In short, PE firms purchase companies they see as having great growth potential so that they can improve them and ultimately sell them at a profit – in other words PE firms exist to create value.
Creating value means increasing the EBITDA which is done in may ways – but in short involves taking costs out, improving processes, streamlining and growing revenues. It is the area of growing revenues where marketing can have the greatest impact.
Growing revenue can happen as the result of four marketing strategies. Firstly, you can increase the frequency of purchase of your customers. The second is to find new customers to buy your brand. Thirdly, you can take market share from competitors and lastly you can increase prices. The trick is in identifying which ones are the best for your brand and when to do them.
Growing revenue and brand building are synonymous with each other. Great brands are the result of great marketing and great marketing starts with the discovery and optimising of a business’s unique marketable idea and staying focussed on this. This is achieved by identifying a brand’s compelling, differentiated (and sometimes unique) advantage and then staying focussed on letting your market know – in other words, creating a brand platform that informs and guides everything to do with your brand.
So let’s look at how each of these strategies and what is needed to execute effectively.
To successfully get your customers to purchase more frequently you need to really understand who they are, what they look for in your product and find ways to meet more of their needs more often, including what they don’t like about your product and finding ways to alleviate this. By discovering obstacles to purchase frequency, you improve customer engagement and purchase likelihood improves.
Finding new customers for your brand involves discovering all you can about your best customers and creating a deep profile of them and what it is about your product that your customers cherish – this will tell you what they look like and allow you to find more of them. Alternatively, assuming your brand platform resonates and your marketing comes to life in the right environment, they will find you.
The strategy of revenue growth through winning customers from competing brands requires a solid, durable and compelling differentiated advantage – the marketing holy grail so to speak. Potential customers must see the advantage in switching brands and a solid brand platform is the only way that this will occur. The same applies to the fourth strategy of increasing prices to generate revenue growth. This will only be successful if your brand stands head and shoulders above its competitors.
So there it is – easy eh?
ABOUT THE AUTHOR
Guy Bicknell
The agency’s senior suit and more. With over 25 years brand development experience in Australia, Singapore & Japan, Guy offers the marketing knowledge, strategic insight and creative acumen needed to ensure your product & communications solutions have a winning edge.
