Nearly all the revenue came from one customer’s contract
A corporate development team was evaluating a business that transports medicines in refrigerated trucks. Almost all of its revenue came from one contract with a large pharmaceutical customer, and the price assumed that contract would be renewed. Nothing in the accounts showed how likely that was. The decision sat with the customer, and turned on quality inspections the customer runs privately.
Pharmaceutical companies inspect the firms that carry their medicines. They check temperature records, how staff are trained, and what happens when a shipment goes wrong. Those inspections are run by the customer and the findings stay with the customer. Anyone can read the published standard. Only somebody who has run one can say whether this business would pass it.
We asked the people who run the inspections
We ran expert calls with former quality leads and logistics buyers inside pharmaceutical companies, the people who run those inspections and sign off suppliers. Calls covered how temperature failures are handled, which findings end a relationship, and how much notice a supplier usually gets. We sourced across the markets the business operates in rather than the buyer’s home market.
We wrote the questions before looking for anyone to answer them, and ran the operations and the quality conversations alongside each other so the client heard both at once. The first calls happened while the price was still open, which is the only point where what you learn can still change the decision.
The team stepped away before shaping an offer
The calls came back with a clear read on how the customer judges a renewal, and they came back while the price was still open. The team stepped away. The money spent on the research was small against the capital it kept uncommitted, and the decision rested on evidence rather than on a feeling about one large contract.
The team kept the group of experts on file. Several of the same people were relevant to the next business it looked at in the same category.
