The five-question customer call framework.
Schedule 15 to 20-minute calls with the top 10 customers. The seller should introduce you, then leave the call. Customers will tell you the truth when the seller is not in the room.
- Q1: How long have you worked with them, and what do you buy? Establishes tenure and the nature of the relationship. Long tenure with a broad product or service mix is stronger than a short or narrow relationship. (Q1)
- Q2: What would it take for you to leave and work with a competitor? The most important question. Listen carefully. If they have a clear and specific answer, that is your risk to price. If they struggle to think of a scenario, that is a signal of strength. (Q2)
- Q3: Are you aware the business is being sold? If yes, ask how they feel about it. If no, gauge their reaction when you tell them. A customer who says 'I don't care who owns it, we just need good service' is very different from one who says 'I only do business here because of [the owner (Q3)
- Q4: What is your approximate annual spend? Validates the revenue figures the seller gave you. A customer who says they spend $200K but the seller shows $400K from that account needs explanation. (Q4)
- Q5: Any concerns with quality, service, or delivery lately? Surfaces existing problems you would inherit. Even one customer flagging a recurring issue is worth investigating before close. (Q5)
- How long have you worked with them, and what do you buy? transforms What would it take for you to leave and work with a competitor?: Step 1 naturally follows from the prior action.
- What would it take for you to leave and work with a competitor? transforms Are you aware the business is being sold?: Step 2 naturally follows from the prior action.
- Are you aware the business is being sold? transforms What is your approximate annual spend?: Step 3 naturally follows from the prior action.
- What is your approximate annual spend? transforms Any concerns with quality, service, or delivery lately?: Step 4 naturally follows from the prior action.
Scoring and action thresholds.
Decision gate for scoring and action thresholds. Proceed when: Top 5 customers average 4 to 5 on retention confidence.
- Reconsider: Top customer scores 2 to 3. Add earnout tied to retention, extend seller involvement to 12-plus months.
- Proceed: Top 5 customers average 4 to 5 on retention confidence.
- Walk: Any top 3 customer scores a 1, or two of the top 3 score a 2 or below.
- Reconsider: Top customer scores 2 to 3. Add earnout tied to retention, extend seller involvement to 12-plus months.
Customers will tell you the truth if you give them space to talk
The seller will tell you customers love the business. Customers will tell you what would actually make them leave. Call them. The 30 minutes of calls is the most valuable diligence time you will spend in the entire process.
This course is operational guidance, not investment, legal, tax, or financial advice. SilverShore Partners is not a registered broker-dealer or investment adviser; in qualifying private-company transactions we may operate within the federal M&A broker exemption under Section 15(b)(13) of the Securities Exchange Act. Confirm specifics with your own advisors.