Relationships, Reputation and Revenue: The Crucial Role of Chief Marketing Officers in Private Equity Value Creation

Aug 28, 2024

Authored By Eric Walczykowski

I continue to hear from peers in the private equity backed software and SaaS businesses that one of the top reasons for a loss of sale is a disconnect between sales and marketing, and how the right CMO can turn that around.

At Bespoke, we are fortunate to leverage the enterprise strategic value that our Chief Marketing Officer, Adam Boone, contributes to our go-to-market and value creation strategy. However, I recognize that not every portfolio company shares this advantage.

I recently had the privilege of interviewing Alisha Lyndon, founder and CEO of Momentum ITSMA and author of The ABM Effect on the topic of Chief Marketing Officers in Private Equity companies. Our discussion ranged from alignment between marketing and sales, to marketing’s impact on value creation and how the right CMO keeps the team working towards the same North Star.

You can see the full vodcast episode here.

Plus don’t miss Part 2 of my interview with Alisha this week: Register to Watch

Below is a summarized Q&A of part 1 of my conversation with Alisha.

Eric: Talk to me a little bit about the Chief Marketing Officer role within private equity and why it is such an exciting time to be a CMO in private equity as it relates to value creation.

Alisha: We work with many CMOs across portfolio companies, and it is an exciting opportunity. There is a clear path to value creation over the next three to five years, with marketing playing a crucial role. CMOs in PE-backed businesses benefit from having the resources of larger organizations while staying close to the business, offering the focus of a small company. This unique setup allows CMOs to have a real impact, with a seat at the boardroom table and a strong executive presence.

Catch Part 2 of Eric’s interview with Alisha this week!

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Eric: My Chief Commercial Officer has a background as a Chief Marketing Officer, which I value for the strategic expertise and market understanding Boone brings. In private equity, go-to-market strategies are central to value creation plans, yet people often focus on the CRO (Chief Revenue Officer) or sales. I would like to hear more about the critical role of the CMO in these plans, especially in relation to account-based strategies, which you have written extensively about.

Alisha: The CMO plays a crucial role beyond just driving revenue. While the CRO focuses on revenue generation, the CMO is essential for understanding how clients and customers buy, their needs, and how the organization can build relationships and reputation to create a path to revenue. They shape positioning, messaging, and enablement, ensuring the organization effectively communicates value. CMOs are uniquely positioned to engage with SMEs (Small and Medium-sized Enterprises), executives, and customers, enhancing deal velocity, winning accounts, and retaining and growing customers. Their insight is key to refining the value proposition and staying aligned with market opportunities, making them vital to maximizing growth.

Eric: When I think about the classic Chief Marketing Officer and the private equity environment, it is driven by KPIs, KPIs, KPIs. How do we measure marketing success, and what are some of the common KPIs related to a Chief Marketing Officer for value creation?

Alisha: The traditional playbook has been heavily lead-focused, centered around the funnel—getting as much in at the top and converting what flows out. This approach often prioritized “grow at all costs.” However, a shift is occurring in value creation strategies, with more emphasis on anchoring the entire business to drive performance. The focus is now on building a sustainable growth model, which involves winning the right clients to ensure long-term growth without drastic fluctuations and maximizing customer retention to drive advocacy. We are advocating for a measurement model centered on the “three R’s.”

First, relationships: expanding and deepening connections within prioritized accounts.
Second, reputation: positioning the organization to fully support land-and-expand strategies and maximize opportunity size.
Third, revenue: adding pace to deals and ensuring that pipelines are not just filled but converting effectively.

In today’s complex buying environment, many deals may go nowhere, so it’s crucial to have a unified team with a shared revenue goal.

Eric: I love the idea of the three R’s, it’s easy for folks to conceptualize around relationships. Talk to me a little bit more about the reputational aspects of it and how we go about measuring reputation scores.

Alisha: Reputation is crucial in private equity-backed businesses, especially with frequent M&A activity. When acquiring new businesses, it’s important to drive organic growth by deepening relationships with existing customers through cross-selling, upselling, and expanding within accounts. To expand in accounts, you must earn the right to sell new offerings if you’re primarily known for another. This involves building thought leadership, strong positioning, and a clear value proposition. Reputation can be measured by how many accounts are buying new products or services and the extent of multi-threaded opportunities. While metrics like CSAT and NPS are useful, they’re more lagging indicators. The leading indicator is opening new opportunities and buying centers previously inaccessible. Marketing plays a key role in maintaining message and channel consistency. Trust is built gradually but can be quickly lost, so it’s essential to consistently build the right reputation and brand, ensuring customers stay with you and support organic growth and expansion.

Eric: That is very consistent with what we’re seeing when we’re building executive teams and scorecards. Could you talk a little bit more about the importance of alignment between marketing and sales, and how Chief Marketing Officers and others on the executive team can ensure that they’re aligned on that go-to-market strategy?

Alisha:

This is a crucial issue. The primary reason for lost sales is often a disconnect between sales and marketing, making their alignment a business imperative. Marketing’s role in ensuring message consistency throughout the pipeline is vital, as it can streamline deal cycles and reduce noise.

Marketing must also ensure that sales teams and broader go-to-market teams, including customer success, product teams, and sales engineers, carry the right message into customer interactions. Alignment between marketing and sales is essential, extending to shared goals and compensation plans. Marketing should be incentivized similarly to sales, with clear objectives for pipeline creation, deal acceleration, and conversion. This alignment requires having the right talent, structure, and compensation in place within the marketing organization, ensuring that both teams work toward the same goals.

Aligning Marketing and Sales for Optimized Deal Cycles

Alisha effectively emphasized how marketing can optimize deal cycles, identified the key marketing metrics to focus on, and underscored the importance of structuring marketing departments to align with sales goals. As these roles continue to evolve, structuring these teams to work together efficiently is more critical than ever, resulting in a stronger go-to-market strategy and improved outcomes.

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About Momentum ITSMA

Momentum ITSMA enables ambitious companies to achieve market-beating performance by winning, growing, and retaining the most valuable client relationships. Momentum’s consulting, research, and learning services help build go-to-market teams, optimize strategic accounts, and gain greater market share.

Connect with Momentum to learn more:

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About Bespoke Partners

Bespoke Partners is the largest recruiting firm solely focused on software and SaaS companies, and we specialize in firms backed by private equity sponsors. Bespoke Partners can help companies seize emerging opportunities by staying ahead in the software and SaaS leadership market.

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Author:
Eric Walczykowski
Chief Executive Officer

Eric is passionate about building high-performing teams that value doing their best, working together, overcoming adversity and learning.

As a proven growth executive, Eric has served as CEO, President, Board Member, Investor and Advisor for technology companies that achieved over $4.5B in successful exits.

Eric brings to Bespoke Partners significant professional services experience from Deloitte and Andersen, as well as the high-growth client executive perspective for private equity-backed technology companies.

Eric earned an MBA from the Kellogg School of Management at Northwestern University and a BS in Business from Fresno State University.

Outside of work, Eric enjoys spending time with family, coaching baseball, travel, attending live events and sipping good wine.

Featuring:
Alisha Lyndon
Chief Executive Officer,
Momentum ITSMA

Alisha is the Chief Executive at Momentum ITSMA, with over 20 years experience advising technology, professional services and financial services firms on revenue performance, go-to-market, strategic account growth.

Entrepreneur and growth evangelist, Alisha pioneered account-based marketing and went on to establish the first consulting firm to focus on driving revenue in strategic accounts.

She is host to America’s top 100 management podcast, Account-Based Marketing, author of The ABM Effect: How to Win, Retain and Growth Valuable Clients, is a regular contributor to Forbes and a speaker on growth topics.

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