How to Retain Customers After a Business Sale

A common concern for a buyer of an existing business is customer retention after the business changes hands. It's normal for a business to see a small shift in customers when ownership changes; however, there are different things you can do to minimize this or kick marketing into high gear to replace that lost business ASAP. This should be considered before the closing, and a plan of attack of how you will combat it should be in place before you take over the reins to the business. 

 

Let Customers Know About the Sale After Closing

Whether or not you need to let the customers know that there is a new owner in place will vary greatly, depending on the business, the industry, or business type. For example, if it’s a retail store, it’s probably not going to matter to the customer too much who the owner is, as long as it still stocks the products they are looking for and the processes stay relatively similar. However, in a business that is more business to business, and there are long-standing contracts in place, then that is a different story. You will have to let those customers know about the new ownership and how you decide to do that will be critical. Whether or not you choose to let the customers know that there is new ownership, one thing is for sure: however you decide to announce the news, it should happen after closing, and not before.

Confidentiality is very important to the seller and should be to the buyer of a business as well. If customers find out that a business is listed for sale or if they discover that a sale is imminent, they could very well get nervous about what’s going to happen when a new owner takes over. Will the level of service change? Will prices increase? Will the business still be the same? Weary consumers will jump ship and look for somewhere else to take their business to. This is not a good outcome for a seller or a buyer. Both parties want to make sure that the customers stay put. In order to do that, you need to have a plan in place on the best way to communicate the change of ownership after the closing takes place. 

 

To Keep the Status Quo or Not

If the business is running like a well-oiled machine and customers are generally happy, the best thing a buyer can do is just keep things the same and maintain consistency for the first month or two. At this point, you are drinking from the firehose anyway, just trying to learn everything you need to know about running the business. So, keeping things as-is is a great strategy from that standpoint as well. As the new owner, you might be itching to make changes, but you need to take a step back and observe the way things are working now, so that you can make the most informed decisions about changing things. Employees and customers alike will appreciate the continuity, as least in the beginning. If you immediately change things, like pricing or processes and procedures, you might scare some customers away right from the start. If you plan on making changes, you will want to let your customers know about those changes as needed. For example, if you are going to go from paper invoices to an online invoice and payment system, that is something you will need to introduce to your customers and explain how it is going to work moving forward. If the business was operating smoothly, then introduce changes slowly. Let your customers get used to them, and work to make sure they are happy with these changes before piling on more. However, don’t hold back with going above and beyond what the former owner was doing. Making an extra effort is always appreciated and you might want to do that first, in order to win your new customers over, before making any changes that might be perceived as “negative,’ such as pricing increases.

If the business is a mess and was being run very poorly, then the customers will probably welcome any and all changes as soon as possible. So, feel free to clean things up immediately to start getting that business back on track. Communicate with the customers to see where they would like to see improvement, and then deliver on that. Chances are that they will be very excited to see you come in and make things better, and this will make them much more receptive to change. Every business is so different, so you really need to feel things out first, and then go in the direction of your customer feedback. 

 

Warm Introduction from Seller

In most cases, having the former owner introduce the new owner to the customers after the closing is the smoothest way to handle this transition. If the customers trust the seller, then the “circle of trust” will hopefully continue with you at the helm once the seller gives you their endorsement. Of course, you will need to prove yourself to be just as good or better than the previous owner, but this introduction allows the customers to meet you face to face, and you can begin building that personal relationship with them. People do business with people they like and trust. That takes time to build, and actions definitely speak louder than words. So, work hard to impress them with the job you do for them moving forward. 

 

What if the Seller is No Longer Around or Has a Bad Reputation?

There are definitely cases where a buyer purchases a business from a seller that is struggling, the seller hasn’t done a good job building those relationships, or there is not a lot of trust between the customers and the former owner. This is a much tougher obstacle to overcome, but there are easy ways to tackle it. The new owner has to build a positive reputation with their customers. In the case of a business sale like this, you will want to make it known that the business is under new ownership. However you reach out the customer base to do this will vary from business to business. Maybe it’s a banner outside, maybe you send out an email to your database of customers letting them know about the change in ownership and give them an incentive to keep patronizing your business, or in the case of a B2B business, you will want to make personal visits to your customers to introduce yourself to them. Maybe bring them some gifts like promotional/branded items or a box of doughnuts for the office. 

However you react out to your customers to introduce yourself to them, you want to make sure they understand that you are the new owner, and that the old owner is completely gone. Be ready to explain how you will do business differently and elaborate on aspects of the business that will be improved upon. Ask them what you can do to make their experience better this time around. Tell them you would appreciate the opportunity to earn their business. You want them to give you a chance, and if they do, you’d better dazzle them. Make sure you deliver on promises made and that you live up to the ways that you pledged to be better. Put their feedback into consideration, and make sure that you’ve addressed it. People want to know that they’ve been heard, so make sure it’s obvious that you’ve listened and you’ve taken action. It’s going to take some work on your part to turn around a negative reputation, but it’s definitely doable. Stay positive, and just do your very best. Caring to go above and beyond will always pay off, so keep doing the right thing by your customers, and the rest will fall into place.