All business growth opportunities can benefit from digital due diligence. The important thing to remember is that due diligence can take many forms. For example, due diligence for acquisitions will naturally involve a holistic appraisal of the target company, whereas mergers between companies may require a more in-depth appreciation of technology and culture.
For this reason, best-practice methodologies will emerge and develop organically in relation to each new and unique opportunity to evaluate risk. If you require assistance with business growth opportunities, digital due diligence can help at every stage.
Understanding Digital Due Diligence for Business Growth
Before continuing with an in-depth look at how due diligence can assist in business growth, perhaps a refresher on due diligence is in order.
Here is a short FAQ on digital due diligence:
What is digital due diligence?
Digital due diligence the methodical analysis of business risk. The purpose of digital due diligence is to mitigate risk factors relating to mergers, acquisitions, and internal growth.
What does due diligence involve?
Digital due diligence involves a complete audit of a company’s numbers and business processes. The data is viewed both in the context of time and competitor performance.
Can I perform due diligence using surface-level public information?
Yes. However, professional due diligence involves drilling down on less obvious but highly relevant data, providing more reliable benchmarks in mitigating risk.
Will the same due diligence strategy work for all business growth opportunities?
No. While common areas of due diligence exist (e.g., in-house practices, revenue, profit), industry-specific concerns – and insights – can alter over time with different opportunities.
Do I need “hard” or “soft” due diligence when finding growth opportunities?
You need both. Here’s why:
- “Hard” due diligence takes numbers and data into account, including financial statements, subcontractor relationships, and revenue projections.
- “Soft” due diligence focuses on the human element, including culture, working practices (staff training and performance), and buyer personas (market data).
How Digital Due Diligence Can Find Business Growth Opportunities
You may have come across the phrase “digital native” in relation to your audience. The phrase is used to describe individuals that are familiar with modern technology, including the internet, social media, and mobile devices. Any failure to appreciate the expectations of your digitally native audience can result in disruption during growth.
Digital due diligence is your opportunity to evaluate any proposed expansion plans in terms of factors such as your market readiness and your audience’s likely acceptance of new ventures. Some of the common ways in which strategic digital due diligence can help find business growth opportunities are outlined below.
Market Mapping (what are the data-backed differences between opportunities?)
The systematic analysis of risk will differ significantly between various business growth opportunities. Because types of business growth may include mergers, acquisitions, expanding your current services or extending your product lines, due diligence has been set up in very specific ways to help optimise your modelled conversion backed by data.
Depending on your growth preferences, mapping the market may include exploring elements of due diligence such as geolocation, pricing, staffing availability, engagement projections, the usefulness of emerging technologies, and efficiencies within your current setup. Market mapping tracks the market, and how your brand can minimise risk when expanding.
Brand Equity (& projections for your reputation)
Your brand equity is your current public perception. When exploring new business growth opportunities, how the public perceives your brand can be critical to the effects on your reputation going forward. A statistical analysis of web and social media engagement metrics can reveal how shifts in public perception could help or hinder any growth opportunities.
For example, when Coca-Cola changed the recipe in 1985, the backlash was severe and the company’s reputation was damaged, affecting sales. How does your brand perform on the local, national, and global stage? How can your portfolio expand into mutually supportive areas that will feel like the right fit to your consumer base? Public perception is key.
Marketing Strategies (setup and effectiveness)
Before you make any moves into business growth, a marketing health check should be carried out as part of proper and complete digital due diligence. From mergers and acquisitions to internal expansion options, a similar group of key performance indicators (KPIs) in relation to marketing strategy emerges.
For example, KPIs in relation to marketing strategies may range from a careful analysis of the sales funnel (and overall customer journey), to cost per action, cost per lead, competitor numbers, and ROI. Marketing strategies directly tie in with revenue, which can drive decisions over the true value behind various growth opportunities.
Competitor Analysis (factoring-in any potential disruption)
From specific branding considerations relating to an individual product or service, to a wider appreciation for market trends and competitor movements, tangible returns on your growth investment can be affected by the actions of outside forces. Put simply, the lesson here is never to expand into rocky territory without good reason.
For example, a clothing brand may choose to announce the launch of a new range of ski apparel. Due diligence into competitor analysis could uncover factors such as eagerly anticipated lines from leading competitors or a recent market slump in the popularity of certain shapes or colours of ski masks (in this particular scenario, due diligence could even show whether seasonal conditions for winter sports are expected to be short-lived, helping to drive data-backed decisions to hold-off for a season).
Digital Due Diligence – Your Toolkit for Business Growth Success
Low-quality data results in low-quality decision making. Of course, you might guess your way to sustainable business growth in the short term, but replicable results come from actionable insights gleaned from accurate interpretations of the most relevant data. If you don’t have the confidence you need in making the right business growth decisions, get in touch today.
Your initial consultation is FREE. Find out whether the business growth opportunities you have in mind are the right fit for both your company and your audience. Open to business growth suggestions? Find out how I can help you to target the most suitable – and profitable – expansion ideas. Get in touch today.