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What do you do if the vendor of one of your martech solutions gets bought? An acquisition can change many things, including price, customer service, contract enforcement and more. Here are 10 things that will prepare you to be proactive in the case of an acquisition.
1. Know what you need and why. The most important thing is to understand why you are using the solution in the first place. What are the use cases for it? Will it continue to fulfill those needs?
“It’s always use-case driven and we all need that reminder, even if we know it,” said Milton Hwang, a strategic consultant and program leader for Kellogg’s Graduate School of Management. “Protect yourself by really knowing why you picked something to begin with.”
2. Look out for promises. Company A bought Company B for a reason. Usually, it’s to improve existing technology or move into a new space. The buyer will likely tell you why the two will work well together and provide you with something better than ever. Even if true, this should be taken with a grain of salt.
“The combined company typically promises quick synergies,” said veteran marketing technologist Steve Petersen. “However, those typically take years to materialize.” Don’t let the potential end product decide what you need to do.
3. What technological changes are expected? Find out what they expect will change in the solution and when. How will the change affect the existing martech stack?
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4. Contractual obligations. Your legal team should review existing contracts to see if it has any “in the case of being purchased” clauses. Find out what happens to service-level agreements (SLAs), pricing terms and licensing agreements. Are there exit clauses in case of dissatisfaction? Also, research how the buyer differs culturally from the original vendor.
“Sometimes the acquiring company is stricter about contract terms,” said Petersen. “I’ve heard that Marketo was rather chill about the size of lead databases, but after Adobe purchased it, Marketo database sizes defined in contracts were enforced far more strictly.”
5. Pricing. This is another place where it will help to know how the buyer differs from your current provider.
“Find out if there’s a major difference between the buyer’s preferred pricing and licensing approaches and try to forecast whether or not you’re headed for change,” said Hwang. “Is the buying party more of a per-user traditional, SaaS licensing model or does it use more of a per-utilization one?”
6. Customer support and service. This is where you can expect to see changes first.
“Assume account rep and sales turnover is the first thing that’s going to happen,” said Hwang. “Hopefully, there’s not as big of a change immediately on the customer-support side because those folks are more tied to the product solution than to sales.” Even so, you need to ask about customer support continuity. Will there be changes in response times, support channels, or account management?
7. Product roadmap. Assess the future of the martech products. Will there be enhancements, new features, or discontinuations? How aligned are the product roadmaps of both companies? Hwang said this is why you should always keep an eye on the vendor landscape and try to anticipate likely changes and their impact.
“When Adobe acquired Marketo, I had zero concern in the first year about a roadmap change,” he said. “Why would they disrupt what was working? They did this to get into this automation space.”
8. What else is available. Another place where knowing the vendor landscape is helpful. You should have some level of knowledge about other martech providers in case you need to change solutions.
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9. Vendor lock-in. Speaking of changing solutions, carefully evaluate the risk of vendor lock-in. If the acquiring company decides to sunset a product, how easy is it to migrate to something else?
10. Data security and privacy. Understand how data security and privacy practices will be maintained post-acquisition. Will data handling policies change? Are there any risks to customer data?
One of the things that will help you most in this situation is still being an operator at some level, said Hwang. “Maybe you got a whole team managing it, but once in a while, jump in there and turn some of the wrenches and whatever,” he said. “That’s the secret because then if you’re higher up on the leadership team, you personally will be able to then weigh in on the impact, instead of just gathering impact input from other people.”
