Finding Insights in Contradictions – Why Diligence Should Lean into Inconsistencies

A private equity firm was diligencing a high-growth talent marketplace platform under LOI— think Fiverr or Upwork, but more curated and white-glove, focused on placing a specific type of talent for large corporate clients. 

As part of its diligence, the firm commissioned a commercial diligence report focused on customer purchasing patterns, buying triggers, and the target’s degree of market differentiation. Most of the work pointed in the same direction: strong market momentum, repeat business, favorable customer feedback, and a reputation that appeared stronger than many competitors. 

But one data point stood out. The company’s net promoter score, or NPS, was mediocre. 

The Situation:

That incongruity gave the PE fund’s investment committee pause. If the company truly had strong customer loyalty, market share gains, and a compelling reputation, why did its NPS not reflect that?

The concern was not academic. Investors worried the low NPS could be an early warning sign of weaker customer loyalty, slowing growth, or hidden brand issues that could ultimately weigh on returns.

Rather than dismiss the inconsistency, the PE firm leaned into it. That decision led to a more nuanced understanding of customer behavior, competitive dynamics, and the target’s go-to-market opportunity.

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Jargon Explained: Net Promoter Score, or NPS, is a commonly used proxy for customer satisfaction, loyalty, and referral propensity. Customers are asked how likely they are to recommend a company, product, or service on a 0 to 10 scale. Respondents scoring 9 or 10 are considered “promoters,” 7 or 8 are “passives,” and 0 through 6 are “detractors.” NPS is calculated as the percentage of promoters minus the percentage of detractors. While imperfect, it is widely used as a shorthand measure of brand strength and customer advocacy.

Diligence Insights—Reconciling the Incongruity:

The first step was to test whether the NPS result itself was unreliable. The original survey had a statistically significant sample size, but given the disconnect, the deal team commissioned a second survey. The results came back consistent with the first—the NPS remained low.

With the survey findings validated, the diligence provider went back into the field. It re-interviewed a subset of customers, spoke with additional customers of competitors, and asked more targeted follow-up questions. Those conversations proved highly revealing.

The answer was not that customers were dissatisfied. It was that this market operated differently than the NPS framework implicitly assumed.

Customers in the industry behaved in an intensely competitive, if not cutthroat, manner. They were reluctant to refer vendors to competitors, even when they held those vendors in very high regard. In some cases, demand for talent could surge unexpectedly, which created an additional incentive to keep trusted vendors to themselves in order to preserve access and capacity when needs arose.

In other words, the low NPS did not reflect weak customer satisfaction or deteriorating brand strength. It reflected a market structure in which customers intentionally avoided referrals, even for highly valued providers. The contradiction was only apparent. Once the diligence team revisited its assumptions, the data points fit together.

How Diligence Changed the Deal Perspective:

These follow-up findings did more than resolve an uncomfortable diligence inconsistency. They gave the PE firm a deeper understanding of how customers actually made purchasing decisions in the category and how competitive behavior shaped vendor relationships.

That insight increased confidence that the low NPS was not foreshadowing slowing growth or brand erosion. It also informed how the firm thought about post-close value creation. If referrals were structurally constrained, future growth would need to come less from organic word-of-mouth and more from customers switching firms and bringing the company along, deliberate go-to-market investments, account penetration strategies, and clearer market positioning.

What initially appeared to be a troubling outlier ultimately became a source of commercial insight.

The Crux:

When diligence surfaces a data point that seems not to fit, the instinct should not be to explain it away. It should be to investigate it further.

Had the investment committee or the deal team ignored the target’s weak NPS as an outlier, it would have missed a valuable insight into customer behavior, competitive dynamics, and the practical limits of referral-based growth in the market. By insisting on reconciling the inconsistency, the investors gained greater conviction in the deal and a clearer view of how to create value post-closing.

Seeming contradictions in diligence often point to one of two things: a real problem or a flawed assumption. Either way, they are worth pursuing. For investors, some of the most valuable insights are often found exactly where the data does not appear to line up.