Companies in your portfolio that effectively manage and leverage the power of their brand can outperform the competition in their category.
An analysis by the Marketing Accountability Standards Board1 shows that brand contributes on average 19.5% and in many cases well over 50% of total enterprise value when the impact of brand on cash flow and profits are accurately measured.
More private equity firms would do well to focus on branding efforts and go-to-market support as a key component to grow their holdings.
Brand is an elusive asset — an intangible. Yet brand is the very thing that drives customer intent, trust and loyalty in the marketplace. These are the elements that help grow businesses exponentially and drive financial value.
You smartly look for companies with excellent growth and profit potential. You perform extensive market and target research to help you find those diamonds in the rough. You acquire businesses with strong market potential but which could significantly benefit from strategic guidance and support — be it financial, operational and yes, brand and go-to-market strategy — in order to grow the business and build more value. How?
Lead with strategy.
Often overlooked, effective brand and go-to-market strategies are paramount to help your new holding thrive.
Brand strategy improves marketplace recognition and perception and helps the business itself to become more valuable. The branding process also improves customer experience, internal operations and sales funnel management. Simply put — effective brand management packs a powerful punch and is key to the foundation for business growth — both top and bottom lines.
“Why would you not invest in brand? It multiplies your return tenfold.”- Chris Burch, Burch Creative Capital
Go-to-market strategy is the creation of smart and balanced approaches for organic and paid marketing channels. But a go-to-market strategy is far more than a marketing and content plan. An effective go-to-market strategy will identify product and service opportunities, surface current marketplace trends to exploit or mitigate, refine traditional audiences and discover new ones, analyze the competition to pinpoint highly ownable spaces, identify potential risk factors and include key mitigation tactics that could affect the approach.
An integrated approach to aid your portfolio companies will help them implement brand and go-to-market strategies quickly. By working together in a nimble and proactive manner, your portfolio companies will be set up to leverage their unique value proposition, identify the most valuable brand aspects, increase their perceived value and ultimately provide you higher valuations and better returns.
Are you maximizing growth for your holdings? Lovely People can help your portfolio companies grow. Let’s talk.
1. Meier, Jim, Frank Findley, and David W. Stewart, PhD. "Applying the MASB Brand Investment & Valuation Model." The Marketing Accountability Standards Board, 2023, PDF file