Customer Due Diligence - Pre Investment Assessment
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Customer (and market) due diligence is a relatively inexpensive way to identify risks and issues with your target’s revenue forecast and market position and provides a sense check as to whether your investment really has the ability to pay a return. Assessments are normally completed within 3 weeks providing the necessary data (customer and company data) and people (management, staff and customers) are available. Investigations are completed in 4 stages:
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1. Desktop research
This involves a thorough search and assessment of all the available material on the target company, its market and its competitors, to provide:
a) Description of the industry and its development and current key trends
b) Key players/competitors, including alliances and owners and potential new entrants
c) Market size and growth projections where available
Note: Wherever possible the research will obtain the most recent financial statements for immediate competitors and also will list any additional research material available that could be purchased separately.
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2. Customer/Industry Interviews
A sample of customers or industry third parties will be interviewed via telephone (up to a maximum of 20) in order to assess:
a. Company reputation and customer satisfaction
b. Customer requirements/needs analysis
c. Customer dynamics, purchasing patterns and buying processes
d. Switching behaviour, potential sources of new business
e. Trends in pricing and any potential price sensitivity
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3. Operational Assessment
This will be based on a company visit (approximately 3 days on site) and involve interviews with company managers and staff, and observations of their core processes in order to assess their capability in the following areas:
a. Customer management processes, sales, marketing and service.
b. Customer strategies, acquisition, retention and development.
c. Management capabilities, sales, marketing, service, strategy.
d. Employee quality, skills, issues and impacts.
e. Performance measurements and metrics.
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4. Summary & Recommendations
This will assess the achievability of the sales projections (Base Case & Management Business Plan) in the light of:
a. Market assessment
b. Customer/Industry interviews
c. Operational assessments
Where-ever possible recommendations for improvements or further investigation will also be made in the final report/presentation.
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If you would like to speak to one of our consultants regarding a customer due diligence investigation please complete the form below or call our office on 0844 858 4120.
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A provider of customer-centric investment support and business consultancy services. Develop, Improve, Evolve.
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