How Excellere Partners, a Private Equity Investment Firm, Utilizes Loyalty Research

When evaluating potential investments, Excellere places as much focus on validating a company’s customer value proposition as analyzing the financial performance of the business. With this in mind, Excellere believes that in addition to the annual financial audit, a similarly rigorous review or “audit” of a company’s customer relationships should be performed.

Excellere has partnered with the Loyalty Research Center (“LRC”), an Excellere Project Expert, to develop a process to incorporate a customer audit as part of the due diligence process as well as during the investment hold period to validate and measure the enhancements to the customer value proposition identified in the original investment thesis.

Excellere Partners December, 2009 Excellere Report

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Mergers and Acquisitions

Private Equity Groups, Venture Capitalists, and other dealmakers are turning to the Loyalty Research Center to strengthen their due diligence process and increase their M&A success rates.

Where traditional due diligence focuses on the target’s past financial performance, integrating customer loyalty research into the due diligence mix 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 the vulnerable 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.

Consider the all too common situation where the new business owner experiences unexpected customer defection. It is costly, challenging and time consuming. Moreover, quickly replacing lost customers is not always possible. When the prospective buyer understands upfront the strengths (and weaknesses) of the target company’s customer relationships, the buyer will know what it will take to maintain and improve those customer relationships. Plus, having this knowledge puts the buyer is in a much better negotiating position to close the deal; and improve the odds for a successful merger or acquisition.

A Case in Point (Read the case study)

In addition to providing loyalty research and segmentation analysis during the due diligence process, the Loyalty Research Center offers Executive Team Assessments and Private Equity Group Portfolio Improvement Consulting.

Since 1997, the Loyalty Research Center has focused on customer and employee loyalty and satisfaction measurement and management in the B2B, B2C sectors. We work with companies across a myriad of industries and distribution channels to:

Improve customer and employee retention
Prioritize and implement effective change strategies
Maximize profits through better understanding of loyalty segments and their drivers, customer expectations, employee engagement, current performance, and competitive strengths and weaknesses

Find out more about how the Loyalty Research Center can help you strengthen your due diligence process or improve your portfolio.