Commercial Due Diligence Consumer Goods

Why is customer analysis important in a CDD for companies dealing in consumer goods?

Customer analysis is important in the Commercial Due Diligence for companies that deal in consumer products because it helps companies understand their customers and find ways to serve them better. Customer analyses can include collecting data through surveys or other means and then using that data to create customer profiles or clusters. This information can be used to improve marketing and product development.

In addition, understanding customer behavior can help companies keep their customers happy and counteract churn. If there is a trend towards high rates of customer loss, this can become a serious problem for a company.

Does CODEX Partners incorporate the evolution of consumer habits?

When conducting a Commercial Due Diligence, it is important to analyse consumer habits in detail and include them in the consideration. This is because changing consumer habits can have a significant impact on business models. For example: during the COVID-19 pandemic, a strong impact of the so-called cocooning effect could be perceived in terms of consumer habits. This led to a boom in segments such as pool construction, sauna and garden houses.

Is a classic CDD sufficient for digital business models (e-commerce, marketplace, network, etc.)?

A classic Commercial Due Diligence is still the basis for assessing the business model. However, in the case of digital business models, especially in the area of interaction with customers, it must be supplemented by a comprehensive audit of a company's digital competencies ("Digital DD"), which deals with the following additional topics:

  • SEO (Search Engine Optimisation) and SEA (Search Engine Advertising)
  • Structure and customer journey of the webshop
  • Connection of the webshop to the merchandise management system
  • Quality of the description of the assortment and
  • Visible customer feedback

In addition, the digital strategy is a crucial topic.

What is the information gathering process for a CDD for consumer goods companies?

Information procurement with regard to the classic CDD elements is a combination of internal company data, which is analysed, and relevant market and competitor data. The pure research results are compared and supplemented with market experts. Especially when it comes to testing the digital business model, analysis elements are used such as:

  • Website Visibility
  • Conversion Rates
  • Churn rates
  • Customer Acquisition Costs etc.

What are the priority areas for a CDD for consumer goods companies?

Initially, the focus here is also on the product category and product comparison, as well as the sales strategy. This would include topics such as Internet marketing, communication with online call centers, and customer-facing topics such as customer acquisition. Another important topic is the definition of the main target customers, as these are often not sufficiently analysed by the company.

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