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. Commercial due diligence answers questions such as “Where is the market heading and how will this affect the target company?”, “Who is the target consumer?”, “Is the customer base loyal to the brand?” and “Is the brand recovering from any PR disasters?”.
All of these questions are important when measuring commercial due diligence for mergers and acquisitions, or private equity decision-making.
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?
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 product faults or challenges need addressing?
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.
- The intention behind a text
- The preferred communication style
- 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 brand have a 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.
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.
- 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.
- 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.