Fine Tune Success Story: Private Equity Client
A few years ago, our firm got some big news about one of our larger clients: they had been acquired by a large private equity (PE) interest.
It was an alarming announcement
We knew we had done great work over the course of many years for this client, but we also knew all of the following:
- Some—and perhaps many—of the people we had worked with through the years of our engagement would turn over. Not only did we really like our contacts here, but they had seen us in action during high-stakes, critical moments; they had a long-term view of our value.
- The PE company might view us as an easily eliminated cost, rather than the cost-reducing and productivity-enhancing solution we really are. We hoped we’d get a chance to tell our story and share the true value we provide, but we weren’t certain this would happen.
- The PE entity has its own expense-management personnel and may think they can duplicate what we do, in-house.
There was also a potential upside
The buyer owned interests in many other attractive prospects for our services. If we could successfully convey our value and the uniqueness of our solution, perhaps we could emerge from this event a winner. It was nerve-wracking, but also exciting.
It didn’t take long for the new powers-that-be to request our presence at their headquarters for a meeting. We prepared for a grilling, and that’s exactly what we got. The questions came rapid-fire:
- What have you saved us, historically, and what value do you continue to deliver today?
- What do you know that we don’t know?
- What can you do that we can’t do?
- We have immense buying power and believe we know how to find “rock bottom” for pretty much anything we buy. Why are we wrong in the areas you manage?
We had good answers at every turn, and the truth was on our side. We emerged from the meeting hopeful we had passed the test, but still concerned that despite our best efforts, we may get squeezed out.
Fortunately, our contacts at the client—from buyer to executive, and from environmental to accounting—backed us up. For example, we heard: “These people do great work,” and “Fine Tune is a trusted advocate and we don’t want to lose them.”
But before long, those long-time contacts were leaving the organization.
As is often the case after an acquisition, there came a wave of change; retirements, departures, reassignments and the leaning out of departments all conspired to leave us with an almost entirely new set of contacts.
We were, in many ways, starting from scratch and selling ourselves all over again.
Four years later, we’re expanding within the portfolio
To make a long story short, not only did we manage to survive the acquisition, we’ve actually extended the relationship, put a broader deal in place with the new ownership, and secured several new clients from among the PE portfolio.
Since our founding in 2002, this story is often shared internally among team members and, frankly, one of our firm’s proudest accomplishments.
Why did we survive—and thrive—post-acquisition?
The answer here is straightforward: bottom line results.
Our results made it clear that the new owners were better off with us than they would have been without us. Sure, we invoice them for our services. But when they got into the details of our engagement, it became clear to them; the money being spent on us was dwarfed by the money that would have been spent with their suppliers had we not been on their side.
In some corporate environments, we’ve been frustrated by how little attention is paid to actual results. Rewards are doled out based on projected savings, not what actually happens over the course of time (see “Procurement Incentive Plan Flaws: Part 2”). But our new contacts at the PE level had bottom line interests in mind first and foremost. They saw that our dedicated, vigilant approach to “nuisance” expenses was a real and lasting solution to a persistent problem.
These categories had previously burdened their people both in the field and at the corporate level, and driven wedges between procurement and operations when intended savings didn’t materialize.
Now, with Fine Tune on their side, costs went down and stayed down. And, no longer encumbered by these burdensome expenses, resources were freed up to work on higher priority initiatives.