How to keep customers after you buy a business

Customers didn't choose you. They chose the company, and often the person who ran it. When they hear it has been sold, some will wonder whether the service will slip, whether prices will rise and whether the people they know will still be there.

Many will stay if nothing they care about gets worse. Your job in the first year is to make sure it doesn't, and to let them see that.

Decide what you'll say before anyone says anything

Agree on the plan with the seller before closing: who will be told, in what order, by whom and with what words.

Tell employees first. Customers will ask them questions, and an employee who learns about the sale from a customer is a problem you've created for yourself. Our post on keeping the team after you buy covers that conversation. Give the team a short, consistent answer to the question they'll hear most, "Is anything changing?", so customers hear the same thing from everyone.

How to announce the change

Match the announcement to the customer.

Your most important accounts should hear it in person or by phone, ideally from the seller and you together, before any letter goes out. These are the customers whose loss would hurt most, and they deserve a direct conversation.

Everyone else can get a short letter or email, signed by both the seller and you. It should say:

• who is taking over, and that the seller chose you;
• what stays the same: the people, the phone number, the service, the prices;
• anything that does change, such as where to send payments or a new name on invoices;
• how to reach you directly.

Here's an example to adapt:

"After [number] years, I've decided to pass [company name] on to [your name], who will be running it day to day. I chose [first name] because I'm confident they'll take care of you the way we always have. You'll see the same faces and reach us at the same number, and your service and pricing aren't changing. I'll be working alongside [first name] for the next few months, and you're welcome to call either of us anytime."

Some businesses don't need a formal announcement at all. A shop or restaurant with walk-in customers can let regulars hear it in conversation. What matters is that nobody important feels they were the last to know.

The seller's introductions

The seller's relationships are one of the most valuable things you bought, and they only transfer while the seller is still around to make introductions. Use that time well.

Make a list of customers to introduce, in order of importance, and work through it in the first weeks: joint calls, joint visits, a coffee or a lunch. The seller saying "I trust this person" to a customer they've known for fifteen years does more than any letter can.

Before closing, put in writing how much of the seller's time you can count on, and for how long. Our post on earnouts, holdbacks and transition agreements explains how that help is usually set out.

Keep service and prices steady

For the first several months, the safest plan is for customers to notice nothing except that the company is still good.

• Keep the same people on the same accounts. In route businesses like pest control or pool service, where technicians visit the same customers on a regular schedule, the customer's relationship is often more with the technician who comes every month than with the owner.
• Answer the phone the same way, and at least as quickly.
• Honor what the company promised. Existing quotes, service agreements, warranties on past work. Check what your purchase agreement says about who pays for warranty work on jobs done before closing, but treat customers well either way.
• Hold prices for now. If rising costs truly force a change, tell customers early, explain why in plain words and don't hide it in an invoice.

Changes you'd like to make, even good ones, will land better once customers have seen a few months of the same service under you.

Handle payment changes with care

If you bought the company's assets rather than its shares, you'll probably have new bank accounts, and customers who pay by check or transfer need to know where to send money.

Be careful here. A message that says "our bank details have changed, please pay this new account" is exactly what payment fraud looks like, and careful customers know it. So:

• Tell customers about payment changes in your signed letter and, for larger accounts, by phone, not by email alone.
• Invite them to confirm by calling a number they already have.
• Tell them you'll never change payment details by email alone, and stick to it.

Check which contracts need the customer's agreement

Some customer contracts say they can't be transferred to a new owner without the customer's consent, and some let the customer cancel when the company's ownership changes, even if you bought the shares rather than the assets. Service agreements, government contracts and managed services agreements in fields like IT services or commercial cleaning can be like this. Your attorney should find these during due diligence (the checking you do before you commit). Where consent is needed, it's best to have it in hand at or before closing. Asking for it is also a natural reason for a personal conversation with the customer.

Watch the biggest accounts closely

If a handful of customers make up a big share of revenue, losing even one could change your year. Our post on customer concentration and other risks explains why this affects what a company is worth. After closing, it's simply where your attention should go first.

Make a list of your top customers by revenue. For each one, note:

• who the contact is, and who at your company serves them;
• when their contract or agreement renews, if there is one;
• anything the seller tells you about their history and preferences.

Call each of them yourself in the first month, even if the seller has already introduced you. Then watch for early signs of drift: smaller or less frequent orders, slower payments, a request for a quote that sounds like they're comparing, or their longtime contact leaving. Any of those is a reason to pick up the phone, not to wait.

Keep score

Add a few customer numbers to the weekly or monthly review you're already doing (our post on your first 90 days suggests one):

• the number of active customers;
• new customers and lost customers;
• revenue from your largest accounts.

When a customer leaves, call and ask why, politely and without arguing. Sometimes it's price or a move. Sometimes it's something that changed under you without your noticing, and you'd much rather hear that from the first customer who leaves than the tenth.

Customers tend to judge a change of owner by one thing: whether the next visit, delivery or phone call is as good as the last one. Make sure it is, every time, and the sale will soon be old news.