Written by Jack Bowen and Bill Keller
For private equity organizations, the cup runneth over.
The post-pandemic period has been a boon for PE markets, with more than a trillion dollars flowing into portfolios in 2021 alone. However, in the face of an uncertain economic environment, it will take more than legacy practices to keep fueling the PE fires.
With the unending tasks of assessing, aligning, and optimizing their portfolio companies’ performance to maximize growth opportunities, marketing is one line item that often gets short shrift at PE organizations. But no longer: Simply relying on the existing talent within a portfolio organization can increase the risk of achieving the same old, same old – leveraging historically ineffective approaches while hoping to yield better results.
It's time to learn from the behaviors of the past, along with what’s working elsewhere, to ensure continued positive growth. In our view, it’s a great time to build – or tune -- your growth engine. By aligning with experienced fractional growth executives and world-class data analysts, you can add to your arsenal a potent weapon to drive performance and increased ROI.
From the initial assessment of both performance and staff capabilities, to ongoing growth optimization or preparation for an exit, your fractional growth/analysis team will conduct a deep performance analysis at each stage. This will add value by helping you to understand current inefficiencies and untapped opportunities, while reducing and reallocating budgets/costs.
2. Identifying and eliminating siloed operations and performance reporting that are limiting success
The age of big data has brought with it the age of complex operations. So, while marketing is focused on leads, operations is focused on prospect contact and conversion, and IT on data. Coordinating these efforts via your fractional growth/analysis resource is the best way to ensure that the alignment of these three silos happens. Without integration, optimized operational performance within the silos will result in reduced overall efficiency.
3. No longer mistaking performance reporting for performance analytics
Without fail, every portfolio company will claim to have a unified view of the customer, an understanding of their prospect’s contribution to the company’s ROI, and a team devoted to reporting and analysis. However, after more than two decades doing performance marketing analysis, I can tell you that such a unified view of the customer is as elusive as Sasquatch. Without dedicated reporting efforts in place, you risk failing to define – and understand – the key metrics related to the prospect’s contribution.
That’s why the starting point of any analytic approach is having dedicated resources for understanding and reporting on operational performance. In this age of AI/machine learning, charts and graphs from Excel or a dashboard, while foundational, cannot provide the prescriptive insights needed for performance optimization. While most companies cannot afford nor even require a full-time data statistician to do predictive modeling, you likely can get the needed insights from your fractional growth and analytics resources.
4. Digital transformation requires companies to align resources with opportunity/potential to maximize return.
While resource allocation and treatment differentiation should span your portfolio company’s entire operations, here are a few critical examples:
As an example of the power of this approach, in a single engagement optimizing sales performance for a $150MM home improvement provider for a PE firm, we were able to align leads with the strongest sales propensity and assign them to the best salespersons, resulting in a $28MM annual increment.
Can we help you to tune up your growth and analytics engine for efficiency and success? Please reach out.