Marketing for Private Equity Firms in Low-Tech Industries: What’s the Draw?

I’ve worked for a private equity firm that was consolidating the rope and sock industries. I’ve also worked with the marketing value creation team of a private equity-backed holding company that specialized in engineering products and services for the weather. Quite a far cry from Silicon Valley!

But while some may think high tech holds more allure, I say low tech offers more opportunity (at least from my narrow, but important, marketing lens).

Here’s a prime example. My most recent private equity project involved assessing the marketing and sales functions at the portfolio company level. During the project, this is what I observed:

• There was a gaping hole where marketing should exist.
• Sales enablement and proposal writing were disguised as marketing.
• Cross-selling across the portfolio was “of interest,” but not a top priority.
• Branding and messaging were outdated.
• No formal strategic or marketing planning processes existed.
• Company websites were not up to modern marketing standards, and they generally made an “okay” impression at best—or worse, a poor impression.

My big-picture findings may seem a bit gloomy. But here’s the good news: These low-tech companies have a long history and they’re profitable. They’re successful despite the limitations I observed, which is exactly why I see nothing but opportunity. Imagine the kind of results they could achieve with just a minimal amount of strategic marketing, solid execution, and baseline reporting!

A Roadmap for Results

While many private equity firms focus on the bottom line and shaving costs, some are starting to explore short-term and long-term top-line growth opportunities. For firms that are ready to embrace the latter, the following phased approach offers a good roadmap.

Phase I: Upfront Marketing Assessment (30 days)

During this phase, we give our private equity clients a “State of the Union” by asking targeted questions, such as:

• Is there a strategy? We look for vital elements like positioning, segmentation, target marketing, ideal customers, and primary personas.
• Are there analytics? Can we identify trends by top customers, sales and profitability by segment, customer churn, lifetime customer value, average sale by customer, and other metrics?
• What marketing technologies is the firm using? For instance, is the website helping or hurting? Is there a customer relationship management (CRM) system with clean, segmented data? Is the firm using any marketing technologies to scale?
• Who handles marketing? Who handles sales? We review the client’s in-house or outsourced talent and assess their effectiveness.

Phase II: Baseline Marketing and Sales Foundation (90 days)

Based on our findings in Phase I, we work towards establishing a solid—but not over-the-top—marketing and sales foundation. And here’s the key: We focus on functionality. In the low-tech world, a functional foundation can look high tech because the bar is typically on the lower side. During this phase, our private equity marketing specialists focus on:

• Writing a clear value proposition at the company level and across the portfolio
• Updating the brand, sales collateral. and proposal templates
• Revamping the website and installing tracking code for measurement purposes
• Implementing marketing automation and CRM software

Phase III: Marketing Plan (runs parallel to Phase II)

What’s exciting about low-tech, private equity-backed companies is the potential to drive a tangible impact, relatively fast. To me, that makes them among the most alluring clients to work for!