Why Voice of Customer Research Matters More Than Ever in Private Equity

We all know how it goes, in private equity, sellers often control the narrative. 

Management teams highlight strengths, downplay weaknesses, and steer buyer attention toward favorable metrics. 

But there’s one group that can’t be scripted: the customers.

Take a recent packaging deal as an example. 

On paper, the company looked strong:

• consistent revenue growth
• sticky contracts
• a leadership team that projected confidence

Yet when investors went directly to customers, the story shifted. 

Key accounts expressed frustration with service, some were actively exploring alternatives, and several noted that a competitor’s innovation pipeline was stronger. 

What looked like a safe bet suddenly came with real risk.

This disconnect illustrates a fundamental truth: you don’t know the real story until you hear it from the source of all revenue: the customers.

So why does customer research matter more than ever? 

Studies show that 70-75% of M&A deals fail to deliver the expected returns.

Daniel Grainger, who leads T4’s Private Equity practice, puts it plainly:

“After completing nearly 200 PE customer diligence engagements, we’ve seen patterns that most firms miss. In our analysis at T4, roughly 1 in 11 deals contain customer-related surprises significant enough to kill the deal or trigger major price renegotiations.”

When nearly 10% of transactions encounter customer dynamics severe enough to derail or dramatically reshape the deal, the need for deeper intelligence becomes obvious.

Beyond this, in today’s environment, value creation depends on operational improvements, retention, and growth, all of which hinge on customer relationships.

Understanding questions like these is no longer optional:

• How loyal are customers really?
• What switching risks exist beneath the surface?
• Are competitors winning on innovation, pricing, or service?
• Is there concentration risk tied to a handful of large accounts?
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The answers don’t just affect pricing models, they determine the feasibility of value-creation plans.

The fact is: firms that invest in customer research gain a sustainable edge. 

Customer intelligence not only derisks deals but also uncovers opportunities for growth that competitors overlook.

Done well, customer research can:

• Validate revenue stability and retention assumptions.
• Reveal hidden churn risks before they become value killers.
• Highlight cross-sell, upsell, or innovation opportunities directly from the customer’s perspective.
• Inform post-close value-creation initiatives grounded in what customers actually want.

In a landscape where multiple expansion is dead and competition for deals is fierce, the ability to systematically listen to and learn from customers may be the difference between outperformance and underperformance.

If you’re ready to gain your edge with customer research - get in touch with us, we’d be happy to share what options make sense for your next deal.

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