Marketing diligence asks where new customers come from and whether that source belongs to the business or to the owner. It is a smaller stream than financial or legal diligence and it moves the multiple more than its size suggests, because it is the evidence that growth continues after you leave.
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What is examined
Lead sources by channel and their trend, cost of acquiring a customer and how it has moved, conversion rates through the pipeline, the state of the website and any organic search position, advertising spend and its return, the customer list and how it is held, and whether referrals come to the business or to the owner personally.
Why concentration is priced
A business whose customers all arrive through one paid channel is one auction price change away from a different business. One that depends entirely on the owner's network is not transferable at all. Diversity of demand is worth real money, and it is one of the things a seller can genuinely improve in the year before marketing.
How to present it
Show channel mix over three years rather than a snapshot. Show retention and repeat purchase where they exist. Own the weak parts: if referrals are personal, say so and describe what has been done to institutionalise them. Buyers discount what they discover far more heavily than what they are told.
Questions people ask about marketing due diligence
Does a small business face marketing diligence?
A light version, usually folded into commercial diligence or handled by the buyer themselves.
What if I have no marketing at all?
Say so. A business that grows on word of mouth is a real business; the question is whether the mouth is yours.
Is the customer list an asset?
Yes, and its transferability is a legal question as well as a commercial one. Consent and privacy rules apply to what can be handed over.