Platform vs Add-On: Customer Research for PE Deals

Platform Acquisition CDD

Primary question: Is this customer base commercially viable as a standalone investment?

Sample design: 50-200 interviews from the target’s customer base, stratified by segment, tenure, and engagement level. No cross-company component needed.

Key evidence dimensions:

• Retention risk and churn drivers
• Competitive positioning and moat defensibility
• Pricing power by customer segment
• Growth potential through expansion and new customer acquisition
• Customer concentration risk

Evidence standard: IC-credible findings on each dimension with segment-level granularity. The thesis validation matrix maps each assumption to customer evidence.

Add-On Acquisition CDD

Primary question: Does combining this target with our platform create customer-validated value?

Sample design: Three groups — platform customers (30-50), add-on target customers (30-50), and overlap customers (10-20). Total: 70-120 interviews.

Key evidence dimensions (in addition to standalone CDD):

• Cross-sell potential from platform to add-on product
• Consolidation willingness among add-on target customers
• Integration priority and willingness to pay for combined offering
• Pricing tolerance for the combined entity
• Retention risk created by the acquisition itself (change aversion)

Evidence standard: Synergy assumptions must be customer-validated. Cross-sell projections backed by platform customer intent data. Pricing assumptions validated by both customer groups.

Decision Matrix

For add-on acquisition methodology in depth, see Add-On Acquisition Customer Research. For the overall PE CDD framework, see Customer Research for Private Equity.