What Happens When Your Customers Get Bought?

magnet customers

Mark Twain said, “History doesn’t repeat itself, but it often rhymes.”

Although lesser known, my grandfather said, “If you live long enough, you get to see it all come around again.”
I’ve seen a lot happen over the years. Just to give you some idea of the pace of change over the years: When I started this job our largest strategic partner was Blackberry.

More to the point, beyond seeing things happen, I’ve seen them happen again and again. And there are patterns if you know what to look for. In the last couple of months, I saw patterns in how one of my biggest clients was behaving.
I won’t say they were acting “strangely” because when you know what you’re looking at it’s not strange at all, it’s predictable.

I won’t bore you all with all the indicators I saw, but it covered a spectrum across their business activities.
I knew what I was looking at: they were preparing to be acquired by another company.

I said as much to my bosses: “They’re getting bought out. I don’t know by whom, but it’s happening.”
I could feel it in my bones. The only thing I didn’t know was who was buying them and what the implications of that would be for my business. That could have had a negative impact.

I didn’t have to wait very long. The other week, it was made public: they (who happened to be my third-biggest client) were being acquired by my biggest client.

That, at least, was good news!

Over the years I’ve seen more than a few of my clients get bought out by other clients of mine. In the cases where it was a small client, like a mom-and-pop operation in a small town, when a larger player buys their business and converts it to one of their branch offices that nets out positively for me. A larger client with more professional sales and management, more buying power, and more marketing dollars behind them typically means more order volume from the new owners than the old ones could produce.

Now, in situations like this one, where an already big client is bought by an even bigger client, the net results aren’t always predictable. Last fall, one of my other big clients (the fifth largest at the time) was acquired by my largest. Six months later, their results have netted out about even: the same as if they were still two separate companies, so there was no net growth to my revenue as a result of the acquisition.

Will the same thing happen this time? Maybe, we’ll see.

It’s not always clear-cut. It doesn’t feel that long ago, but it was pre-COVID, 2017 or so. A large US company came to Canada and went on a buying spree, buying up independent dealerships nationally to create a new Canadian subsidiary. That included my at-the-time second and third largest customers.

The impact on not just me in my territory but also the other reps’ territories led to some emergency phone meetings where we all asked, “Who are these guys?!” and “How do we make this work out to our benefit?” The answer to the second question was immediately apparent: Just do our jobs.

I already had a great relationship with my two clients who’d been acquired by this big American giant and made myself indispensable as a resource. Through the transition processes, I made sure we were right there, still indispensable. That made sure that the new management noticed us and the role we play as a main distributor for their Canadian acquisitions so that they recognized our value to them, maintained that distributor/dealer relationship, and (this is the important part) continued to help us grow our business with them over the years.

Back to this latest acquisition: Setting aside my own self-interest for a moment, I’m just glad that two of my favorite clients were able to come together. The people on both teams are phenomenal, and I’m sure my longtime contacts (friends, really, when we’ve known each other this long) will find places for themselves in the new organization. And I’m looking forward to seeing what the future brings.