Over the past 15 years of looking at and working within all different types of digital businesses and now working as a specialist on Digital Due Diligence, I, Simon Hall have developed the 100 questions which should always be asked of all digital companies during digital due diligence.
Below they are broken down into core areas. Some of the questions will not be relevant to all companies, but knowing these questions will help you investors make better decisions when choosing companies to invest in.
These are also just the beginning of the research I complete when reviewing a company for a digital due diligence report and depending on the answers I delve in deeper into critical areas to produce a fully rounded review.
DATA
During Due Diligence getting a full understanding of the data of any company will not only open up a deeper understanding of the company but the maturity level of data management and how the company are using data to drive sales forward.
How is the company collecting data?
Which feeds are they taking data from - digital marketing, direct, POS, sales funnels etc?
Where is the data stored?
Security and legalities (GDPR) - how have they managed this and systems in place?
Do they have a single customer view of a customer - with all touch-points attached?
How are the company querying the data to answer questions?
Reporting and analysis - What reports are they producing regularly?
How is the company using data to make decisions?
Is the data leading the decision making - If so, how and when?
What are the companies critical KPI's - Why?
How is the data being fed back into acquisition Marketing?
How is the data being fed into retention marketing?
Are they using real-time AI analysis of the data to make decisions on the platform or across marketing channels (personalised content)?
COMPETITORS
Understand the competition in the vertical, who are the most significant threats and what are they doing well. How will the target company compete and accelerate?
Who are the five main competitors?
How are they tracking the competitors?
What are the competitors doing well?
Why is the target company better/
How do they differentiate themselves?
What are the dangers posed by the competitors?
How easy is it for a competitor to enter the market?
What are the five things the company will do to stay ahead of its competitors?
How do we ensure team members do not move to the competition and remain loyal?
If they could take three things from their competitors, what would they be?
Team
Understand the team who are running digital is essential, understanding their critical skills but also any potential skill gaps which need addressing.
What is the average retention rate in the company - and how does this relate to the digital team?
How big is the digital team?
What roles do they currently have covered within the digital team?
What roles are they missing and plan to recruit?
What are the critical priorities for the next 12 months for the team?
What are the best decisions the team have made in the past?
What are the most significant issues the team has had with marketing?
How are they analysing campaigns, what type of reports are they currently reviewing? Are they missing anything?
What are the teams top 10 KPI's they review?
If they could change one thing about marketing, what would it be?
Which brands do they admire when it comes to brands?
Favourite websites of other companies?
What are the individual team members goals for the next 12 months?
ACQUISITION
The start of all customers, how a company creates awareness and then drives traffic to its digital platforms explains how quickly they will gain traction and grow the business.
Which acquisition channels are they currently marketing?
Who are the target customers - how are they developing a picture of whom to target?
What is the testing strategy for content ads?
When they launch a new campaign, do they prepare a data dashboard?
Split between awareness and direct response campaigns?
Do they track different KPI's based on the objective of each campaign?
How are they reporting on acquisition channels - Daily, weekly and monthly reports?
Which channels have they tired previously tested which did not work?
Which channels are they planning on trialling?
Where is the ceiling on current channels - do they have room to grow?
Are they over-reliant on any individual channel?
How do they manage budgets - do they change depending on results and optimise accordingly?
Where do they think the quickest wins are with increased budgets?
What are the long term plans for acquisition/new tools etc?
Who is the team/agency who are executing on the acquisition channels?
Where are there gaps of expertise in the team or agency support?
Customer acquisition journeys are they mapping these and then developing improved routes?
On PPC - can they talk through the bidding strategy, and are they automating it?
CONVERSION
Once traffic has been acquired for the website, the company needs to convert the new potential customers, how is the company managing this conversion funnel to maximise all acquisition marketing spend.
Can we see reports by individual channels and how the company have developed conversion over time across each channel?
Have they mapped key conversion routes?
Have they a 12-month plan for testing and learning?
What user experience testing have they carried out in the past?
Are they currently using any CRO tools?
Do they offer personalised content online to improve conversion?
Are they testing email content with personalised conversion?
Does customer service follow-up if somebody drops out of the conversion route mid-flow?
Which areas do they want to change/what areas do they feel are lacking on conversion?
Does the company have a dedicated CRO team?
If they are not doing any CRO testing what are there plans for doing CRO.
Are they looking at their competitors and understanding how they are converting customers.
Do they complete customer research to help improve the experience, if so, how often and how?
RETENTION
The final part of the process is retaining customers, ensuring they remain loyal, become advocates and support the business going forward.
How is the company segmenting customers?
How do customer's move through these segments?
Do they relate converted customers to the primary acquisition channel to review which channels are converting long term customers and optimising the channels accordingly around media spend?
Do they run a loyalty scheme?
How is the loyalty scheme set-up? Do they manage it and report based on the sales it creates?
Do they understand the lifecycle of a customer?
How are they moving customers through the lifecycle, and what are the touchpoints?
Have they identified the "Point of Loyalty" where a customer is likely to stay for life?
If so, how do they move the customer's through this funnel?
Lapsing customer's - how are they managing churn?
Life cycle campaigns - which ones are the running and how are they optimised and reported on?
Do they personalise content based on the previous conversion?
Technology
What technology stack are they using?
List all different technology that the platform is connected too, key integrations and back-up facilities and plans.
Is its proprietary technology, opensource or licence based?
How was the tech built - agency or internal team?
What are the checkup and redundancy plans for the technology?
How is security managed across the platform?
Hosting and general maintenance - how is this accomplished and performed?
What is the roadmap for development?
A current list of outstanding development projects?
Key features of the platform - are they bespoke to the company?
Long term plan for the platform - will this need to be replaced or has it the long term growth plan?
How easy is it to integrate with new technology?
What is the development process from brief to go live?
How do people find the technology to use internally and customer review?
Does it have the capacity to scale, and if what can it manage from a traffic/usability to manage?
If managed internally - which skillsets do we have internally to manage the system
If managed externally, are we over-reliant on them - Is the company happy with the service?
Miscellaneous
The final 4 questions are broad and focus on the team’s understanding of goals and finally the most important question when you are investing.
Does everyone in the team agree on the objective?
Can they list out the strategy they need to follow to get to the objective?
Do the team have the tools (or plan to get the tools) to be able to execute the strategy?
Do you like the team and do you want to work with them?
When the company has answered all the questions, the answers often reveal additional questions to answered, and we delve deeper as part of the digital due diligence process.
Simon Hall then ranks each of the answers between 1 - 5, with five being extremely satisfied and one being extremely unsatisfied.
If a company cannot answer the question, it is N/A but gets highlighted as an area of concern.
Once we have the final answers, I rank each section; Green - Excellent, Yellow- Ok and Red- Challenge/needs to be addressed.
I can then give a clear view of how the digital business is performing. While also addressing the issues that need reviewed and look at potential opportunities to fix the challenges presented.
We have this as the basis of our digital due diligence audits to give you a greater understanding of the business, opportunities and challenges.
To find out more please contact me directly here