A VOC Case Study:
The Need for Customer Due Diligence
$800 million North American manufacturing client
Our client was considering the acquisition of a smaller competitor.
As part of the evaluation, we spoke to the target company’s top 20 accounts. We discovered that 11 of these top customers were underwhelmed with the company’s product and service — and many were on the verge of leaving. There had been persistent quality problems, and service had been dodgy at best. The target company’s Net Promoter Score (NPS) score was negative — a sure sign that major issues existed and business loss was imminent.
Value of the Process
With this insight, the acquirer restated the revenue projection, which in turn impacted earnings and ultimately the valuation. Armed with objectively collected customer feedback, our client had solid evidence to justify the downwardly adjusted valuation. The deal was ultimately completed, but only with a notable price concession by the target company