Introduction:
For private equity firms, maximizing value post-transaction is critical. A SaaS company (Client) partnered with Loyalty Research Center (LRC) to identify hidden commercial opportunities and strengthen customer relationships through a comprehensive value creation customer diligence program. The results: a clear roadmap to change initiatives and a projected $3.2M revenue impact. (an 11% gain in revenue which produced a 23% gain for the bottom line).
The Challenge:
Client, a platform company serving multiple verticals, faced growing customer vulnerabilities and untapped opportunities in ancillary services. They sought a data-driven strategy to:
- Determine what to change to mitigate churn risks in vulnerable accounts.
- Identify the accounts with high-value ancillary opportunities and pricing levers.
- Pinpoint actionable improvements to enhance loyalty and service quality.
With diverse decision-making criteria across its customer base, the Client required a value creation customer diligence program that could provide both depth and actionable insights.
Our Solution:
LRC designed a tailored customer diligence framework to address these challenges:
- Deep Customer Insights: Conducted deep dive, actionable surveys and competitor benchmarking to identify loyalty drivers and key differentiators.
- Commercial Opportunity Mapping: Classified accounts based on loyalty, pricing sensitivity, and ancillary service potential to uncover areas of growth. This was powerful information, made more impactful with Loyalty Research’s ability to extrapolate it to 94% of the accounts in the full database.
- Operational Feedback: During the Deployment Phase, Loyalty Research collaborated with leadership to align internal priorities with market expectations.
This multi-layered approach enabled Client to uncover precise strategies for growth and retention.
Key Findings:
Our diligence program revealed critical insights:
- Loyalty Segmentation:
- 45% of core and customers were classified as loyal, representing significant growth opportunities.
- Identified the customers with the highest churn risk, with 32% of respondents deemed vulnerable.
- Revenue Potential:
- $3.2M projected revenue impact through churn reduction, ancillary upsells, and pricing adjustments. This impact was realized within 10 months.
- Of the 17% of customers that were identified as high-probability targets for ancillary services as part of this projected revenue impact, 86% were sold these services within 12 months.
- Service as a Differentiator:
- Platform ABC outperformed competitors in two key areas: responsiveness and resolution timeframes, giving it a competitive edge.
- However, unresolved issues with 56% of respondents underscored the need for operational improvement in specific aspects of service quality. These were identified and prioritized as part of this program.
- Price Sensitivity & Decision Drivers:
- Since most customers wanted an enhanced package of services, it allowed the client to offer the package at a premium price, thereby getting the price increase without simply raising prices.
- Technology and business services sectors displayed greater price sensitivity, driven by formalized RFP processes.
The Results:
With LRC’s support, Client turned diligence findings into actionable strategies:
- Operational Focus: Targeted improvements in service quality and problem resolution to reduce attrition and improve loyalty.
- High-Impact Dashboard: Developed a post-transaction dashboard to track high-value customer opportunities and operational progress.
- Revenue Impact: Positioned to achieve a $3.2M increase through focused interventions and growth strategies.
Why It Matters:
Customer diligence goes beyond surface-level insights—it provides the data-driven foundation needed to unlock post-transaction value. For Client, this process turned potential vulnerabilities into growth opportunities, ensuring long-term customer loyalty and sustainable revenue.
If you’re ready to see what customer diligence can do for your portfolio companies, schedule a consultation with us today.
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Cover photo: Photo by cottonbro studio