Want to know the quickest way to abruptly end a discussion about a PR agency sale just after the conversation starts?
I’ve invested a lot of time and effort throughout my career in the public relations industry working with and mentoring both would-be buyers (and sellers) on how to approach an initial agency sales meeting. And I can’t even begin to describe some of the eye-opening scenarios I’ve encountered over the years.
Take a seller client of mine who once reported back on his first in-person meeting with the head of a prospective buyer company. The buyer had instantly launched into how he’d like to immediately change the focus and approach of the seller’s company. During this meeting, the buyer also waxed on about his own success, and the fact that my client should be chomping at the bit to become part of his firm. The biggest issue: not once during this meeting did the buyer ask the seller about his own company.
Despite preparation for an initial meeting between buyer and seller, some would-be purchasers tend to shoot themselves in the foot by expressing themselves in ways that can instantly turn sellers off. In my opinion, such buyers blow a potential opportunity of a lifetime given how they present themselves and what they say.
Here’s what not to do when trying to impress a prospective seller during an initial meeting:
Don’t ask the CEO of the firm you’ve brought to the table to discuss acquiring his firm anything about his business. A positive first meeting is vital to executing a successful deal, and simply extolling the virtues of your organization is a major turnoff to any prospective seller. Your job should be to put a seller at ease and communicate the strategic value of an acquisition.
Don’t turn a prospective seller off by being narcissistic. Make your first meeting a two-way street. Ultimately, it’s a buyer’s duty to take a deep dive into a seller’s firm and vice versa. Before the first meeting, do your homework and have an understanding of the seller as both a business owner and as someone with whom you can discuss family or any other topics/passions they may enjoy touching on during your initial get-together.
Don’t spend the first meeting telling the potential seller how fortunate he or she is to be considered as a prospective acquisition. “You’re so lucky that we are considering purchasing your firm,” isn’t going to lure a selling agency. Every seller is an entrepreneur and feels that he or she has built a good organization with blood, sweat and tears. Entrepreneurs take pride in their investment of time, money and effort, and they won’t accept the notion of someone swooping in and suggesting that all they have done is meaningless unless they sync up with this “extraordinary” buyer.
Don’t dismiss the concept of a strategic approach. When a buyer and seller meet for the first time, it must be a scenario involving reciprocal exchanging of information, with the most critical element being the chemistry between the two entities.
Don’t tell the selling agency how you plan to change the way they do business because “you can do it better.” I’ve seen this too many times: the buyer comes in and declares “this is what we’re going to do,” instantly rearranging staff positions and duties, changing the firm’s name and so on. The buyer believes that altering every aspect across the board is a better approach, often without discussing the plans with the seller.
I don’t recommend that any buyer tell a seller that “my way is better.” Keep in mind, the seller has worked hard to create a dedicated team, so the worst thing you can do is demotivate them and clean house. If staff on the seller’s side senses their lives will be made worse as a result of this acquisition, they’ll likely walk and start job hunting elsewhere.
Don’t be coy about where the funding is coming from. The seller is always interested in hearing from a buyer that the financing of a proposed transaction is secure and that the money is there. If a buyer hesitates on this topic and says “don’t worry,” then a seller won’t be that confident about moving forward.
The first meeting is the premise for a business discussion, and there are numerous questions a buyer should be prepared to answer at this time. All sellers want to ensure that anything they do is risk-free — or as much risk-free as possible — that funding is there and they won’t have to worry about how the earn out will be handled in the coming years.
Don’t demand an agency-name change off the bat. A would-be buyer should understand that the selling agency takes pride in the name of his or her firm. If you march in and tell them that you want to integrate immediately, swallow their firm wholly, they’ll be turned off. Simply absorbing their agency into your operation is the wrong approach.
There are many reasons why a seller prefers to hold onto its name for a reasonable period of time. All deals are predicated on performance, and you’re giving a prospective seller a tremendous handicap by suggesting so many big changes in such a short period. Be cognizant — and supportive — of this fear when meeting for the first time.
Don’t outline the formula you use to make acquisitions without fully committing yourself. One way to make a bad impression is to be underprepared for a first meeting by not bringing along a strong game plan. Your formula and strategy should demonstrate your overall vision without appearing to be vague — and it should emphasize specific areas where you see synergies between the two agencies.
Your goal for an initial meeting should be to impress the seller, keep them interested in learning more and show your full commitment to your proposal.
Don’t focus entirely on your firm; be a good listener instead. When meeting a potential seller for the first time face-to-face, your goal isn’t immediately to sign on the dotted line. Instead, you should work to get to know the selling agency, make them feel comfortable about selling their business to you, and most importantly, listen carefully and respectfully to their concerns and questions.
Show the seller you care by simply listening. You don’t want to come across as an aggressive, hungry acquirer who wants to take over their company, but rather a supportive, caring partner that can bring mutual success to both entities.
First impressions matter
The best initial meetings I’ve attended between would-be sellers and buyers are those where the two parties are almost tripping over each other’s words. They share hope and a common vision for what each firm can do for the other.
The purpose of an acquisition is to combine forces with an organization that can help a seller grow and prosper; it’s a positive blending of both capabilities and talents.
How buyers express themselves at a first meeting will ultimately define the relationship moving forward, and whether or not there will be further discussions. So, remember, first impressions really do matter.
Art Stevens, APR, Fellow PRSA, is managing partner of The Stevens Group consultants to the PR agency profession, focusing on mergers, acquisitions and management consulting.