Companies backed by private equity need to compress time. They can’t wait for a green marketing leader to meander, nor can they rely on marketing leaders who deal in abstractions and are afraid to lean into quantitative targets.
Private-equity-backed companies need marketing leaders who bring three capabilities and experiences to the table: 1) a track record of growing businesses like theirs while positioning them for acquisition; 2) the ability to map out an ambitious vision to differentiate the company, increase its value, and back up that vision with strategy and tactics; and 3) comfort linking marketing activities to revenue targets and exit prospects.
I have worked with dozens of companies on marketing strategy, giving me a view into the strengths of different types of marketing leaders and consultants. Here’s what financial investors should look for when seeking new marketing leadership.
A track record of marketing success
Most companies go wrong in one of two ways when seeking marketing leadership. They hire a relatively junior marketer such as a director when they need a chief marketing officer, or they hire an agency that claims it can handle strategy but doesn’t have anyone on the account team with C-level strategic-marketing experience.
The first error is common because, especially in the current economic environment, business leaders are budget-conscious. What does a C-level marketer really know that a director doesn’t? Won’t the latter be more eager to get their hands dirty and drive results? The problem is that director-level marketers often think tactically. Their instinct is to try out a new channel or pump out content. But what a business looking to increase its value significantly needs is a strategy that will differentiate it from competitors, support its strategic direction, resonate with customers, and deliver fresh sales opportunities. Tactics alone can’t meet these goals.
Most agencies are similarly strategically limited. But most agencies talk a big game on strategy, so how do you cut through the noise? Evaluate the members of the account team. Forget the owner if she is not involved in the account work. Does your account team include someone with a track record of devising business-level strategies? If not, pass. The agency won’t be able to set your strategic direction and be accountable for revenue goals.
Bypass these pitfalls by choosing a marketing leader, in-house or externally, who has a track record of growing companies like yours. If you’ve bought an ad-tech company, hire a marketing leader who has grown at least three ad-tech companies considerably and positioned them for acquisition (if that’s your goal). Ensure this leader can tell the story of what he did at each of those companies and how he’ll apply the same philosophy to your organization.
Vision, differentiation, strategy
A marketing leader who’s going to make a considerable impact on your revenue and valuation is not an order taker. She isn’t just there to support sales or talk channels. In fact, if she talks about channels in initial conversations, she is probably too tactical for the job. Rather, the marketing leader should engage the CEO and the rest of the leadership team on a business level.
Who do we want to be as a company? What’s magical about us? Who are our best customers? Does our customers’ perception of us align with where we want to go? Is the problem awareness, differentiation, the product itself, or the makeup of our customer base?
Let’s say you have a tech company that helps brands buy media. A tactical marketer will think, “How do we reach more of these brands? How do we get more leads? How efficient are our efforts across channels?” A strategic marketer will ultimately get to those questions, but he’ll start by asking questions like, “How fast is our sales cycle? Are we reaching the right kinds of brands? Are brands our ideal customer? What’s different about our ideal customer from our chief competitors’ ideal customers, and how can we orient our brand and our go-to-market efforts around the specific kind of customer we are best positioned to serve?”
These business-level insights inform vision — who we want to be, where we want to go — and, in turn, both narrative strategy (differentiation) and go-to-market strategy (channels). Only once a company has figured out what its business-level strategic goal is, be that reaching a new customer base, launching a new product, repositioning itself as the premium market option, or something else, does the strategic work of marketing become possible. And only then is it time to consider tactical questions like how the business will produce the content that connects it with customers.
Comfort with revenue targets and exit prospects
If a marketer is truly strategic and prepared to spearhead an organization with bold ambitions, she won’t shy away from talking numbers. She’ll understand benchmarks for her industry and will be able to provide data on how much the company should be spending on marketing, the revenue results it can expect from that spending, and its exit potential. She’ll have guided other companies toward exits and can explain how marketing can support exit ambitions.
Marketing qualified leads (MQLs) are falling out of favor — and for good reason. Strategic marketers don’t use only the most easily measurable tactics to hit an MQL quota on a SaaS dashboard and say, “I’ve done my job. If revenue is down, look at sales.” This is manager-level thinking, and it is how marketing organizations get stuck in tactical programs like SEO that are fine on their own but should not be the entirety of a company’s marketing program.
Instead of focusing exclusively on leads, marketing leaders should be able to speak to both the leading indicators that tell you whether marketing experiments are working as well as the sales opportunities that all marketing should ultimately drive. Each marketing leader has a different take on how exactly to measure success. Strategists should have their own philosophy and be able to explain how it functioned at other companies and why it will drive business-level success at your organization.
Marketing is perhaps the most misunderstood and maligned business discipline. But strategic marketers with track records of driving acquisitions and steep climbs in revenue generated at a minimum of three different organizations exist. These people are not unicorns, and what they do is not incomprehensible or unrepeatable. The best marketers can explain their craft and replicate it. Financial investors should focus on finding the marketing leaders who can do just that.
Joe Zappa is the CEO and founder of Sharp Pen Media. Contact him at email@example.com.