The Value of a CRM in Brand-Building for Private Equity Firms

The Value of a CRM in Brand-Building for Private Equity Firms
Jason Doring

The private equity marketplace’s rapid evolution is only matched by the intensity of its competition. The industry boasts $112 billion in assets as of Q2 2015, the second-highest Q2 investment level since 2007, according to the Private Equity Growth Capital Council’s 2015 Q2 Private Equity Trends Report. Preqin’s H2 2015 Alternative Investments Outlook notes that 87% of polled private equity investors feel their investments have met or exceeded expectations. These stats indicate the increasingly lucrative nature of this asset class has fund managers racing to communicate a unique value to investors.

Back Bay Communications’ third edition of the Private Equity/Brand Equity research study, developed with cooperation from PitchBook, provided comprehensive documentation of private equity firms’ attitudes toward branding, the study revealed the heavy emphasis executives place on building their brand in this competitive vertical, and insight into their priorities for presenting their brand message.

Surveying 290 private equity professionals, the study established “near unanimity (98%) about the importance for private equity firms building a strong brand,” and that 92% of respondents also stating a strong brand helps private equity firms source deals and raise new funds. The majority of respondents (81%) also felt that a strong private equity branded attracted stronger talent, improving the internal culture and workflow for their office.

The statistics that were particularly intriguing were that the respondents’ preferred methods for building their brands is conference-speaking, personal meetings, a high-end website and news releases. The immediate conclusion I reached when reading that statement was that it only looked at one layer of building a brand. Brands are the product of intensive work by the marketing and communications staff, and that work can be expedited and made easier by an effective toolkit. A versatile and intuitive CRM program can be a valuable asset in crafting an attractive and relevant brand.

Improving Branded Deal Sourcing with a CRM

The Back Bay Communications study noted that efficient deal sourcing is achieved through continuous top-of-mind visibility, reaching out through multiple touch points such as meetings, calls, emails and conference participation. This multi-channel strategy is complemented by producing informed and specialized content. PitchBook founder and CEO John Gabbert commented that, “We have seen many PE firms focusing on specialization when it comes to branding, emphasizing specific sectors, operational expertise or a particular way they source and structure transactions.”

A CRM enables private equity managers to efficiently leverage their records on both prospects and potential investments, in order to communicate specialized expertise within all communications channels. Customizable categorization fields and rich relational capabilities inherent in a CRM offer instant access to critical data across all relevant contacts when preparing for a conference, entering a meeting or crafting a client-facing email.

A CRM’s data distribution capabilities also empower managers to demonstrate their expertise on demand. When a particular document or correspondence is required to demonstrate an immediate understanding of a prospective client’s needs, a CRM’s search functionality empowers the user to retrieve the information immediately. CRM platforms also offer the ability to instantly create visually compelling client-facing reports and enhance them with data compiled through external feeds, further building brand equity through competency.

Build Your Brand through a Streamlined Fundraising Process

Adveq’s Lee Gardella advises private equity firms that “you should be out there marketing the firm in between fundraising cycles. It makes fundraising less painful and can be the difference in shortening the fundraising cycle.”

A CRM serves as a useful reference for identifying the target audience for your marketing program, as well as a toolkit for developing your marketing communications and a central database for tracking the results of your efforts. The same category tagging and customizable field creation that assists with deal sourcing also allows managers to introduce investors to fund opportunities that match their interests and investment history. Search features in a CRM can also drill down geographically, identifying a full list of viable prospects that can be visited during business trips.

If a firm has selected a CRM with Microsoft Office® integration, users can leverage Outlook® to create compelling mailings for a defined contact list. Once sent, the CRM can track responses to evaluate the success of the messaging and provide additional quantitative data that can inform future strategy. A CRM also provides information on how frequently specific leads have been contacted, and a platform’s ability to add flags and task reminders prevents elements of the marketing and fundraising process from being missed.

Grow Equity with Increased Investor Portal Usability

The Back Bay study declares that all firms need “top-notch” websites, and Kristi Craig, the Georgetown University Investment Office’s Head of Private Markets, summarizes the makeup of a quality website. “The bad ones have too much information and are not well-organized or even a bit sloppy. The best ones clearly articulate the team’s strategy, structure and ‘edge’ in their market in a concise and visually appealing way.”

The best practices of usability and visual appeal also apply to the most interactive element of a firm’s online brand, the investor portal. CRM providers frequently offer investor portals as part of their service packages, and these portals can be customized to the firm’s branding, and can also be configured to align with investors’ transparency and security needs. A portal that provides immediate access and a sense of safety with investors’ sensitive data is crucial to building brand equity.

Branding is most effective when actual performance reinforces the communicated values. CRM platforms streamline typical workflow processes, empowering fund managers to devote additional energy to producing informed recommendations and insights into the private equity industry. When devoting resources to a multi-channel marketing plan, use a CRM to ensure your executions are optimized by easy access to centralized data and integrated communications platforms.