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Mike Lieberman, CEO and Chief Revenue ScientistMon, Jan 17, 2022 10 min read

How Private Equity Leverages A Growth Agency To Drive Results At Portfolio Companies

Growing revenue at portfolio companies

Private equity (PE) and venture capital (VC) firms have a unique set of challenges. Their interests lie in multiple companies instead of just one.

While most CEOs and business leaders are focused on the success of their single entity, these people are focused on the success of multiple entities.

PE and VC leaders are also faced with supporting multiple disciplines at their portfolio companies. When their businesses need help with finance, operations, sales, marketing or service, as good stewards of their investors they are ready to help when needed.

One of the major challenges facing portfolio managers at PE firms is helping their family of companies grow.

There are a number of ways a growth agency can help these companies achieve their growth goals.

Get A Fast Start

When you’re an investor you can take a long-term perspective on the value of your investment, but that doesn’t mean you want the business to languish with slow sales or revenue growth.

Some companies try to fix this by hiring. Hiring should NOT be a process that you fast track. Making the wrong hire takes years to recover from. In today’s hiring environment, candidates are fielding multiple offers and taking their time in selecting the right opportunity.

But you might not have time to wait months to find the right candidate. The right growth agency should be able to get started immediately. However, starting isn’t the goal.

Delivery is the goal. You want an agency that quickly gets the strategy, tactics, campaigns, analytics and technology planned, deployed and producing results.

Instead of a traditional agency that assigns a fractional account team to your company, consider an agency that deploys a dedicated team.

Rather than having work dripped out month over month based on availability or budget, consider an agency that gets everything you need to be done in a short period of time.

Instead of working with a team that hops around from client to client during the day, consider an agency that allows their team to work with just you and your company for an entire month. They quickly get to know you, your business, your team and your prospects.

You don’t have to wait months or even longer to start seeing results anymore. With the right agency, improved performance could be just weeks away.

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Leverage A Team Of Experts

You have specific expertise that you’ve nurtured and developed over time. You should want to apply a similar set of experienced and skilled specialists to help your portfolio companies grow too.

It takes over 10,000 hours of experience to evaluate how companies drive revenue, assess the holes in their execution, review the data and then make recommendations that include an action plan along with the executional details to deliver the desired business outcomes.

You don’t want to work with people fresh out of college and you don’t want a team that has done this once or twice. You don’t want a team that is doing this for 10 other clients at the same time.

Instead, you want senior people with experiences across verticals, with companies big and small, who have been practicing their craft for 10 years or more.

These are the people who can quickly and efficiently diagnose your challenges, recommend the fixes for those challenges and then without hesitation move to design and deploy the tactics, campaigns and action plans that drive results.

You’re also looking for people with diverse skill sets and a team that brings in experts for technology, content creation and content production like video or podcasting.

You need people with experience in website user experience and how website design drives visitor interactions. You’ll want people who craft an emotional and compelling message that moves prospects to take action and drives engagement.

These are not easy-to-find skills, and a team like this could take months to build in-house. Instead, consider working with a team that can be bolted on to the leadership of your existing business and drive the changes required to grow revenue faster and more efficiently.

Focus On Marketing AND Sales

Revenue is a shared responsibility between marketing and sales.

This also means the people at your company must understand that marketing and sales need to work together on a revenue growth strategy.

They need to work together to create the prospect experience that helps people make their purchase decisions quickly and one where they choose you more often than they choose your competitors.

The strategy, tactics, campaigns, analytics and technology need to stretch across sales and marketing at your portfolio companies.

Data has to be collected at all stages of the prospect’s buyer journey. You should be looking at optimizing each stage of the Revenue Cycle, which identifies the flow of people from anonymous visitors to your website all the way through to new closed customers.

At each step, metrics and conversion numbers help identify what’s working well, what’s not working at all and what needs to be fixed.

This ongoing review of the entire cycle, from beginning to end, is one of the ways companies start to apply science to their revenue generation efforts.

It’s also one of the ways companies start to drive month-over-month revenue growth in a systematic and data-driven way.

One Team Across Multiple Companies

Since most PE and VC firms have the extra challenge of being involved in multiple companies, it’s challenging to get your hands around the issues, fixes and outcomes associated with upgrades to marketing and sales execution.

But having one company that can be quickly deployed as needed, one company with a senior team of experts and one company that is uniquely designed to work directly with your entire portfolio of companies to apply a similar set of processes, strategies, technologies and analytics makes sense when growth is one of your primary objectives.

Knowing that you have a team running strategy, tactics, campaigns and analytics in a similar way across a number of your portfolio companies gives you the confidence that revenue growth is being handled proactively.

You can then review marketing, sales and overall revenue performance across your companies with a single company responsible and accountable for driving growth. It should be the optimal configuration of resources for any PE or VC manager.

Revenue Growth at PE Funded Portfolio CompaniesEasy Access To KPIs

Speaking of access to performance data, this scenario would allow you to have dashboards, reporting and data at your fingertips. You get dashboards on your smartphone that unlock critical insights into what’s working well and what needs additional improvements.

Some of this data would be around marketing tactical performance, wider channel performance and sales performance, including enhanced forecasting, lead scoring and lead management data. You also get analysis by company, rep or channel – the options are endless.

I’d highly recommend settling on a single technology platform for all the companies. Choose one that has marketing, sales, customer service, website and operations as part of the platform.

The operations aspect would be critical and could potentially be shared across portfolio companies. Dashboards developed for Company A might just work for Company B and C. Marketing tactics that are killing it for Company B could be applied in a similar way to produce similar results at Company C.

The opportunities for more efficient deployment of resources, executing more effective campaigns and running much more efficient sales processes would be highly productive and impact revenue outcomes at any number of companies.

It’s challenging enough to drive revenue for a single company, but multiple companies always present complexities. Leveraging a growth agency that brings process, systems, methodology and technology to the table can add enhanced revenue growth across companies.

Finding the right growth agency represents an additional challenge. You’ll want one that is uniquely equipped to parachute into your portfolio companies’ businesses and quickly get marketing and sales execution fixed, tuned up and ready to go out to the market.

Companies with a steady stream of leads from a marketing machine that produces repeatable, scalable and predictable revenue are always highly valued businesses.

Square 2 — Building The Agency You’ll LOVE!

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Mike Lieberman, CEO and Chief Revenue Scientist

Mike is the CEO and Chief Revenue Scientist at Square 2. He is passionate about helping people turn their ordinary businesses into businesses people talk about. For more than 25 years, Mike has been working hand-in-hand with CEOs and marketing and sales executives to help them create strategic revenue growth plans, compelling marketing strategies and remarkable sales processes that shorten the sales cycle and increase close rates.

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