An introduction to our diligence methodology
Traditional approaches to evaluating the technology of a business provide relatively limited, surface-level insights. The underlying problem is that key areas like data, technology, customer experience and company values are often considered independently. We’ve pioneered a methodology for bringing these seemingly disparate topics together into a framework that aligns both qualitative and quantitative aspects of value.
We use our proprietary methodology during pre-diligence and post-term sheet due diligence to help investors quantify the value of investing in or acquiring a target company. This article introduces our framework which covers four areas: data, technology, customer experience and company values. We will also share some of the specific diligence questions that we as in order to produce insightful valuation intelligence.
A company’s data is increasingly one of its most important competitive advantages. It is through data that companies design and build cutting-edge customer and employee experiences. And yet most diligence investigations around data aren’t designed to uncover the relationship between a company’s data and its revenue-driving products, or between data strategies and customer value. That creates a huge knowledge gap.
…most diligence investigations around data aren’t designed to uncover the relationship between a company’s data and its revenue-driving products, or between data strategies and customer value.
Technology and tools
…it can be easy for investors to be misled into the promises of digital capabilities that turn out not to be ready for market.
94% of consumers who give a company a “very good” CX rating are likely to purchase more products or services from that company in the future. In comparison, only one in five of those who gave a company a “very poor” CX rating say the same.
A notable example is Tesla. They have digitized many of the experiences in what was once a mostly offline mechanical device: passenger vehicles. In doing so, they have opened up numerous touchpoints with the consumer that allow them to propagate their brand values. By embedding a digital connection into each car, Tesla is able to transmit software updates instantaneously, allowing the customers to see first-hand how Tesla is always innovating, which is one of their core values. This value as written on the website means little, but as experienced by a Tesla owner that values innovation, the impact is a repeat customer and a customer advocate.
SVSG focuses on assessing how well the company’s values are shaping—and are being reflected within—customer and employee experiences. Our diligence questions center around: