Customer research is the best way to both diligence your deal and excite your investors.
Examples:
• 1-on-1 interviews. Best for B2B with low customer count. These must be initiated by the seller, who might be hesitant to sending someone with PE all over their LinkedIn, but might be willing to involve a 3rd party consultant. Talk to current customers, churned clients, and lost prospects.
• Customer survey. This works better for large customer counts (>100). A Google Form takes you a long way. Seller can send it to the customers.
• Online reviews. Especially relevant for B2C. Mine that data, compare it to competitors. Google, Glassdoor, BBB, G2, Capterra.
• Mystery shopping. (B2C). Go through the sales process from A to Z.
• Consulting firms that specialize on customer diligence (and aren't priced like Bain/McK): Rose Cognition, BTG, Catalant, Woozle.
• GLG. Not sure their pricing these days, but talking to 3-7 industry experts will be exceptionally valuable. They might translate into LPs or board members too.
• Cold calling. Be cautious if you don't have seller's consent. You'll have to reach out to ideal customer profiles blindly and never explicitly reveal a link to the target company. Tedious, but valuable if you can do it at sufficient scale. Consulting firms run entire call centers for weeks to get 50-200 calls (from which they build a mosaic of intel).
• Ledger of transactions with each customer. Go deep when analyzing sales by customer, sales by product, sales by month, etc. Map how customers behave and compare this with how management says they behave. You might end up understanding the customer better than the management (not an uncommon outcome for top consultants after a couple of months).
• Contract analysis. Understand provisions and durations of customer contracts when applicable. AI can do a lot of this ground work.
• Review A/R Aging on the balance sheet, and also review how this has evolved over time.
• Support tickets. This is a treasure trove of information, especially for tech/SaaS companies. You'll gain a strong understanding of pain points and frustration levels.
