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THINKING

Strengthening private equity portfolio company performance

Private equity firms have a significant opportunity to further enhance portfolio firms’ performance and value by leveraging well tested brand-building tools and incorporating brand-centered optimization. In the private equity space, brand is commonly seen in its narrowest definition – as a company’s name and logo. 

Brand is a critical corporate asset. It is inextricably linked to the business strategy, defines the organization’s promise to its customers and forms the guideline for structuring the organization’s operations in a way that supports the promise and creates a desirable, unique customer experience.

Mismanaged brands and portfolios can negatively impact earnings and profitability by tying up management resources and by driving away customers when there is a disconnect between the advertised promise and the actual experience.

There are several scenarios when private equity firms stand to benefit from working with experts to incorporate brand-centered optimization.

OPPORTUNITIES FOR OPTIMIZATION 

1

Strategic overhaul of underperforming company

 
 

An overhaul of the business strategy is typically mandated by changing market dynamics that require altering the business mix, revamping the business’ value proposition, vacating markets or entering new ones. These changes carry a risk of being misunderstood by and alienating to customers, unless the company communicates them through a compelling brand story, supported with appropriate actions across all stakeholder touchpoints.

2

New product or service development and launch

 

Launching a new product or service can introduce a broad set of branding challenges. While it may be tempting to focus solely on finding an appealing name and designing a logo, to accomplish the best results, organizations need to go further. The organization must define a compelling brand story that creates customer engagement and pull and identify a brand experience that will support this story across all touchpoints along the product purchase funnel – from relevant and appealing communications content across the right mix of channels, to training of sales personnel, to optimizing after-sale service and the customer feedback process.

3

Merger or acquisition by a portfolio company

 

Portfolio firms frequently receive private equity assistance with the goal of making acquisitions and benefitting from a greater market footprint and accomplished synergies. Mergers and acquisitions often create brand challenges, beginning with what to call the company after the transaction and going down into detail about what to do about overlapping and competing product brands. We can help companies determine which brands have equity and contribute to the bottom line and where there may be opportunities to streamline the portfolio over a period of time that minimizes risk. In many cases, a review of brand architecture and product/service naming principles is helpful in stemming brand proliferation and achieving significant trademark cost savings. Research also shows three other areas requiring critical attention during integration: retaining key talent, communicating internally, and integrating cultures. 

We help organizations identify a shared employee value proposition and brand culture and then do the important work of helping the people on the ground with a carefully structured launch communications plan, internal training and consensus building, and molding short- and long-term messaging to avoid talent drain and to tell the new merged brand story in a way that generates tangible value for the business.f

 
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