January 31, 2022
due diligence glassesInterviewing your target company’s customer base is a pivotal step in understanding the value in your potential investment. The way you gain feedback can be critical.

One-on-one, open-ended phone interviews provide a level of detail superior to an online or email survey. Specific customer needs, what might cause accounts to switch, and the possible threat of losing a satisfied customer to a provider with a broader solution can be discovered to determine short- and long-term risks and growth potential. Making a financial decision based on check-the-box customer feedback can be risky.

When asked to rate satisfaction, most customers in the B2B world would prefer to be positive (unless the offering is just terrible), especially if they are friendly with a sales or customer service rep. So, checking a box about satisfaction or asking if they would refer by giving a high Net Promoter Score (NPS), many times does not get to the underlying issues.

For example, during one-on-one interactions when your potential investment is compared to their competition, you may uncover respondents:

Uncover the Facts sign
    • Are not familiar with any competition – Good news! They are not considering switching.
    • Worked with the competition in the past and were unhappy with them for a and b reasons – great insight for positioning and messaging.
    • Perceive the competition to be better in a and b and are considering switching:
        • Useful sales info - provides insight into how to keep or increase business with this account.
        • Great insight for product development.

Two examples from our experience: 

Membership Software Company:Magnifying glass Customer

Situation: When interviewing customers of a membership software company, a possible investment of our investor client, we found 95% of 52 respondents said they were either Very Satisfied or Satisfied. However, 3 of those Satisfied customers also stated in conversation that they were actively looking to switch. Reasons included:

    • Decision made higher up - Company was looking for a solution to fit all departments, and respondent was part of 1 department out of 40.
    • Price - Another had found a solution for a lesser price.
    • Features - Another found a solution with features that they needed.

In addition, Mayfield Consulting was able to label 12 respondents as “a little at risk,” due to a variety of issues. One Satisfied large customer commented, “If there was a cleaner way to do the XX view and I found it, I would most likely switch.”

Outcome: The investor decided to invest, and Sales was given excellent background to save those 3 accounts and handle those that were “a little at risk”. 

Billing Software Company:

Situation: In interviews with just 29 customers of a billing software company, 97% stated they were Very Satisfied with the company, and 96% gave a top NPS of 9-10 (Promoter- Loyal Enthusiast). However, many respondents mentioned some issues with the software that a check-the-box survey would not have uncovered. Issues included:

Little guy with magnifying glass

  • 21% stated the solution was somewhat antiquated: “They still have us log into a remote desktop. Other companies have gone to a web-based platform. It makes it seem old.”
  • 10% stated the user interface was not user-friendly.

Outcome: The potential investor decided not to invest.  

So, high satisfaction levels or great NPS do not necessarily reveal underlying problems. In these instances, only the in-depth discussion did.

And oh, by the way – as we have found happens often with customer feedback – something really bad has to happen before you get a not satisfied or low NPS rating. We attribute it to change:

    • People don’t like to change – really takes a big hiccup to force a change.
    • People like to feel good about their suppliers - hard to picture in today’s world, but they want to feel they made the right choice.

*In Part 2, we’ll talk about surprises, open-ended questions, and the rationale to invest. 

Come for the customer due diligence, stay for the sales, marketing and public relations implementation. Contact us today.

Mayfield Consulting’s team has hundreds of combined years of experience in sales and marketing, providing market research, business due diligence, sales, marketing and PR strategy and implementation. All services are performed by seasoned professionals, on an affordable, a la carte menu to business-to-business companies. Mayfield has special expertise in software, security, business services, financial services, and classic manufacturing industries. With a tagline of “Where Results Happen,” Mayfield Consulting has clients that have been named 11 times in the last eleven years to the Inc. 5000 List of America’s Fastest Growing Private Companies, won more than 70 awards, and experienced exponential growth.