Agents Decoded: Don't fear acquisitions (even when it's Zillow)
When your favorite company or tool is acquired, it's normal to have concerns — but try to set your biases aside instead of running for the hills.
The direction of your business depends on decisions you make every day. Agents Decoded can help you by presenting the perspectives of seasoned pros who have been there, made mistakes, and found success.
The recent announcement that Zillow Group was acquiring the much-beloved customer relationship management system Follow Up Boss was met with mixed reactions.
This should come as no surprise. Almost any acquisition in the real estate space is likely to spur a variety of reactions — especially when it involves a company real estate professionals have strong feelings about.
But mergers and acquisitions (commonly referred to as M&A) are inevitable in a rapidly evolving and growing industry, like real estate. Zillow is certainly not the only company heavily involved in M&A. Franchise and brokerage mergers happen almost daily, some large, some just two sole proprietors. Tech companies, from startups to long-established businesses, are frequent targets or sources of M&A.
As a former employee of Zillow, I was there during the acquisitions of Trulia, dotloop, HotPads, StreetEasy, Moretech, Retsly, BuyFolio and more. Prior to my career in real estate, I was involved on the other side — working for a large semiconductor manufacturing company that was acquired.
Those experiences taught me a few things that have held true for every M&A I've been a part of.
Why M&A happens
Companies consider a merger or acquisition for many reasons, such as audience or market expansion, or developing new lines of business. M&A can be a terrific accelerant, allowing a business to rapidly accomplish something it may have taken years to achieve on its own. In some cases, it's a pure talent play — a way to gain specific people or skill sets and experience that will complement the existing business.
Any company considering an acquisition should expect reactions from its existing customer base and the customers of the acquired company. Trust me, there will be feelings.
For many customers, the reaction will be, "Meh, no big deal. As long as I still get the product I'm paying for, this means little to nothing." Some will see it as a positive move — a way for their favorite product to get more resources and talent, and become even better.
Then there is that subset of customers who will despise everything about the acquisition.
This is typically driven by emotions — fear, and to a lesser extent, uncertainty — and emotions are very powerful influencers. You may have an extreme dislike for the acquiring company, leading to an understandable fear that the company or product you love (or at least tolerate) will be transformed in a negative way.
The best thing you can do in this situation is to try and set aside your biases and avoid making knee-jerk decisions. There's no need to cancel your subscription, abandon the product or run off to find a new solution to integrate into your business. Just wait. You may find your initial thoughts of gloom and doom are unfounded. Perhaps you'll love the additional features that come to the product or service you're paying for. And you will have avoided the pain, frustration and cost of seeking out a replacement.
Customers may not consider how a M&A affects the employees of either company, but they should. M&As done wrong can have a profound impact on employee morale and attitude, which of course can ultimately impact products and services.
On the other hand, an M&A done well can have the opposite effect and hence improve productivity.
As with customers, employees on both sides of an acquisition are likely to experience FUD — fear, uncertainty, and doubt. A well-targeted and managed acquisition will ensure the companies have complementary cultures. This is where a company with experience in acquisitions can stand out. Their executive and management teams understand how to examine and combine company cultures, helping to ensure a smooth transition.
It's never as bad as it seems
I've experienced acquisitions as an acquirer and acquiree. Having worked the front lines on both sides in human resources and industry relations, one thing I've learned is that the initial fury recedes. The FUD subsides. Once customers and employees step back and take a breath, the vast majority will find the acquisition wasn't nearly as bad as they thought it would be — and often they will find the opposite.
Acquisitions can be a good thing for both companies, their employees, and their customers.
Jay Thompson is a former real estate agent, broker-owner and industry outreach director. He is currently an industry consultant and sits on several boards. The views expressed in this column are solely those of the author.