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Best Practices for Aligning Marketing Strategies with Private Equity Investment Goals

On-Demand Webinar: Decoding Private Equity: Crafting Impactful Reports & Metrics

April 23, 2024

By Courtney Fraas

No two marketing strategies are the same—that’s just Marketing 101 info we all know.

However, in the fast-paced, laser-focused, and revenue-maximizing world of private equity investment firms, marketing teams need to understand the distinct drivers and objectives that shape how these organizations operate. Without doing so, marketing teams can quickly find their work out of tune with the firm’s overall goals and initiatives. 

However, making this shift is often easier said than done. In the trenches, aligning traditional strategies with unique, high-pressure environments can pose considerable challenges to marketing teams that do not know how to adapt their perspectives and processes to align with those used by private equity firms. 

To help jump-start your marketing team’s success in supporting the unique needs of private equity investment firms, here are some actionable insights, practical approaches, and proven tips to adapt strategies to deliver results for your private equity investment firm’s stakeholders.

Understanding Private Equity Investment Goals

Although every business is unique, private equity firms have their own distinct drivers that shape how they make decisions, invest in opportunities, and develop go-to-market strategies.

Unlike traditional businesses, which often prioritize long-term growth and employ various metrics to gauge success, private equity firms adhere to a fairly stringent perspective, assessing every action's direct impact on revenue. 

A prime example of this distinction lies in how businesses interpret metrics. For example, a traditional business may celebrate an increase in web traffic month over month, but it may not know how to articulate how specifically this growth metric contributes to its revenue. 

In contrast, a private equity firm would scrutinize web traffic with an eye toward its direct impact on revenue generation. In other words, rather than simply celebrating an uptick in web traffic, a private equity firm would delve deeper to understand its sources and drivers—plus its correlation with lead generation, conversion rates, and, ultimately, revenue growth. 


PE Webinar: Crafting impactful metrics


Common Challenges in Aligning Traditional Marketing Strategies with Private Equity

Taking this idea a step further, marketing teams may encounter friction when trying to apply traditional marketing strategies to the particular demands and dynamics of the private equity investment firm’s operating environment. Some of the most common challenges include:

Strategic Alignment Among Teams

Despite the shared goal of driving growth, private equity operating teams and portfolio company management teams may struggle to synchronize their strategies, leading to misalignment in objectives and execution. 

Justification of Marketing Strategies

In the context of private equity, marketing strategies must be aligned with firm goals, particularly in terms of revenue generation and value creation. This requires a thorough understanding of investment goals and a clear articulation of how any marketing initiatives will contribute to achieving strategic objectives.

Establishing Accountability and Vision Alignment

Achieving alignment between private equity firms and portfolio companies involves establishing clear accountability structures and ensuring that visions are aligned across all levels of the organization. This continues to the marketing strategy, marketing team execution, reporting of results, and refinement of tactics.

Lack of Systems Alignment and Reporting

Private equity firms can struggle from a lack of alignment in systems and reporting mechanisms. This deficiency can undermine the ability to integrate data, impede comprehensive analysis, and hinder effective reporting across the organization.

Dynamic Environment and Rapid Decision-Making

Operating within a dynamic and fast-paced environment, private equity firms must be agile and responsive to market changes, investment opportunities, and competitive pressures. Marketing strategies and teams need to be able to adapt to this culture of rapid decision-making and execution and adjust their processes to account for these drivers.

Driving Value Through Marketing for Private Equity Investors

Though there’s no one-size-fits-all marketing approach to working with private equity firms, some proven best practices can be used to shape a marketing strategy and demonstrate revenue impact. These include:

Tying Marketing Efforts to Objectives

Marketing strategies should be directly linked to private equity firm goals, focusing on revenue impact and operational efficiencies.

Utilizing Data Analytics

For private equity firms, data analytics play a crucial role in informing and refining decision-making processes. Marketing teams should weave their data collection, analysis, and reporting into these mechanisms to support their own data-driven decisions.

Establishing Measurable KPIs

Identifying key performance indicators (KPIs) such as customer acquisition cost (CAC), customer lifetime value (CLV), return on investment (ROI), and marketing-generated revenue—and leveraging data sources to track these metrics—will be key to demonstrating marketing ROI. Similarly, creating robust reporting mechanisms that provide clear insights into the effectiveness of marketing efforts will enable marketers to make informed decisions and optimize strategies for maximum impact.

Adopting Agile Marketing Strategies

Agile team structures and processes facilitate adaptability, enabling marketers to respond swiftly to changing market dynamics; promote creativity, problem-solving, and experimentation; and empower teams to capitalize on emerging opportunities.

Leveraging Modern Tech Stacks

Leveraging a modern tech stack—which encompasses marketing automation software and analytics platforms—streamlines processes, minimizes inefficient manual steps, and maximizes efficiency. Combined, these investments help to optimize resources and lead to better allocation of marketing spend.

Promoting Transparency and Communication

Consistently communicating about the results and impact of marketing efforts will help ensure alignment between marketing initiatives and private equity firm objectives. This open dialogue helps establish a clear understanding of progress and enables adjustments to be made in line with the firm’s overarching goals.

Bringing It All Together

As with any business, marketing teams must constantly work to understand and anticipate the needs of the private equity investment stakeholders that they support. 

This begins with grasping a private equity firm’s overarching focus on revenue generation and aligning marketing strategies with firm goals, values, and expectations to drive value and ensure success. From there, marketing teams can use best practices such as tying marketing efforts to objectives, utilizing data analytics, establishing measurable KPIs, adopting agile strategies, and promoting transparency and communication to help private equity firms reach their goals and maintain sustainable growth.

It's through this alignment and collaboration that marketing then becomes a strategic asset to a private equity firm, helping to drive value and deliver tangible results for investors and stakeholders.

Want to learn more about how your marketing team can create impactful reports and metrics that resonate with your PE growth narrative? Check out SmartBug’s on-demand webinar, Decoding Private Equity: Crafting Impactful Reports & Metrics.


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Topics: Marketing Strategy, Revenue Operations