An idea has been brewing in my mind for a while. And the more I thought about it, the more I realized it may be a concept whose time has come. 

If you run a private equity (PE) group, optimizing the performance of your portfolio companies is job one. There are different levers you can pull to scale the business, maximize EBITDA, and position the company to sell at a high multiple. One of those levers is marketing. 

Good marketing makes money—sometimes generating revenue that’s hundreds of times your marketing investment. But if you duplicate marketing functions across many PE portfolio companies, you’re cutting into your ROI. 

That got me thinking: What if a PE group could share marketing services across its portfolio companies, to reduce marketing costs and generate better results? 

Why shared marketing services might be the answer  

My firm has served as the private equity marketing agency for PE-backed companies in multiple industries, so we know the importance of scaling fast, with no room for error (as the CEO of SaaS company Verb discusses on our blog). We’re also seeing some PE groups become more active in facilitating better marketing for their portfolio companies. One PE group I follow has a team dedicated to sharing insights and best practices across its companies, in areas like marketing, through online forums, case studies, and peer discussions.  

Interestingly, that same PE group has a lot of open marketing jobs across its portfolio companies—many in duplicate areas. I’m willing to bet very few of them are large enough to justify an FTE in every discipline it takes to engage in modern marketing. Yet, each is trying to hire a whole marketing team. 

That’s when the wheels started turning. 

Just like corporations with multiple business lines use a shared services model for common functions like accounting and HR, maybe PE groups should offer shared marketing services for their portfolio companies. 

How it could work 

Let’s say you have 50 portfolio companies, each attempting to staff the marketing function.  

By the time you factor in a senior-level marketing strategist to set the direction and plan (to avoid wasteful, random acts of marketing), plus a marketing director to lead the plan’s execution (to get it done right, on time, and on budget), and specialists in areas like content development, digital marketing, marketing technology, and many more, you’re talking about a big FTE investment. It’s cost-prohibitive for most middle market companies. And the odds of every portfolio company needing every marketing discipline on a full-time basis is low. 

Now let’s say you move to a shared services model instead. Each portfolio company might still staff its own marketing strategist and director, as these functions work best when they’re very close to the business. But now, you take the other marketing disciplines commonly needed by all those portfolio companies and consolidate them into a shared services model. Each company taps these marketing resources as they need them, without duplicating functions.  

Not only do you reduce waste; you likely gain access to better marketing talent that’s able to drive better results. With talent at a premium in this tight labor market, a shared services approach makes it easier to get the skills and expertise of A-level marketing professionals that know how to generate high ROI. This top-tier team can not only apply best practices; they can share them across companies, building a stronger marketing foundation across the PE group.  

What a shared marketing services model could do for you 

A shared marketing services model could help you scale your portfolio companies faster and more profitably, avoid the cost of duplicate functions, and stay more agile. It could also avoid the unfortunate-yet-inevitable cycle of portfolio companies staffing up to scale up, only to let folks go when the business is sold five years later.  

And if you’re looking to differentiate your PE group so you’re more appealing to the most desirable target companies, a shared marketing services model may be just the ticket. 

Besides reducing your marketing staff overhead, this model could reduce the costs of the marketing technologies that growth marketing requires. Imagine if half of your 50 portfolio companies are using HubSpot for marketing automation. That means you have 25 different agreements with HubSpot—with no negotiating power—and multiple people handling platform administration. That waste goes away with a shared services model.  

When a shared marketing service keeps your team lean and focused and their budgets optimized, you won’t just see a big impact on the bottom line. You’ll also see a big impact on the top line, growing revenue faster than you could if each company is scrambling to staff marketing just right.   

So, how would you get started? 

As intriguing as the idea might sound, you might not be ready to go full guns yet. As with most innovative ideas, testing the water is a smart move. 

A good way to dip in your toe is to leverage a fractional team of marketers for your shared services group. Fractional marketing enables you to get the exact skillsets and level of resources you need—no more, no less. Instead of tying up budget dollars hiring a big in-house team, this approach applies the right resources at the right time, place, and channel. 

Maybe you start by surveying your portfolio companies to see which marketing disciplines they have on staff vs which they most need. The more commonalities you find—and the more gaps you see—the more value you could glean from a shared services model, especially on a fractional basis.   

For example, if lots of portfolio companies need help developing annual marketing plans and budgets, you could tap a Fractional CMO for your shared services team. Or if many of your companies are struggling to use analytics to monitor and measure key performance indicators (KPIs), you might need a marketing analytics specialist on a fractional basis.  

Let’s try it together! 

If you’re as intrigued by this idea as I am, let’s take the next step. I’d love to work with a progressive PE group that’s interested in testing out a fractional shared marketing services model. Try it for six months and see how it goes. After all, marketing is measurable, so you’ll have the data to know how well it’s working and to decide whether to keep going.  

It’s a very low-risk proposition with the potential for very big returns. And that should be music to any PE group’s ears.  

Are you interested to see what a private equity marketing agency and a shared services model could do for your portfolio companies? Contact me to schedule an exploratory call!