15 Keys to Success for a CMO to Thrive Under Private Equity

What every Deal Maker asks in the back of their mind about the CMO:

“What is marketing doing to Accelerate Value Realization?

Their criteria for assessing the answer include:

  • Does this CMO have a plan?
  • Are they executing the plan?
  • What are the results?

What every CMO needs to ask him/her;

“What am I doing to contribute to revenue?”

The criteria that must be in place to answer this question:

  • What is marketing’s contribution to the funnel (acquiring new customers)?
  • How am I increasing customer retention?
  • What I am doing to cross-sell and up-sell exiting customers?

Screening, Due Diligence and Offer – Keys to Success:

  • Engage and be available. The PE firm has a fiduciary responsibility to look under the covers. Set aside emotion and play ball.
  • Provide factual responses. The PE firm will go deep and ask for things you don’t have to provide. These may be essentials that represent a gap in marketing’s past work. They don’t expect to find perfection. Simply answer, respond and fulfill with facts.
  • Park your ego. Avoid excuses and non-factual comments as these are noise. Keep in mind the PE firm will evaluate marketing against best in class organizations. Gaps will be found. They may even bring in an expert such as SBI. Our firm gets involved in many assessments.
  • Find peers who have thrived under PE. Leverage your personal and LinkedIn network to identify confidants. Invest time engaging these to learn from their mistakes and successes.

First 100 Days – Keys to Success:

  • Start Anew. Become emotionally disconnected from past marketing efforts. Understand the new goals of the company and align to those goals.
  • Leverage PE Firm Expertise. PE Firms have impressive capabilities and partners to leverage. A smoldering gap in most marketing organizations is accurately sizing market potential. PE firms excel in this area of market sizing. Also engage in their strategic planning resources.
  • Develop a Plan of Action. Developing strategies and tactics to drive revenue contribution. Vet the plan with the PE firm. Figure out how to complete the shift from being a cost to a source of revenue. Ask to collaborate with CMO peers from other portfolio companies.
  • Assess Structure and Staff. Proactively assess your current team’s ability to execute the plan. Analyze the structure and assess your team. Proactively perform this so the PE firm doesn’t have to ask. Don’t delay the inevitable and hurt marketing. The company has changed. Purge any ‘hardliners’ that fight the new direction.
  • Position Marketing as a Revenue Engine. The PE firm depending on their background may look at marketing as a cost of business. It’s really bad if the PE firm doesn’t engage the CMO in the first 100 days. CMOs may mistake ‘running under the radar’ as a benefit. It’s not. Non-engagement likely means the PE firm considers marketing a cost. Engage them to change this mindset. Demonstrate the key role of marketing in the buying process.
  • Contribute to the 5 Year Roadmap. Marketing should serve as an asset in building the strategy. Help author the plan and facilitate brainstorming/planning sessions to develop the roadmap. Consider bringing in a marketing consultant the PE firm recommends. Consulting resources can deliver best practices for a company on this unique course. Be a core strategic leader in orchestrating the overall plan.

100 Days Plus - Keys to Success

  • Stick to the Plan. Execute the plan with perfection by hitting milestones. Don’t change the plan without engaging key stakeholders.
  • Quantify Results to Overall Plan. Leverage ProForma marketing planning tools to quantify impact. Avoid showing activities as a result. Demonstrate how marketing is driving revenue (i.e. qualified leads, brand preference, product launch, etc.).
  • Tie early results to lagging indicators. Report on the leading indicators as proof points early in the process. Show the connection between the leading and desired lagging indicators. PE Firms don’t care about campaign metrics. They only care about metrics as it relates to driving revenue. Always present metrics in a business objective framework.
  • Be transparent. Things don’t always go as planned. Focus on learning from any missteps and recommending the course of action. Marketing leaders who cover up lose credibility.

Thrive under PE ownership.