<img height="1" width="1" alt="" style="display:none" src="https://www.facebook.com/tr?id=736814813099632&amp;ev=PixelInitialized">

Subscribe to Email Updates

Latest Blog Post

Don’t Let Spinoffs Spin Out Your Customer Relationships

Sharon Gillenwater
by Sharon Gillenwater on Dec 20, 2016 4:08:56 PM

Dont-let-spinoffs-spin-out-your-customer-relationships.jpg

Are any of your customers involved in corporate spinoffs? Sales and marketing people are always advised to keep an eye on potential mergers and acquisitions among their customers, but we don’t usually talk about spinoffs.

A spinoff is the creation of a new, independent company through the sale or distribution of new shares of an existing business or division of a parent company, according to Investopedia. It’s a corporate strategy not employed as frequently as other kinds of corporate activity but it’s not uncommon, either. Some 50 spinoffs are made annually.

“Spinoffs are back in vogue with American investors after a rough start for 2016, in which a flurry of separations in struggling industries such as oil and raw materials turned sentiment against the tactic,” reported Bloomberg News in October 2016. “A rebound in energy stocks and a handful of transactions in technology, this year’s second-best performing industry in the S&P 500, are spurring the turnaround.”

Many of these names are familiar. In 2016 we’ve seen ConAgra spinoff French fry division Lamb Weston. There’s Arconic and Alcoa. Car seat maker Adient gained independence from Johnson Controls. AdvanSix is separate from Honeywell. Hertz Global Holdings released Herc Rentals. And RR Donnelley set loose LSC Communications and Donnelley Financial Solutions.

And there are more big spinoffs on the horizon as we end 2016 and enter 2017.

So, why is tracking spinoffs important for salespeople?
  • A spinoff represents a dramatic change in strategy. It may mean that the parent company wants to divest more mature businesses to focus more on growth markets or divest struggling businesses to drive up stock prices for its core business.
  • It usually results in major changes at the executive leadership and board levels.
  • Separations of companies mean separation of back-end systems. This can impact vendor relationships, and create potential net new opportunities. Conversely, it’s a time to shore up existing relationships in a time of change. 

Xerox, Hilton, and MetLife are all in the process of creating spinoffs. From Xerox will come Conduent Incorporated, a business process outsourcing organization. Hilton is setting loose what will be Park Hotels & Resorts and Hilton Grand Vacations. And MetLife is excising Brighthouse Financial Inc.

Already new leadership teams and boards have been announced for each of these transitions and the companies are planning their strategies for 2017. Some have discussed them at their final earnings calls for the intact organization. At Xerox a long-time key player is retiring. Do you know who it is? At Hilton, a major Chinese conglomerate has already bought a 25 percent stake in the company and will own a quarter of all three companies once the spinoffs are complete. What impact will that make on strategic decisions?

If you’re a vendor tracking these companies—as well as DowDuPont, Tegna, Sealed Air, Huntsman, and other businesses planning spinoffs in 2017, you need to keep up with all of the new information coming out about these changes, including and especially additional executive changes. These are sure to keep trickling through December and early 2017.

It’s challenging enough to keep on top of ever-changing corporate strategies and CXO shuffles at what we might call “stable” companies. But the chess games going on with spinoffs, as well as mergers and acquisitions, require that salespeople watch every move with a keen eye—and skillfully connect the dots to potential deals and opportunities. There’s no room for missteps when preparing for and approaching a key decision maker at one of these firms—and if you’re savvy to their new needs and challenges, you can be in the position to become a trusted advisor in the new climate in which they find themselves.

Why-you-need-to-sell-to-the-csuite-and-how-we-can-help-1.pngSelling to the C-Suite can be very difficult, but also very lucrative if done right. Download our free ebook: Why You Need to Sell to the C-Suite - and How We Can Help to gain the competitive edge you need to close the deal. 

Get the Ebook

Leave a comment

Sharon Gillenwater
Written by Sharon Gillenwater
Sharon Gillenwater is the founder and editor-in-chief of Boardroom Insiders, which maintains an extensive database of the most in-depth executive profiles on the market, from Fortune 500 companies to independent non-profits, to help sales and marketing professionals build deeper relationships and close more deals with clients. Gillenwater is a long-time marketing consultant with expertise in marketing strategy, account-based marketing, and CXO engagement programs.
Written by Author

Related posts

Getting Back to Basics

You’re in sales. You’ve got a product to sell. Boom. Done. Then on to the next deal. Your technique? You use the sales...

Sharon Gillenwater
By Sharon Gillenwater - February 14, 2017
Enterprise Sales Strategies: Salespeople Need to be Generous Know-It-Alls

If you’re like most people, a networking event or cocktail party filled with unfamiliar faces does not top of your list of...

Sharon Gillenwater
By Sharon Gillenwater - October 27, 2016