Here we explore commercial due diligence and three ways that B2B CDD surveys differ from B2C surveys for PE firms
You might be wondering what a B2B CDD survey is. CDD, also known as commercial due diligence, is most commonly used in the context of acquiring a business. It involves doing both primary and secondary research and that can be done through a number of ways such as quantitative analysis for surveys. Typically, private equity firms use B2B CDD surveys to analyse whether a project is worth investing in. Furthermore, B2B CDD surveys are a subtype of commercial due diligence wherein the respondents are businesses.
There’s no dearth of reasons as to why private equity firms conduct B2B CDD surveys. First, B2B CDD surveys help in negotiations. They give a clear picture of the buyer as to what all costs, risks and benefits are involved in the deal. Second, To instil confidence in the purchaser ( in an acquisition deal) , assuring them of the target company’s ability to perform in the present and future. It also helps the buyer to gage the dynamics of the industry that the target operates in. Lastly, A B2B CDD survey aids the financing process. A bank will offer better financing if a B2B CDD survey shows that the target company has good future prospects.
The first meeting between a prospective private equity client and a panel provider takes place. At this point, the PE client will detail certain information that they want about the target company (for instance, if it’s a buyout deal) and set deadlines. The report is then prepared by the panel provider. This is the longest part of the process and will typically involve conducting B2B and B2C CDD surveys. The report is reviewed by the private equity client and they will have the opportunity to analyse the findings before making a decision on the buy out.
If you want to learn how a DD survey helps support private equity firms, check out our latest blog post here.
A B2C survey for private equity firms operates in a similar fashion as a B2B CDD survey does. But there are a couple of differences:
The most obvious difference perhaps other than the type of respondents is the number of respondents. Businesses are generally harder to recruit for a B2B CDD survey than customers. Because customers are generally looking for ways to make easy money, they are much easier to find than businesses, who may not have the same goals. As it is, businesses are pressed for time by running their day to day core activities. Customers on the other hand are incentivized to fill B2C surveys for private equity firms just by sitting at home.
B2B respondents are usually more knowledgeable than B2C respondents. Additionally, they are niche and pressed for time. All of this comes with a price. Typically, B2B respondents are paid anywhere from $60 to $200 per B2B CDD survey. Whereas a typical B2C survey costs anywhere from $10 to $60 for a survey panel provider.
A B2B CDD survey is the most accurate survey to conduct if you want accurate information from on the ground individuals. With B2B CDD surveys, you can get more in depth info that’s more technical and also precise data about a particular topic. Professionals responding to surveys are actually decision makers in the field. With consumer surveys pretty much anyone can submit and there’s no guarantee that they actually have in-depth information. On top of that, there is the matter of bias. Consumers can sometimes give biassed opinions about a product or service due to bad past experiences or skewed perceptions. Businesses, on the other hand, are relatively free from bias and hence provide objective data.
If you’re a B2B or a B2C respondent, you can sign up to become a vetted survey respondent on our website. We at GrapeData are committed to providing the highest quality data, be it a B2B CDD survey or a B2C survey for private equity. In the past, we have worked closely with PE firms and developed expertise in this area. We also aim to deliver quick and efficient results for your business within a matter of days. We have a hardworking team of professionals who are here to serve your every data need. Follow us on our LinkedIn and Twitter handles to stay up to date with what we are doing. With over 250k vetted and knowledgeable survey respondents, 15+ projects each week and coverage in 90k, we are uniquely positioned to solve your business needs.