At one time or another, every private equity firm we engage with reaches the same crossroads. They need to dial-up marketing to create value in their portfolio companies, but don’t know if it’s best to do it in-house or hire out to an agency.
Usually, they’re well aware of digital marketing’s role in value creation. Yet, they’re still faced with actually building a team that can help develop and implement the marketing strategy.
How to Structure Your In-House Marketing Teams
Let’s get the obvious out of the way: every in-house marketing team is a little bit different. So there’s no blanket approach or default list of roles that you can just plug in and repeat across your portfolio. On the other hand, there are a few repeatable steps you can take to put your in-house marketing teams in the best position to meet revenue goals in the short term.
Start by Assessing the Current Situation
I’m going to assume that you’ve taken the time to define your goals, market position, and competition. That’s step one. The next step is to lift up the curtain to see what you’re working with. In small or recently funded healthcare groups, often the only marketer on staff is someone who has filled dual roles like a practice administrator and marketing coordinator. Other times, the team might consist of one marketing specialist or marketing manager.
God bless them, but you’re going to need more than that.
You’re going to need to find a person whose skill set and experience aligns with what you want to achieve. You’re going to need someone with deep marketing experience who knows what works, what doesn’t, and how to get things up to speed quickly while meeting performance objectives.
There’s little time for on-the-fly coaching here. This person needs to give you a full inventory of the programs, strategies, tech, and campaigns that are currently at play. And if that person doesn’t exist, you have two options: cultivate an existing employee, or bring on headcount to fill this need.
Pinpoint the Strengths that Your Firm Can Provide
In our experience, private equity firms and advisory boards often make marketing recommendations directly. Or, they are part of the team responsible for building out the marketing function. I love what Toptal has to say about advisory boards:
“The truth is that advisory boards are usually not silver bullets. Still, they can be powerful tools and yield strong returns on investment (ROI). However, they must be properly utilized with an analysis of the cost against the rewards of achieving strategic objectives At its simplest, advisory boards are groups of subject matter experts. The role of an advisory board is to provide a company’s leadership team with guidance on company vision, innovation, risk management, and profitability.”
So, where does that leave us? If you’re going to entrust the marketing function to an advisory board, who should be on that board? And what skill sets would augment their strengths? I’ve seen advisory boards build very good marketing functions in portfolio companies. It does take the right people, though.
Jordan Brugg, writing for SpencerStuart, puts it well: “Adding value goes well beyond ‘buying right’ or just cleaning up the balance sheet. Firms today need more operating expertise, proprietary insight and ‘edge’ around industry dynamics and commercial strategies […] Sophisticated and bespoke portfolio company boards that leverage outside talent to bolster management teams and help drive operating agendas are increasingly the norm.”
Go Beyond Tactics to Build a Comprehensive Marketing Strategy
Before you dive headlong into paid media, SEO, etc., work with your advisory board and in-house team to assess the competitive landscape and devise new ways to achieve growth. It’s these strategic insights that will lead you to the tactics and strategies that unlock growth.
Take our Private Equity Digital Marketing Playbook for High-Growth Multi-Location Businesses, for example. As you’ll see, multi-location businesses can benefit quickly from multi-location marketing strategies. And that’s just one specialized marketing landscape of many.
When Ready, Supplement With These Specialized In-House Roles
At some point, most in-house teams will need coverage in the following baseline areas:
- Digital marketing generalists and strategists who can collaborate with outside contractors and agency partners
- Communications and brand experts for public relations (PR), external, internal, and voice of the company
- Specialists in content creation and data analytics
Bigger Firm? Get Even More Specialized
Assuming you have the budget and strategic need, you might find opportunities for growth outside of baseline in-house marketing roles. This might include:
- Media specialists
- Search engine optimization specialists
- Creative hires for visual (video, photo, graphic design) and copywriting/content
- Branding specialists
- Patient experience evangelists
- Customer experience professionals
What to Do When It’s Time to Hire an Agency
In some cases, it will make more sense for you to extend the in-house or advisory-board resources you have by bringing on a marketing agency. As Lauren Leone, our SVP Healthcare Marketing points out in How to Build The Perfect Healthcare Marketing Team, “you can’t and won’t be a specialist in all things. You need to supplement your skills and your capabilities with outside resources. Understand your marketing goals, who your audience is, where you’re trying to go as an organization, and then bring people in to help you.”
Here’s what to do when you find yourself in need of a digital marketing agency.
Get Access to the Expertise You Need
This is one of the primary advantages of hiring out to a digital marketing agency. Any agency worth its salt is continually exploring new channels, technologies, and industry changes. They have a team of both marketing specialists and industry or vertical specialists. The agencies we recommend have a big-picture approach and can quickly draw from other industries and client experiences.
Find Immediate Support
This is the kind of agency you’re looking for—people who can hit the ground running immediately. You’re looking for a team of experts who are already working together in lockstep. They have processes and systems in place to achieve results with rapid ramp-up times. And they know how to work with private equity firms, specifically.
Maximize Your Marketing Spend
This is a widespread area of need for private equity firms. Their in-house marketing teams and advisory boards might have most of the marketing strategy squared away, but they struggle to optimize their paid campaigns properly.
That’s because it’s a science. Good agencies know how to optimize conversion rates and make budgets go further. They know how to report against spending in more precise and in-depth ways, too. That’s exactly the subject of How to Build Data-Driven Marketing that Creates Portfolio Value.
“As an agency, our intention is to be an extension of your team. A great way to approach this conversation potentially with an agency is to lay out for them what you have in-house capabilities for and ask them to supplement with their capabilities. Every agency can bring you their list of capabilities, of which you may have some of them in-house. Present the agency with what you think your gaps are and allow them to come up with creative ways to fill them. I think that’s how our best collaborative engagements begin.”
—Lauren Leone, our SVP Healthcare Marketing
In the End, It’s About Situational Awareness
What’s needed to grow and create value quickly is going to depend on a lot of variables. Your board’s ability to quickly assess the landscape, market conditions, talent, and so on is what will make the difference. Your decision between building marketing in-house versus hiring out to an agency—and to what extent—might very well be an inflection point.
I’ll leave you with one last consideration that’s critical to understanding and maximizing ROI: marketing’s relationship to sales. The more closely the lead pipeline is integrated between these two teams—the better the data, attribution, and real-time reporting—the quicker you’ll uncover the right areas to invest in.