We are a creative integrated marketing consultancy specialising in 4 business areas: Business Services, Financial Services, Automotive Aftermarket and Recruitment Advertising. These blogs tell of some of our experiences working in these business areas.
14 August 2013
Whether you are a private equity-backed management team running a portfolio company or an owner looking to sell and maximise the value of your business, you will be focussed on pursuing and realising an upside. For an integrated creative marketing agency such as ours, that means leaving you to focus on sales and EBIT improvement while in tandem focusing on the more strategic issues including: market awareness and brand recall, communication of the direction management are taking the business, customer acquisition, customer retention and strategically important relationships (supply chain or customer, for example). Why? Because these are all influential in pushing up exit value and contributing to “good will”.
What can you do and what should you focus on?
1. Be a prepared seller
Most sellers say the top two criteria they value from buyers is (a) highest price and (b) speed and likelihood of the deal to close. Yet little is done to “dress” or strategically promote assets which helps attract strategic buyers and can underline the financial and non-financial “fit” and attractiveness of the asset in the first place.
2. Don’t neglect your brand. Increase your investment in it
Brands and IP are tangible assets just like an inventory of stock. But unlike an inventory, brand value can be massaged pre-exit.
At least 18 months pre-exit, focus on investing in the brand to turbo-charge web visits, customers walking through the door etc. Remember, forward momentum is a positive and nearly every acquirer will have a cost-cutting programme they factor into their business plan. A business investing in brand(s) is more valuable than one that isn’t managing and investing.
3. Manage the communication of strategic partnerships
Chances are your business has or maintains strategically important relationships, partnerships or associations that add value and have been forged over time. These don’t need to be formal JVs but could be endorsements, awards, reputational milestones; they are valuable. Don’t bury strategic partnerships. Instead, find a way of communicating their existence and the value, financial or otherwise, they attribute to your business. This kind of communication often adds “stickiness”.
4. Focus on customer retention, goodwill and referrals
Financial results are driven as much by lost relationships and question marks over forward momentum as they are by sales growth. How you employ social media, communicate internally and interact with customers and prospects can add enormous value. Customers require more than sales messages “broadcasted” to them. They seek opinions and experience to help them solve problems or make better informed decisions. Think about how your social media strategy helps them do this and adds value to your business, together with how this can be communicated and underlined to buyers when the time comes.
Chris Abraham heads www.AEPadvertising.com – an integrated creative marketing agency that helps b2b and b2c organisations build brands, develop relationships, enhance customer value and get results. AEP is one of the most experienced marketing advisors to private equity firms in Europe.