Including B2B market research in due diligence uncovers value drivers
An effective due diligence process is core to reducing risk and ensuring profitable M&A deals. Due diligence that focuses on financial, legal, and operational issues, however, is woefully incomplete. Market due diligence is equally as important—and perhaps more so.
Generating profitable revenue and growth requires a deep understanding of customers, competition, value drivers, market access, and market trends. You need to understand brand value today as part of your deal strategy and how to build value in the future as part of your future exit strategy. Due diligence without B2B market research to uncover this information is missing an important piece.
Add B2B market research to your due diligence to answer key questions
Market research is the engine that generates revenue and profit. That is why gathering intelligence in this area should be an important component of your due diligence process. Including B2B market research in due diligence—and beyond—answers the key questions in these areas:
Who are the main competitors? How are they different? What value do customers perceive them having? What is their edge? Where are they weak? B2B market research that talks to decision-makers, influencers, and gate-keepers will give you valuable insight into the competitive landscape.
Customer Needs and Wants
A deep understanding of customers uncovers potential problems and opportunities at a target company. You will want to understand who is buying, their role, priorities, habits, wants, needs, fears and aspirations. How do they perceive your products and services? What features and benefits do they value? What might you add to grow market share and command a higher price?
Hidden in the balance sheets in a potential deal, deep in the “goodwill” line is the reputation of the company and what it sells. What is the real value of the brand? What are people saying about it? What drives these perceptions?
How well is the current offering satisfying demand in the marketplace? What is unique and valuable? What opportunities could be addressed to grow sales? What innovations have the most potential?
What is the potential to broaden the scope of the company into new geographies, new applications, and new customer segments? B2B market research helps you identify and plan new avenues for expansion.
What is the reputation of the company with former and current employees? You can get valuable insights across all aspects of the company through this channel. Since you are buying talent and a culture as much as you are buying brands, patents, and contracts, knowing what will keep people engaged through an M&A deal is important. You’ll also want to understand how you will attract top talent in the future.
Metrics and Tracking
Measuring marketing performance ranks right up there with financial reporting when it comes to evaluating the success of mergers and acquisitions. Due diligence is just the start of tracking the success of a deal or investment opportunity.
Due diligence insights that identify opportunities and reduce risks
Successful M&A deals are built on solid due diligence. Conducting B2B market research as part of that process sharpens your insights for every deal to:
- Reduce deal risks
- Uncover competitive advantages
- Discover innovation and growth opportunities
- Identify potential weaknesses and threats
- Retrain and attract top talent
- Build plans for achieving initial and long-term investment performance goals
- Lay the foundation for enhanced enterprise value