Customer Due Diligence – Lesson 4: Get on the Same Page


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The relationship and communication between the target company and the acquirer is very important in the customer due diligence process. That is the theme of lesson number four.

Lesson 4: Having the target and acquirer be on the same page is key

By the time customer due diligence is occurring, there is a slew of activity underway; it is understandable, then, if there are some gaps in terms of common understanding between the target and the acquirer. This can have significant impact on how we approach the customer due diligence (and the corresponding outputs); for example:

  • Who will have access to the aggregate-level data? Will both target and acquirer have access to it, or will the acquirer be the only recipient? Does the answer depend on the outcome of the deal?
  • Who will have access to the detailed (customer-level) data? When will it be possible for the acquirer to have access to the raw data (including the financial information)? Will the target be able to have access to this information? This is a key decision point that is usually more sensitive in a strategic purchase vs. a financial purchase.
  • What are the expectations for the use of the information? Is the information being used solely to assess revenue flight risk? Will the information be used to take action within the target firm at a macro (company) level, account level, both or neither? Will this information be used to inform the organizations how to best integrate the two firms?

Having absolute clarity among all the parties is not only critical from a project execution/expectation management perspective, but it can also have a material impact on the design and approach of the customer due diligence project. Once again, this is where Walker can help – our approach is based on the idea of understanding the key business issues the buyer is interested in exploring and ensuring that the approach offered has the full support and buy-in of both the target and the acquirer.

This is the fourth in a series of lessons learned conducting advanced customer due diligence. Watch my blog in the coming weeks for other key lessons. They will be available here.

Republished with author's permission from original post.

Mark Ratekin
Mark is responsible for assisting clients in identifying and quantifying the financial linkage of their customer loyalty management programs. He plays an active role in translating program findings and conclusions into actionable recommendations and works with management and employees to facilitate the implementation of program findings into quality improvement strategies.


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