07 Aug Customer Diligence
This Business Round Table by Exit Your Way® topic was “Customer Diligence”. The video features Andrew Deutsch discussing how he uses customer diligence in different situations to allow companies to perform better or prevent problems. Andrew opens up by talking about customer diligence and how its about understanding that customers are human beings. If you can relate to them on a personal level then they can become a really good advocate for the brand and your company. He goes on to explain that understanding your ideal customers very well allows you to generate messaging that resonates and inspires without turning them off. Proper messaging also allows you help potential customers qualify themselves and potential customers who are not a good fit will see that easily.
The constant theme in this video from Andrew is the importance of customer diligence so you can relate to your ideal customers on a personal level. Andrew says, “Talk to them like a person, not just someone who is going to sign the order.”
Using customer diligence to truly understand your potential and existing customers will make a company stand out in terms of how well they engage with their customers. Knowing them on a personal level and what their interest are will help a company succeed.
Andrew also talks about how he has completed customer diligence as part of the purchase of a company.
Private equity and investment business buyers hire Andrew to complete customer diligence to reduce the risk of purchasing a business. Doing customer diligence ahead of a business purchase allows a business buyer to understand the customers stability risk before the business is purchased. In his experience this has prevented several deals from being done because it uncovered hidden problems. He also comments about situations where the customer diligence ahead of the purchase has helped to uncover new opportunities for the buyer. This is a very interesting application of customer diligence since it is primarily thought of for understanding customers as a normal course of business.
Thanks to Andrew for sharing his time and knowledge.
Andrew Deutsch is the Founder & Chief Executive Officer of Fangled Technology a B2B sales and marketing company. Prior to this he was the VP in Marketing & Business Development for North Coast Container LLC.
Driven multilingual Marketing Leader with broad based expertise galvanizing teams to develop innovative and effective strategies.
Spearheading innovative campaigns proven to drive demand and cultivate sales success in highly competitive companies and brands from conception to market success.
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The Exit Your Way Business Round Table Live Stream
customer, people, business, understand, company, marketing, selling, andrew, buy, market, diligence, sales team, conversation, talk, sales, acquisition, fangled, linkedin, person, bob
Andrew Deutsch, Damon Pistulka
Damon Pistulka 00:01
Hello, everyone, this is Damon Pistulka again with the exit your way business roundtable today with me, I’ve got Andrew Deutsch from fangled tech. How you doing today?
Andrew Deutsch 00:14
Doing great. Looking forward to a chat?
Damon Pistulka 00:17
Yeah, well, today I we’ve got Andrew and I’ve been known each other for a while now. And one of the things that I wanted to talk with Andrew about is customer diligence. And can you first of all, can you just kind of explain to us what customer diligence really is,
Andrew Deutsch 00:36
you know, when when you’re dealing with a customer, it’s not just a dude who’s going to buy stuff. It’s a human being. It’s a person who has interest who has motives and otherwise, so how, you know, how do you really relate to people and as a person, recently, I was in a conversation and they were talking about whether you’re into b2b marketing or b2c marketing, and this really, really isn’t Intelligent marketer young young person impressed me. She said, you know what I don’t do any of that I do beat ah marketing. So let’s beat age business to human. So so how do we understand who the who the people are that we’re dealing with? And how do we how do we relate to them on that personal level that can bring them to becoming an advocate for us and the brands that we represent?
Damon Pistulka 01:21
Yeah. Okay. Well, yeah, I can imagine it it is it is pretty important that that we understand who we’re dealing with, and I think in the rush to sell sometimes people forget about that. Mm hmm.
And if you if you really understand who the person is, you can understand what inspires them and what turns them off. Yeah. So so you know, getting involved at that level. You also know that there’s, there’s certain people that probably aren’t going to be the right candidate for what you’re working on, just based on who they are. And ones that if you if you really show them the benefits of what you’re doing, that solves the problems for Have them as a person, they’re going to be excited and want to do business with you.
Damon Pistulka 02:03
Yeah. Yeah. So why why do you think someone would would would want to do a customer diligence? Where are the situations where this really proves to to be beneficial for business people?
Well, usually people only think about it from the HR perspective. You know, is this somebody who’s going to fit in the culture of my business? And are we going to employ them more? If you’re looking at maybe hiring a consultant hiring an outside person? Do they align with what we do? I see it from my years and years of global sales working overseas, and really understanding what what is it that that excites this person and really would benefit Where Where are their issues? And how do they relate to those and what can we do to resolve those issues? Because if we do, they’re going to be a customer and they’re going to buy?
Damon Pistulka 02:51
Yeah, yeah, it is that understanding in really, I think about some of the some of the stuff You can’t find out as the person that’s providing a service easily. I mean, in depth people talk about surveys, and other ways to do it. But what are the main things you’re trying to find out when you’re doing this customer diligence?
Well, going, going back a step, you know, when we’re having those conversations in person, the diligence part of it is learning enough to know what you don’t know, as well as understanding who they are so that when you meet them, you can ask probing questions to really understand and most people don’t, don’t get hurt in this world. They it’s very rare that people show interest in who you are and what what you believe. And those types of situations are really important. You know, people on a date, sit at the table and just talk about themselves typically don’t end up with a second day when you go out on a date. And you go you I really want to know you. And I saw that you you’d like to have what kind of dogs do you have? And what? What kind of theater in those is your romancing in that situation. So Sam in the business place to truly show interest to understand the person beyond the guy with the wallet who’s going to sign up to? Is it advanced skill and sales? People people love to talk about themselves if you can inspire them to do so it’s even better.
Damon Pistulka 04:27
Yes, yes. I think that’s why my wife and I get along so well. That’s why I’m kind of giggling because I’m the one that doesn’t say much so. But you’re right. It is it is about it is about understanding them and understanding you know, what makes them tick and what problems they really are having because then you can, you know, you can honestly tell if your whatever your whatever, you’re selling a solution, a product, whatever, is really what they need.
Yeah. And also by by understanding, I was just recently having a conversation with someone who’s in the business Have promotional materials, they give away stuff. Her business is based on items that are eco friendly items that are made from sustainable materials and things like that. And and the business has been having real challenges selling to guys and maybe our age demographic that don’t have the same feelings about the environment that she and her colleagues had his younger people in the business. Yeah, and, and we were talking about not narrowing her scope to only selling to people who believe in that environmental issue. Because in reality, what she needs to be talking to these people about and understanding is for them to understand that there’s this demographic out there that if you hand them some some crappy giveaway product that doesn’t have meaning, it may not lead to something good but if you give them something that shows that you understand, hey, you’re you’re interested in the environment and this thermal cuff or whatever that product is, or this T shirt made from organic Cotton shows that I understand who you are and get you talking about that it gives you a better chance of now selling to a demographic that right now thinks your own phone.
Damon Pistulka 06:09
Yeah. Yeah, that’s true. That’s true. Yeah, that’s I think about Yeah, that’s, that’s pretty, pretty cool. That’s pretty cool because it is it is really relevant in making sure that your customer understands that you understand them as well.
And first, you have to understand who your customer is. Yes. Because many times your customer is not the guy who’s buying from you. It’s who they’re selling to.
Damon Pistulka 06:33
Or who they’re you so when you’re doing diligence is that one of the things that you talk about too with with if you’re actually say your say you’re doing a customer diligence for me and you’re going out and talk to our customers is that one of the things you’re trying to figure out is who really is making the buying decision? Absolutely.
Absolutely. part you know, when you start doing there’s there’s a process that we call attractiveness studies. Looking at different markets, I’ve got a product that I could sell into seven different market space are very different. One of the criteria for scoring those marketplaces is, do I know someone? What’s they? How easy is the access to those people? And and are they currently culturally aligned to what we’re doing? In other words, am I going to have to convince them that they have a problem that I can solve? Or do they already recognize the problem that we can solve with them? Yeah, there’s a lot of that customer diligence that comes into that understanding your customer and where their pains are. It may be that you have a market where, yeah, they’re, they’re interested, but it’s very small, or you’ve got a bigger one, that if they can understand that they have the problem, there’s a significantly bigger score and helping them you have to evaluate that in terms of where you want to begin. Yeah, the days of shotgun marketing, where we’re just going to put something out there and see who responds is just a waste of money when we have all this technology that can really hone in on Hit that specific demographic that we can help.
Damon Pistulka 08:03
Yeah. Well, that’s, that’s a good point too, with with, you know, when you when you do your customer diligence and you begin to understand who your customer really is, you can you can market more efficiently and better. And like you said, you don’t want to market to a million people when you know you’re going to have you know, 10,000 out of that million that are going to buy from you, the 10,000 that could be buying and not waste your time with the others if that’s the way it is.
Yeah. And that customer diligence goes all the way back to these tech, you know, and we’ve had these conversations many times about the difference between tactical and strategic marketing. Tactical are the guys that will tell you I can drive 100,000 people to your website, I can I can get you this many followers, I all of that stuff, which is fine. But if there’s a strategic thought process and understanding your customer, would you rather drive 100,000 people to your website or 10,000 People who fit exactly what your website’s speaking to, and could be your customer. And it’s going to be the philosophical argument that nobody’s going to agree on. But at the end of the day, driving 100,000 people to your website, if the website doesn’t speak to who that person is, and what they’re looking for and their problems and how we can solve it, they’re not going to be on your website for very long.
Damon Pistulka 09:22
Yeah, yeah. So for sure, yeah. And you know, there’s, that’s, that’s a that’s a good thing, too. And like you said, it’s the age old debate of is it volume? Or is it quality? Or can you integrate volume and quality and those kind of things to when you’re talking about traffic and other stuff, but I do. I do know from our experience in really doing diligence on our customers to better understand and have a better avatar. Mm hmm. That that really has helped us an awful lot. And I got to imagine that if you’re going out and doing that, as a part of a customer diligence process for someone you do Get a pretty good avatar from that.
Yep. And it’s much easier to do the day that you recognize the golden rule of marketing. You’re not your customer. Yeah, that’s that that begins all conversations in marketing. If I opened a store today only selling stuff that interested me, I’d be very lonely and very broke. Yeah, there’s my what I like and what what I wanted is very different many times than what the customers I deal with one.
Damon Pistulka 10:27
Yeah, right now and now, man, that’s a good one. That’s a good one. You are not your customer. That’s for sure. So, um, what you know, when you’re out there doing this customer diligence? I mean, what are some of the methods you used to go out and just understand more about these customers? Number one, LinkedIn.
Yeah. Social media, looking at their social media presence. Number two is just a regular Google search. Yeah, I’d love to find out that the guy that I’m going to meet is a Boy Scout leader. D In their, in their, whatever their their religion happens to be. I also love to find out the guy’s kind of affiliated with some sort of odd, radical sort of mindset ideology. So I don’t I can step on that landmine. Yeah. You know, there’s a lot of things that you can find out. The other thing is, if if you when you look at the LinkedIn process, you know you’re going in, you’re looking at their profile, the part of the most people neglect is Who are they connected with, that you’re connected with? It’s a relationship. How many times I picked up the phone and call Bob, because Bob knows Jim, who I’m going to be calling and go, Hey, Bob, I’m giving Jim a call. If you had dealings with him in the past, and Bob’s always because Bob’s my connection and we’re a community. Bob will tell me Hey, watch out for the pitfalls. Don’t Don’t talk about the michigan football team. He hates Michigan. Yeah. Or Bob is really into the environment. So if you’re going to talk about your product line, make sure you bring up the sustainable stuff. Yeah, learn a lot from the original format of LinkedIn. Which has morphed into this other thing was getting people to introduce you to people who want to do business with, you build your network, you can see their network and go, hey, I’ve been wanting to talk to that guy at this chemical company. I can’t get him to call me. Could you please introduce me? Yeah, that’s, that’s a very important way of looking. And then the other is you take a step back, and you look at the organizations that they were involved with, and how long they were there. So if you see a guy who’s had a different job every year for the last 15 years in a sequence of companies that don’t make sense, yeah, kind of give you a little bit of background of who they are. Whereas here’s a guy whose career sequence in a way that makes logical sense. And it’s even something you can bring up in the conversation if you don’t sound too stalkerish when you do it, but I like to have a real good idea of who this person is from from their career from their life. And then the goal of the first conversation is to get them talking. Yeah.
Damon Pistulka 13:00
Yeah, yep. What are some of the interesting things that you learn? That you learn when you’re doing this? I got it, you gotta believe that there’s little idiosyncrasies, do you learn that they’re surprised about or what what were some of the things that come up
in from from a strictly a customer perspective. It’s all over the place. You know, when I was in when I was in the global market and I and much of this tech didn’t exist, there was a lot less information. So most of the stuff you learned about the customer honed your skills of really getting that conversation going. Because you you’re you know, the only communication was in the early days was telexes and faxes and things like that. And then it came to the internet. And you could email back and forth but even though it’s so impersonal, so you really had to have a skill set of when you got face to face with somebody. And you know, you travel across the world and you’re now somewhere for this much time, how to ask the questions to really get to know somebody and I found People with interesting hobbies interesting other things that they do in their life besides the business that really endeared the relationship. And I also found some people that were truly objectionable that I still had to do business with a new immediately from what I heard and where they’re where they’re, you know, where their
Damon Pistulka 14:23
their background and stuff took them that although this wasn’t somebody who I really would want to, you know have had dinner with but I would have to let’s stick to business and let’s figure out still what motivates this guy to want to do business with us.
Damon Pistulka 14:38
Yeah, yeah. Yeah, that is that is the one thing you know, you get into the someone’s social media and you go Oh, yeah, that’s not so cool or not something that you agree with or that could be made.
And it’d be clear there have been cases where I’ve just chosen not to do business with some Oh, yeah, yeah, yeah,
Damon Pistulka 14:57
yeah, that’s gonna happen. Yeah. That’s for sure. So, I mean, when you we talk about this and customer diligence, I mean, what are what are the times that you you’re typically called upon to do this?
Well, usually when when I’m doing outward outward reach or or following up on an inbound lead for someone who wants to use services or otherwise when I was in sales, from the product perspective, selling industrial machinery and packaging, all the things that I’ve sold over the years, it was me researching to to be able to see their needs and where they are for that purpose. Now, a great deal of the customer diligence I do is either I see a potential client that could they could really benefit from the services we offer, and I’m going to call on them and get in. Or I’m doing a research project for one of my clients in private equity or mergers and acquisitions, that really wants to understand more than what the financials will show them in a company. So that could have a clear understanding of the kinds of people who would be involved. If they bought the business, their skill sets, there are a lot of other things that aren’t necessarily sales related. But related to how is that culture going to work once the acquisitions completed?
Damon Pistulka 16:15
Yeah, yeah. Cuz that would be that would be interesting in an m&a situation because you’re going to be I mean, those buyers are spending millions of dollars sometimes And oftentimes, and understanding the customers how happy they are, what’s going on in their minds, is could be that could be the difference between a good investment and a horrible investment.
Absolutely. In in a big part of my business right now is helping private equity and m&a look into companies. I look at anything that isn’t on the financials, or the marketing and sales alignment. And and that that skill set of really being able to dig in and understand people were able to create vision into a company that typically is is Unknown in the m&a process and do it in a way that completely does not alert the employees that their company’s possibly going to be sold. Yeah, but but in that I’m getting with the salespeople getting with and doing the research both internally and externally through through the through our methods, we get a real clear picture, not just of what the numbers show, you know, what is the relationship between the sales and the marketing teams? Are they are they aligned? Are they aligned with the brand of the company? Where Where are they viewed in the market compared to competitors? Do they understand the market space? All of that stuff comes from that customer diligence?
Damon Pistulka 17:39
Yeah. Now when you do this type of diligence Are you typically an outside contractor to these companies so that when you’re I’m going into now you’re going and talking to a customer is it that you’re Andrew from the the company are angry Andrew fangled tech marketing and doing that
the majority of the work is as as a consultant. So in an m&a situation where there’s doubts and the ownership of the company agrees in the best fit scenario, one of our team is brought in as a consultant under the guise that we’re there to help grow the business and look for improvements to the go to market strategy, rebranding, whatever it is, we can get in and really talk with the employees. Sometimes the potential acquisition won’t allow that. And then we have other methods of being able to being able to do that, that are kind of proprietary to how we do it. Yeah. But completely, completely aboveboard, completely, you know, honest and interested. We we can do. We’ve got a team that does nothing but market research. So we can do a voice of customer survey for for a potential acquisition. To find out not just about this company, but where they are in the marketplace talking to that we can look if they’re in the distribution market, talking to distributors about what it’s like to do business with companies within that entire industry. And who gets, you know, what’s the difficulties? What are the benefits? Who’s the best companies to work with? There’s a variety of different techniques that we have, depending on the level of accessibility that we gain. Okay.
Damon Pistulka 19:27
Yeah. That’s cool. Yeah, it’s just it’s an interesting subject because I think that a on the m&a side with the kind of work we do there, I don’t see buyers doing it often, but I think they it could lead to a lot a lot of heartache if you don’t,
it was interesting, interrupted, but on that most people don’t do it because they don’t know they can.
Damon Pistulka 19:50
That’s a great point. That’s a great and
we’ll talk originally when we started doing it. Many people said to me, and I didn’t agree but Many people said to me, Hey, you know, you’re dealing with finance people who will swear up and down that when they look at the balance sheet, they know everything about that company, and their egos are into that. And then when you meet these people who who’ve been portrayed in this very odd sort of way, they’re not that way at all. It’s, it’s they didn’t know that the option was available. And they go, gosh, you know, I can’t tell you how many times I’ve had doubts, and we’re not allowed to look and we, you know, there’s no way for us to have that communication. And they love the fact that we’re available to do that, and, and help them because at the end of the day, no private equity group, unless they specialize in distressed assets, wants to buy a turnaround. Yeah. But there’s another side to it. Imagine, we’ve gotten into companies where we recognize that because the marketing and sales team lacks certain skill sets. There’s massive market upside that they’re completely unaware of. Yeah, and that that’s huge. Because now Not only are you buying this company, but we can put a playbook together. Day one. And instead of you spending the first three to six months post acquisition doing discovery, we’ve already done the major part of it, and we can get the business and grow that business faster.
Damon Pistulka 21:15
Yeah, that’s a good point, because I never thought of applying it that way. It’s going out and figuring out about what you’re doing right what you’re doing wrong. You can get your own. You’re buying business.
Sure, sure. Yeah. I mean, the probably the biggest argument that folks have on day one is I had no idea that I bought this. Yeah. And in our case, we can you know that we get three results, one of three, one, you’re making a really good decision here. You should buy this company. Number two, holy cow, buy it now, because there’s so much upside you that no one even knows exists. And number three, hey, red flag. we’re noticing things and you know, there’s a lot of case studies that we can share with customers as to what those are, but we usually Seeing companies where, for example, you would never notice in the financials, but the guy who’s running the operation is a huge liability based on his behavior. And I’ll leave it at that. We found companies where the sales team knows that a competitor has a better mousetrap that’s come into the market in three months. And guess what, when it hits and they get to your customers, the customer is not going to be able to say no, yeah. And and you’re gonna lose all that you’re gonna lose all your sales. Yeah. Outside sales team is selling to one of seven companies in a specific niche market. And this actually happened, and we we asked the question, what you’re selling to them? What about these other ones? And the answer was, well, they’ve never reached out to us. Red Flag sales. He doesn’t prospect sales team doesn’t. Doesn’t nurture leads. Yeah, they’re just waiting for the phone to ring. Yeah, great upside. That’s a great company to buy.
Damon Pistulka 22:54
Yeah. Yeah, you can sales and that market you’re going to move into that wouldn’t be a good one to get That’s for sure.
Andrew Deutsch 23:00
Damon Pistulka 23:02
Good. Well, Andrew, it’s been great talking to you today. I think this is this is interesting for me I always learn something when we talk about this because it is such a an important subject. You know, when you talk about the client avatar, you talked about customer needs to really understand it. That makes sense. And then and then even taking that information and going back and applying it is really good. So
yeah, the best the best salespeople, the best marketers in the world do their homework. Yeah, no, no, just go out banging on doors without knowing what they’re banging on.
Damon Pistulka 23:37
Yeah, yeah, for sure. For sure. They, they know what they’re doing. And they’ve recently been we’ve learned a lot more about that. So. So Andrew, if someone gets a hold of you wants to get a hold of you What is the best way to do that? They can reach out to me on LinkedIn, or they can go onto fangled tech COMM And check out and inquire
We started a program a couple years back where we we call it the pick my brain session. Yep. If anyone wants a free consult for 30 minutes, yeah, they can, they can request and we’ll set them up and have a conversation and see what what we can do to help them grow their business, grow their brand and drive more advocates to their, to their side.
Damon Pistulka 24:19
Awesome. Awesome. Why? Again, we got Andrew Deutsch here from fangled tech on the Business Roundtable today, and Andrew is explaining a little bit about something that they do that kind of unique and that’s, that’s when they go in and do customer diligence for companies. And if you want to get ahold of Andrew, again, at fangled tech comm or check him out on LinkedIn and reach out that way. But thanks again, Andrew. Thank you. Until next time, we’ll we’ll sign off now.
Andrew Deutsch 24:49
Hey, Thanks, Damon. Have a great one. Bye.