Adding customer loyalty research into the due diligence mix will give the buyer a much clearer picture of the target company’s customers and ultimately the target company’s real value.

What do you know about the target company’s customers?

• How sticky is their relationship with the target company?
• Are they staying because they’re trapped?
• Would they stay if they had an alternative?
• Do they buy on price?
• Are they giving all the share of spend they could give to the target company?
• Do they plan to spend more, less or about the same with the target company in the coming year? Why?

Where traditional due diligence focuses on the target’s past financial performance, integrating the Loyalty Research Center’s Customer Due Diligence Advantage into the process gives the acquiring company critical attitudinal and behavioral information about which customers are Loyal, which ones are Neutral and most importantly, which of the target company’s customers are Vulnerable or At Risk for taking their business elsewhere and why.

Overlay how much business is represented by each loyalty segment, especially from the Vulnerable customers segment, and you will have a more realistic expectation of future business from the target’s current customer base if customer issues are not addressed. Having this information and the reasons driving customer vulnerability and defection can impact the buy decision, and if the deal were to move forward, the offer price.