Every business is digital in some way, shape, or form. The digital world is now an integral part of day-to-day operations for companies, and it will continue to disrupt how they work for years to come. For those looking to acquire a new business, digital needs to be a high priority.
It is a strong statement, but it is true: if you are not looking at digital data as part of your B2B due diligence process, you are ignoring a fundamental part of the business you are looking to acquire or improve.
The process of due diligence insists that organisations investigate a prospective investment to gather as much information as possible. If you plan to judge how a business is performing in the here and now only, digital data may not be of much use. However, if you want to thoroughly investigate the backlog of data that is available and use it to extrapolate trends to predict market trends, you are in the right place.
Market Research Isn’t Enough.
Traditional market research would have you believe that analysis of static consumer demand is all that you need to make a fruitful acquisition. We couldn’t disagree more. Without real-time data, how are you to predict your growth potential? Without access to a variety of digital data, you’ll be looking at a shot in the dark guess at best. By accurately assessing a businesses’ digital assets, you can have accurate insights into a range of important factors. Digital data can illuminate market demand and its growth potential. It can also reveal more about audience behaviour and demographics, user experience, new customer base opportunities, web and business strategies, and much more.
B2C Embraces Digital Data.
Many of the worlds most successful B2C brands have realised the immense value of digital data. COVID-19 has given B2C companies a sense of urgency when it comes to digital transformation and the efficient use of digital data. “The road to recovery is paved with data” according to Kate Smaje, a senior partner at McKinsey and Company. Digital data allows investors and companies to make better decisions in volatile economic circumstances, and make those all-important decisions faster.
In general, the pandemic has pushed forward digitisation to a degree that no one expected. It is thought that digital adoption in both consumer and business circles has been fast-tracked by approximately five years. B2C businesses have realised that they have to embrace digital data. With a record number of consumers embracing eCommerce and the integration of technology into our lives at every turn, the use of digital data is no longer optional, it is essential.
It’s Time for B2B to Embrace Digital Data, Too.
When it comes to due diligence, you can’t disregard data as a B2B company. By using current and historical digital data on audiences, activity, consumer sentiment and operational efficiency, brands can quantify equity, market position and performance. Not only this, but they can also see any potential growth opportunities. If you are acquiring a business, the opportunity for growth is a priority. As a result, you’ll need digital data to confirm that market growth is expected.
As time goes on, more investors are embracing digital. However, we believe that it needs to be seen as an essential part of the due diligence process by all involved. After all, without digital data, you can’t learn much about your customers and the market. Why leave yourself in the dark?
Now that we’ve outlined the general reasons why digital data matters in your B2B diligence process, it’s time to look into the ways you can use digital data.
To Determine a Web Strategy.
You can’t create and implement a successful web strategy without utilising digital data. If you are acquiring a new business, for example, exploring a company’s current web strategy will illuminate fundamental strengths and weaknesses. To do this, you need data and lots of it. In a digital world, an effective web strategy is absolutely essential for a business to succeed. This is especially true during the Covid-19 pandemic as consumers have had to rely on digital channels. The statistics speak for themselves. In the US, eCommerce sales jumped from 11.8% to 16.1% from 3rd quarter of 2019 to the 2nd quarter of 2020. Digital data can shine a much-needed light on website issues, enabling companies to better appeal to consumers. Such as…
Is the website offering customers a pleasant user experience? Is it mobile and tablet friendly?
Are there any clear abandonment points that need to be fixed?
Is the SEO strategy effective?
Without real-time digital data, you cannot determine the true state of a company’s current web strategy.
To Analyse and Adapt Marketing Strategies.
Effective marketing is essential if a business is to succeed. Just look at the big B2C companies such as Amazon. They’ve redefined their industries in terms of both marketing and customer experience. Often, B2B businesses feel too comfortable doing things ‘the old way’. The problem is that B2B businesses may rely solely on direct and outbound techniques to market their services and think that is enough. In an increasingly digital, connected world, it is not enough. By using digital data to examine how the sector competition is marketing their company, you may learn of new ways to market to your target audience. Using digital data, you can answer these questions and more:
Are there any particularly successful marketing techniques that are successful in your chosen sector?
Can the business implement these techniques effectively, or is a new strategy required?
How much will it cost to implement new, more effective marketing strategies?
How many customers is the business likely to attract using the chosen strategies?
Can the current employees implement the required marketing strategies, or do you need to start hiring?
By analysing audience web movements such as click-through rates, engagement, customer journey, conversion, cost per lead, competitor spend and performance, it can help you gain a clear picture of the health of the company’s marketing efforts.
To Analyse Current Trends.
By analysing up and coming trends, you can establish which products and strategies are going to dominate your industry. For example:
Which products are selling well currently?
Which products are seeing a significant increase in demand?
Are your competitors engaging in new industry trends? How successful are their efforts?
The moral of the story is that digital data matters when it comes to your B2B due diligence process. With each day that goes by, it matters more and more. Without an accurate picture of a company’s marketing and web strategies, there is no way to gauge how it is performing.