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Contributors
8 mins

Why investment professionals need expert calls and qualitative B2B surveys in their due diligence process

We explain why it's good for investment professionals to use expert calls and qualitative B2B surveys for due diligence

Navya Lamba
Jun 1, 2022

Meaning of expert calls and qualitative B2B surveys

In this article, we'll explore why it's a good idea for investment professionals to use expert calls and qualitative B2B surveys in their due diligence process. We'll also look at what makes a survey and an expert call effective.

Expert calls and surveys are popping up more and more in the due diligence process and for a good reason. As the name suggests, expert calls are conversations with people who have deep knowledge and expertise in a specific industry to gain a holistic view of the subject matter in order to conduct due diligence. Similarly, surveys are a method to gather qualitative and quantitative data for the purpose of due diligence.

Surveys play a differentiated role because they can help to streamline data in a systematic way in order to service insights about a company, product or a market. Surveys can be beneficial to investment professionals because of the following reasons:

  • They provide insights into the commercial aspect of a business and help avoid misplacing any risk on that front in an M&A deal or carve out.
  • Uncover customer preferences, trends, and perceptions about a company or its products.
  • Understand a company’s positioning and competitive advantages in an industry.
  • Understand reasons for say revenue loss or decreasing customer numbers.

The markings of good B2B surveys for due diligence

Creating high quality B2B surveys for due diligence is no easy task. A lot of careful considerations need to go into before making a survey. First, make sure that the questions are clear, simple and easy to understand. Avoid long or irrelevant questions as well. Second, ensure that the survey is a short one because people’s attention spans are usually short. Third, it is important that questions are grouped according to subtopics so that the survey flows nicely. Fourth, ensure that the respondent’s data is securely stored so as to avoid misuse or leaks.

Lastly and most importantly, screen your respondents beforehand according to the purpose of your survey so that you pick the right kind of people. We will share some tips to screen your respondents. Ask some screening questions right at the beginning of your survey. It is important that you keep the screening questions as simple as possible. Also, you can use more than one screening question if you really want a specific profile of people.  Additionally, do a pilot survey if possible before you actually run the survey. Note that the process doesn't end when you collect the responses. After you have the data collected, make sure that you analyze the responses and take appropriate action.

In the same vein, expert calls are useful for the following reasons:

  • Experts can provide a forward-looking analysis on how the industry is going to look like in the future and predict trends.
  • Experts can overall enrich the quality of the commercial due diligence by providing insights on a deeper level.
  • They can also provide an overview of the competition, company KPIs, and requirements in the industry.
  • They can help understand the ground realities of an industry and shed light on information that cannot be found online.

The markings of an effective expert call

It is vital that you make the most of your expert call since it can be a great opportunity to get information that you can't get elsewhere. First, you want to go into the expert call with your homework already done. Do your research and prepare a list of questions that you want to ask the expert beforehand. At the beginning of your call, take some time out to establish a rapport with the expert. After having done this, make sure to clearly state the purpose of your call and the topic that you want the information on.

Even though you are speaking to an expert, try to avoid industry jargon. Use simple language and be as clear as possible. In addition to that, ask for as many examples and case studies as you can to understand the nuances of the subject matter. Prioritize your list of questions, making sure to ask the top ones, if you run out of time.

It might be that the conversation takes a new turn during the phone call, so make sure to do your research before on the full breadth of the topic.

If you’re curious and want to know more about this topic, check out this great LinkedIn article  

The 3 scenarios that a survey or expert network could produce.

Now, let's dive into three possible scenarios: one where diverging results are produced due to expert calls being incorrect, another where results diverge due to surveys being incorrect and lastly where the results align from both sources.

Scenario 1: Diverging Results when experts are incorrect

Consider the following scenario: A washing machine manufacturer wants to expand from Germany to Spain and has gathered 20 experts for the purpose of collecting an overview of the market. The manufacturer in particular wants to know the best method to advertise its products: online or offline advertising. The experts are of the opinion that offline advertising works better in Spain and that face to face pitching is the most effective. The manufacturer decides to run a survey of all similarly sized competitors in the market to gather this same information. But the survey results show that online advertising works best as people are shifting more towards and becoming more inclined to technology.The results showed that the number of customers who bought washing machines through online ads were a lot higher than those who bought them in store.

In this case, we have diverging results coming from surveys and expert calls. Although experts are a great way to dive deep into a subject matter, they may not be as effective in gathering information that is qualitative in nature. This is because experts can sometimes be biased or prejudiced in their answers or simply erroneous. Qualitative information often requires giving subjective answers and expressing opinions, which may differ from person to person. However, it may be noted that surveys can also suffer from the same problem since they also involve a human element.

Scenario 2: Diverging results when experts are correct

Now, let’s consider this scenario: A supply chain finance start up currently operating in Estonia wishes to expand to the UAE. Since supply chain finance is a very niche industry, it has differing regulatory and compliance requirements from country to country. The start up decides to use both expert calls and surveys in their due diligence process. The experts reveal that supply chain finance, although wasn't regulatory up until very recently now has a law dedicated to it. But when the surveys were rolled out they indicated that supply chain finance isn’t regulated in the UAE. This could be due to a number of reasons. The sample size chosen for the survey may be inappropriate or simply too small. It could also happen that the respondents were not aware of the regulation because it was so new.

In this case, we also have diverging results but here the expert opinion should be considered more valuable. Experts usually have diverse and extensive knowledge when it comes to regulation. Here again, due to the qualitative nature of the question, we get different answers.

Scenario 3: When expert calls and surveys match

Imagine that an Indian automotive player wants to know the top players and major KPIs of the automotive industry in Singapore because it’s looking for expansion opportunities there. Again, it decided to employ surveys and expert calls to gather this data. With the exception of a few differing KPIs, they find that the key players and performance indicators align from both sources.

Here, because the nature of the information was rather quantitative with little room for any judgment calls, we see that we get the same results. In most cases involving quantitative data, surveys and expert calls will yield the same results.

Commercial Due diligence requires being as thorough as possible. Specially, when it comes to making investment decisions where a lot is at stake, you want to cover all your bases. Since each project is unique, we should evaluate whether one or both sources are required to collect the data. If there are differing results, professionals should investigate why this is the case and if it can be solved. Doing so will ensure that the data collected is of the highest quality and consequently will enable investment professionals to make a wise decision.

Confused as to whether to choose surveys or expert calls?

We can help you out. Contact GrapeData for all your due diligence needs. Follow us on our Facebook, Linkedin, Instagram, Twitter pages.