Immediately after close, the first company’s pricing policies were extended to the whole of the merged entity, and sales training initiatives were launched. When two large consumer electronics companies merged in 2017, for example, they soon realized that one of them followed rigorous pricing and discounting policies while the other gave sales reps discretion in deciding discount levels, holding them accountable only for a floor price. But mergers can be the perfect catalyst to inspire a broad-scale capability upgrade across commercial activities. However, they rarely quantify the opportunity, perhaps because it materializes only when there is a clear capability gap between the companies involved. Merging companies often cite the transfer of commercial capabilities and sharing of best practices as a source of revenue synergies. Capitalizing on the combined company’s R&D capabilities and developing new products-whether line extensions or innovations-is a longer-term option and is central to the rationale in some deals. Rebranding can be helpful if either company has strong equity with a particular customer group.

Bundles and solutions can provide quick wins by enhancing cross-selling to existing customers and attracting first-time customers with a more complete offering. Creating new bundles and solutions, rebranding products, and developing new offerings represent a second source of revenue synergies that can offer promising returns. Visit our Organization & Capabilities page McKinsey’s Global Capability Survey of 1,600 executives, our survey of M&A executives, past-deal performance analysis, in-depth interviews, experience serving hundreds of clients on this topic.įrom these sources, we learned that there are seven practices that matter: To find out what it takes to be successful, we drew on detailed research, analysis, in-depth interviews with leaders who have been successful in capturing revenue synergies, and our own extensive experience. Nevertheless, a few companies seem to have cracked the code. Please email us at: is it so challenging to realize revenue synergies? The executives we spoke to cited a number of difficulties: setting realistic targets, changing salesforce behavior, executing across functions, measuring financial impact, and getting the organization to focus on the right things. If you would like information about this content we will be happy to work with you. We strive to provide individuals with disabilities equal access to our website.

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