The most valuable asset of a company – its Customer Base

The most valuable asset of a company – its Customer Base

An extended session on “Making Intangibles Count” on day one of next week’s conference is well timed. As Mike Nall says in his piece on Due Diligence in sell-side mergers and acquisitions in the latest issue of M & A magazine, “more and more of a business’s assets being acquired are intangible."

In fact, up to 80% of a firm’s value can come from its Customer Base. As the primary revenue generating asset, it is critical to examine a target company’s relationships with its customers in the Due Diligence process. Critical questions needing answers are:

  • How strong are the company's relationships with its customers?
  • What is the mix of Loyal, Neutral & Vulnerable customers?
  • Is it favorable or unfavorable to securing future revenue?
  • What is the probability a key customer will defect?
  • What is the quality and sustainability of the revenue stream?
  • Is the company really worth what you think it is?

At Loyalty Research Center, we provide smart customer insights as a part of due diligence to manage risk, create value and identify growth opportunities. Customer Intelligence is critical to true assessment of a company’s worth and its future potential.

Kay Ranade
Director – Strategy & Business Development
Loyalty Research Center

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