The leading indicators especially require thinking through the selling process and tagging the right up-front behaviors.
