Digital Marketing Primer for Private Equity Firms
There are a lot of buzzwords surrounding digital marketing but the premise is simple — digital marketing is the process of creating, managing, and executing a marketing plan that uses digital technologies to reach and engage customers. As part of this marketing plan, a private equity firm needs to focus on inbound lead generation as a tool to maximize revenue across all the companies in their portfolio.
As a private equity firm focuses on value creation across all companies in their portfolio, a focus on inbound lead generation marketing is an important tool.
For B2B and B2C portfolio companies of private equity firms, digital marketing has become an essential tool to connect with their customers, create a relationship and make sales. This has been a standard in B to C for many years, and is quickly gaining traction in B to B. This is because the methods are cost effective and because they work.
“Digital marketing platforms allow you to define your reach, but they also enable you to expand your reach to potential customers more than anything else you could do,” said Craig Group Founder, Summer Craig. “Your company will connect and engage with targeted companies or consumers but you’ll also be able to enlarge your target market in ways you might not expect.”
Private equity firms need to focus on their value creation efforts for their portfolio companies using a variety of strategies, including a digital marketing and demand generation strategy. A good digital marketing plan is the gateway to success for any firm focused on growth across their portfolio. Here are some things to think about as a company evaluates its marketing plan.
WHAT IS DIGITAL MARKETING AND WHY IS IT IMPORTANT FOR PRIVATE EQUITY FIRMS AND THEIR PORTFOLIO COMPANIES?
Essentially, digital marketing is the promotion of products or services using the internet and other forms of digital communication. In an increasingly competitive market, it can be a struggle for a business to connect with their target market. Digital marketing helps a company reach more customers, but most importantly, it helps them target the right ones.
“In B to B businesses, the company may only want to close a limited number of deals each year for new customers,” said Craig Group Partner, Libby Covington. “But there is more competition entering the fray every year. You want to stand out in the field in terms of what makes your company different from others and what you can do for potential customers.”
By focusing on a digital marketing strategy, companies can improve their chances of success.
“You want to make a good first impression and show how your solution solves the potential customers’ problems,” said Covington. “And then you want to reinforce that good impression and value add over time.”
WHERE TO START WITH TOOLS AND TACTICS
The toolkit for digital marketing is varied but there are five basic components. Allocating resources to all of them will help a company or brand best position itself for success.
Website design
Think about this as your virtual lobby. Is it a place that invites people to stay and look around, or are they already backing out the door? A well-designed website with relevant content is essential for private equity backed companies looking to attract new business.
Social media
Social media is a great way to connect with a wider audience. LinkedIn, with its business focus, is a great place to start. Companies backed by private equity can use social media to share their story, interact with potential investors, and build relationships with clients. Case studies from your website would be a good share here.
Email marketing
People check their e-mail every day, and most people check it repeatedly. An email marketing newsletter is the next marketing step after developing a great company website. According to a Content Marketing Institute Report, 81 percent of B2B marketers say their most used form of content marketing is email newsletters.
Portfolio companies can use email marketing to share their latest news, or offer insights into the industry. The content should benefit the reader. What can you do for them?
Content marketing
Content marketing is another way for a firm to tell their story. Blog posts, videos and ebooks are just some of the value added content you can share with potential investors and clients. Your company will have unique insights into the target market industries. Use your expertise to appeal to potential customers.
Paid advertising
Paid advertising is a great way to reach a wider audience quickly and easily. Portfolio companies can use paid advertising to target potential new customers through online channels such as search engines and social media. And they get a lot of bang for their buck.
“If companies pay $50 for an ad that lands them a $500K client, that is a great ROI” Covington said in an Advertising Week article. “That’s what people love about it. “There’s that attribution.”
FIVE BENEFITS OF USING DIGITAL MARKETING
The benefits of using digital marketing for private equity firms include:
Increased visibility
Digital marketing helps portfolio companies reach a wider audience of potential customers. It is a crowded field. You need to work to be visible.
Greater engagement
Digital marketing helps portfolio companies connect with potential customers on a deeper level, fostering a better relationship with them. It is also a great way to understand how a certain company operates and how they might, or might not, be a fit with yours.
More leads
Digital marketing helps companies generate more leads, resulting in more potential deals. A company may only want a few new customers a year but they need the right pool to find the best fit.
Increased ROI
Digital marketing is an effective way to achieve a higher ROI than traditional methods such as traditional advertising or PR. Digital channels have lower all-in cost so generate a more efficient ROI than traditional options. A good ROI for a digital marketing campaign is 5 to 1, meaning every dollar spent brings a $5 profit, but many campaigns exceed this benchmark.
Greater flexibility
Digital marketing provides greater flexibility than traditional methods, giving companies the ability to tailor their campaigns – and move their dollars – to meet their specific needs.
HOW DO YOU MEASURE THE SUCCESS OF A DIGITAL MARKETING CAMPAIGN
“The biggest indicator of success is revenue generation,” said Craig. “However we also track a number of different factors to determine the success of a campaign.”
Traffic
The number of visitors to a company’s website or social media page can be used to measure the success of a digital marketing campaign. You can also find out specifics on who these visitors are and how they found you.
Engagement
The level of engagement your digital marketing campaign generates can be used to measure its progress. This could include the number of likes, shares, and comments posts receive. The amount of time a prospect engages with content is important too.
Leads
The number of leads generated by a digital marketing campaign is a concrete way to measure outcomes, along with the quality of that lead – which can also be measured.
ROI
The return on investment (ROI) generated by a digital marketing campaign is what marketers most often talk about, and with good reason. A good plan maximizes the value of your spend.
“Digital marketing is not a trend,” Craig said. “It is the future for all businesses, including companies backed by private equity. By using the right tools and tactics, these firms can cut through the competition and find the best partners in a crowded, increasingly expensive field. The investment in digital marketing is one of the smartest ones a company can make.”
To learn more about how digital marketing can help you meet your business goals, Craig Group is a trusted resource. We understand that marketing is about revenue generation and our digital-first approach combined with real-world expertise and dynamic partnerships can help you move and scale quickly.
MEDIA CONTACT:
Tricia Eaton tricia@craigmarketinggroup.com