Other Factors

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to change their credit cards, but also used a call center to connect to their customers to communicate and maintain their customer relationships.

5.2.6 Organizational Inertia

Leadership style along with changes to salary and benefits may cause employees to show resistance through such behavior as sabotage, vocal protests, or attitudes such as withdrawal and reduced commitment. Organizational inertia can cause delay in responding to customer requests, deficiencies in services, and decreased efforts to understand markets and customers and to improve products and services.

Since Bank B and Bank C are foreign companies, they had different leadership styles and cultures than the local companies, therefore the employees of their target companies had to learn these changes. The Bank E and Bank D are official banks, so their employees work right were protected by the government, and their cultures being similar to their target companies, therefore their employees showed less resistances.

Therefore, this research concluded that these six factors were very important for maintained customer values and customer loyalty. Companies who grasped these six critical factors were able to merge smoothly and maximize customer value and competitive position.

5.3 Other Factors

From the interviews, this research also found two critical factors and four influencing factors that affect customer relationship in M&A process.

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5.3.1 Standard of Procedures of the Business Transition

Company based on M&A experiences to build execution plans for integration before the merger, and let every employee know what procedures they had to execute on the M&A. This helped ensure that the merger process went quickly and avoided problems in M&A process. This understanding of how to maintain customer relationships in M&A process helped avoid customer withdrawal due to company chaos and not enough time to provide better customer service.

The three cases we selected had institutionalization rules to provide better services to customers, but Bank E and Bank D did not, because they had flexibility in service offerings, so they thought the employees of target company just needed to learn their way, therefore their employees could not quickly to learn the new operation and could not provide complete services to customers.

5.3.2 Customer Care

Follow-up with customers helps to understand customer needs and to provide service to customers in order to achieve higher customer satisfaction. If company did not follow-up with their customers, the customers would withdraw from company because they would feel that the company did not respect them. Follow-up with customers after the merger could help customers stay and remain loyal to the company.

The representative interviewed from Bank A said “we only called who we thought to be more valuable customers for follow calls. Bank A would encourage Bank A1 customers to change their credit card to Bank A.” The representative of Bank C also said “due to every communication have different costs, so you had to call the

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customers whom you thought more valuable or dispatched someone to visit them.”

Thus we see these two bank performed customer segmentation then accorded different segments to do different promotions and services. They would find valuable customers to send notice letter and use phone call to provide preferential schemes in order to encourage customers used their credit cards. Bank B did follow-up for all their customers using the call center. The Bank E and Bank D did not follow-up with their customers because the credit card business was not their main business, so they only used newspaper notices and letters to maintain their customers. For instance, the representative of Bank E said “We did not do follow-up calls for customers of Bank E1, we just provided the call center phone numbers and did not take the initiative to follow-up.”

5.3.3 Strategic Purpose

The different purposes of bank mergers would affect whether companies wanted to maintain customer relationships. For example, Bank C merged with the Bank C1 to expand location of branches in Taiwan, but customers of the Bank C1 were not Bank C target customers, so Bank C did not want to maintain customer relationships of the Bank C1. The Bank E and Bank D had mergers for policy reasons in order to solve an over-banking problem and poor operations of banks. Therefore, they had to quickly integrate in order to avoid social problems. Because this merger’s purpose not obtain maximize profits and their employees only wanted to follow rules in order to let the merger go smoothly they did not want to maintain customer relationships. Bank B and Bank A had mergers to expand credit card market share in Taiwan, so they took a more active role in maintaining customer relationships.

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Whether there was support from superiors would also affect customer services and customer relationships. For instance, the superiors of Bank E were not familiar with the credit card business, so they did not spent too much time in this business. Bank C’s main business was in wealth management, so they did not spend much resource on customer services of the credit card business. The superiors of Bank D thought their credit card business had a low market share and was not very profitable, so they not want to spend time to maintain customer relationships. Therefore, we can see that their strategies were not focused on the credit card business, so there was little support from superiors. The business had not been promoted for a long time and there was no special team to maintain customer relationships. The superiors of Bank B and Bank A regarded the credit card business as an important business, so they would spend resources to maintain their customer relationships, and the results of the performance had synergistic effects of credit card business post-merger.

5.3.4 Customer base

The customer base size would affect whether the merger company would want to maintain customer relationships. If the target company customer base was too small, the merger company would not want to spend resources to maintain relationships. For instance, the representative from Bank E said “due to customer base of Bank E1 being small and the customer type being similar to Bank E and our major business was not the credit card business, so we not wanted to waste resources to maintain these customers.”

When the customer base of target company is small, the products and services are mainly adopted to match the acquiring company, and if customers were not satisfied with their products or services, the company just apologized to their customers, but

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did not changed their operation methods, therefore they did not care whether the customer stayed or not.

5.3.5 Brand Effect

Bank B and Bank C are global companies which gave them many advantages, such as strong brand effect of bank in credit card market, and a wide range of products and benefits, and even many branches other countries. The Bank A also had a strong consumer finance brand in Taiwan. Therefore, most customers based on these reasons wanted to switch their credit card to the acquiring company in the M&A process. The Bank E and Bank D are official banks so many people switched their account, based on this characteristics and because the customers did not worry about the bank going bankrupt. So we see the brand effect of bank had a huge impact for customers. For instance, the representative of Bank A said “brand is a major factor which people recognize,” and the representative of Bank C said “every customers had high expectations for the brand of Bank C at the beginning.”

5.3.6 Organizational Mindsets

The mindset of company refers to whether company change their service and attitude to obtain customers satisfaction. The mindset of employees refers to whether the employees relate the benefits or bonus to themselves to provide better quality service to customers. For instance, Bank B provided statements of account in global branches, but they chose localization to keep deposit books for their customers after merger at the Bank B1 in order to meet customer needs. The Bank D retained the valuable business of Bank D1 in order to satisfy customer needs and to let the superiors of Bank D1 be responsible this business, this could avoid faults occurred in process and let the knowledge pass down in organization. However Bank C only provided

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statements of account, not deposit books for customers after the merger with the Bank C1. Many customers complained that Bank C had not considered customer needs. The reason they did not want change their operation process of the globalized operation and did not want to spend more to provide this service. The Bank E and Bank D are official banks so their employees did not worry about their benefits had any change, therefore the employees did not care whether they provided good quality services for customers because this did not affected their performance appraisal on individuals. On the other hand, performances systems at Bank B and Bank C used individual evaluation, so employees cared whether they provided better quality customer service as it would affect their performance which affects their bonus and benefits. The Bank A and Bank B had performance evaluation systems, so if employees provided low quality services to customers that would lead customers to complain to the company then the employees would get bad performance rating which would affect benefits.

We think these factors would be implemented and considered in post-merger companies, not only this help the bank have more customer satisfaction, it can also help maximum returns and maintain their customer relationships in order to maintain customer loyalty.

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