A commercial due diligence check encompasses far more than just monitoring the financial health of a company. To understand the overall health of a brand, you need more context. For this reason, we’ve compiled a list of over 50 commercial due diligence  questions across 6 dimensions: financial, reputational, demand, customers, products and services and marketing.

By answering these commercial due diligence questions, you will build a complete picture of the target company and enhance your M&A and private equity decision-making.  

50+ Commercial Due Diligence Questions

Financial

• What is the company’s current financial situation? How does the company generate revenue?
• How profitable is the company?
• What are their expected cash flows for the next 3 years?
• Does the company have any long-term debt or other liabilities?
• Who are the company’s largest creditors?
• What is the company’s current borrowing capacity?
• How much money has the company raised recently and from whom?
• Are there any potential conflicts of interest among board members or investors?
• Does the company have adequate business insurance coverage?

Reputational

• How is the company perceived in its industry?
• What customer service standards does the company follow?
• Does the company have a good online presence?
• Has the company received negative media attention?
• How do customers feel about the company’s products or services?
• Are there any potential legal or ethical issues with the way the company is run?
• Does the company have a solid track record of customer satisfaction?
• Has the company been involved in any litigation in recent years?
• Are there any negative reviews or complaints about the company online?
• How does the company handle customer inquiries and complaints?

Demand

• What is the current level of demand for the company’s products or services?
• How saturated is the market for these products or services?
• Are there any potential trends that could affect demand in the future?
• Is the business model sustainable long-term?
• Does the company have plans to expand into new markets or industries?
• Does the company rely on a specific customer base for its revenue?
• How does the company differentiate itself from competitors?
• Are there any regulatory changes that could impact demand in the future?
• What would be an ideal growth trajectory for the company?

Customers

• Who is the primary customer base?
• What is their average spend per purchase?
• Are there any opportunities to increase customer engagement or retention rates?
• Does the company have a strong understanding of its target market?
• Is there an effective system in place to track customer feedback or complaints?
• Does the company have plans to expand into new segments or markets?
• Are there any significant changes in customer preferences that could affect future sales?
• How does the company use data to better understand its customers?
• How does the company acquire new customers?
• Does the company have a satisfied, loyal customer base?

Products /Services

• What products or services does the company offer?
• How innovative are these offerings compared to competitors?
• Are there any potential issues with product quality or reliability?
• Is the pricing of the products competitive within the market?
• Does the company have plans to introduce new products or services in the future?
• How effective are the customer service and technical support teams?
• Are there any patent or intellectual property issues related to the products or services?
• What are some opportunities for improving existing products or services?
• What would be an ideal launch timeline for any new products or services?

Marketing

• What marketing channels does the company use to reach its target audience?
• How effective is the company’s current marketing strategy?
• Are there any opportunities to increase brand awareness?
• Are there any potential legal issues associated with the company’s marketing activities?
• Are there any opportunities to improve upon the current marketing strategy?

What role can big data play?

Every day, consumers are openly expressing how they feel about brands and products in reviews and social media comments. This rich and freely available data can give you an incredible amount of insight into brand and product health.

With the right social listening and analysis tool, you can answer pertinent commercial due diligence questions that can not be fully explained by quantitative data.

Here are some key commercial due diligence questions that big data can help to answer.

What role can big data play?

Every day, consumers are openly expressing how they feel about brands and products in reviews and social media comments. This rich and freely available data can give you an incredible amount of insight into brand and product health.

With the right social listening and analysis tool, you can answer pertinent commercial due diligence questions that can not be fully explained by financial data.

Here are some key commercial due diligence questions that big data can help to answer.

Commercial Due Diligence Questions Answered By Big Data

Where does the target company stand within the market?

Big data collected from social media and review sites reveals who has the largest share of voice as well as customer sentiment towards key competitors.

While it is not always easy to get accurate financial information about your target and its competitors, brand mentions are publically accessible and easy to measure with tools such as the Symanto Insights Platform.

The Symanto Insights Platform also compares brand mentions over time to view which competitors are gaining traction, which are stable and which are losing their hold on their customer base.

While it’s still hard to quantify the ROI of a brand mention, it is generally accepted that there is a link between brand mentions, brand awareness and sales as well as being a general indication of brand health – more on that later.

What are some opportunities for improving existing products or services?  

If you’re planning a merger or acquisition, you need to know exactly what you’re taking on. What issues do existing customers have with the target company and their products? How is it affecting brand sentiment?

Once you have this information you can assess whether the issues are fixable and make predictions about the future of the brand.

The Symanto Insights Platform draws these insights from organic conversations online. The platform assigns topics and subtopics to each comment and review and analyses them for sentiment so that you can pinpoint where the problems lie within the target company.

Are customers experiencing long delivery delays? Are there serious or recurring product faults? Does the company have a bad reputation for customer service? All of these questions are answered by looking at cumulative comments and reviews for that company, a process made easy with the Symanto Insights Platform.

Who is the primary customer base?

Companies regularly use big data to measure the demographics and buying behaviours of their customer base – age, location, lifestyle, likes and interests, etc. But there’s another defining factor that can help you understand the customer base: psychographics.

The Natural Language Processing (NLP) technology used by Symanto assesses language for key personality traits.

Based on the tonality and linguistic style of their written text or transcript, the Symanto Insights Platform can identify.

1. The intention behind a text
2. The preferred communication style
3. Whether the author is rationally or emotionally driven.

Understanding psychographics and communication styles can help you target your marketing and branding efforts towards similar consumers.

Since these insights are gleaned from freely and publicly available information online, you can easily compare the customer base of the target company with those of their main competitors. It might surprise you to discover that although two competitors share the same audience when it comes to demographics, they actually attract different personality types

Does the company have a satisfied, loyal customer base?

According to Harvard Business Review, acquiring a new customer is anywhere from five to twenty-five times more expensive than retaining an existing one. A target company with a loyal customer base will be more profitable than one that is continually investing in marketing to attract new consumers.

Loyal customers are not only likely to repeat business, but they are also more likely to be advocates for the brand, actively recommending to friends, family and even strangers online through online reviews.

Given the rise and rise of social proof, customers who leave positive reviews for a company are more valuable than ever.

Use the Symanto Insights Platform to find out what portion of the target customer base expresses an emotional connection to the target brand. The platform also measures the number of comments and reviews promoting the target brand against the number of comments detracting from the brand to give you a Net Promoter Score (NPS).

Brands with a higher NPS are likely to have a more loyal customer base.

Is the brand healthy?

There are several metrics to consider when assessing brand health, and many of them can be measured via readily available big data.

1. NPS
   As mentioned above, the Net Promoter Score weights comments and reviews recommending the brand against those dissuading people from using the brand. A higher NPS score is an indication of good brand health.
2. Share of voice
   Share of voice measures the proportion of consumers talking about the target brand compared with its competitors. As such, share of voice is a measure of brand awareness.
3. Overall brand sentiment
   The Symanto Insights Platform enables you to compare consumers’ overall sentiment of the target brand and its competitors. A low sentiment score doesn’t tell the whole story – you need to see how other brands in the industry compare to get a fuller picture of the target company’s brand health.

Get started with the Symanto Insights Platform

If you’re not already harnessing big data to answer commercial due diligence questions, you’re missing out on a whole heap of pertinent and valuable insights. Find out more about how to use the Symanto Insights Platform for commercial due diligence by getting in contact, or book your free personalised demonstration.