A clearly defined playbook with value creation initiatives is critical for Private Equity firms
Revenue contribution to the Private Equity industry in Australia is forecast to decline 3.5% in 2020-21 due to Covid-19 disruptions, however, it is expected to grow 2.6% over the years through to 2025-26 to $725.3M. Private Equity firms need to consider the following four actions to ensure they can add value.
Revenue contribution to the Private Equity industry in Australia is forecast to decline 3.5% in 2020-21 due to Covid-19 disruptions, however, it is expected to grow 2.6% over the years through to 2025-26 to $725.3M.
Private Equity firms need to consider the following four actions to ensure they can add value to individual companies, outperform the market, and become an organisation that can confidently generate attractive returns:
Articulate a new, clear value proposition either through specialisation or economies of scale.
Achieve excellence in talent, governance, and organization.
Refine how to successfully originate and execute on deals.
Prepare for successful exits at least 18 months prior to a planned exit; allowing time for asset owners to shape a compelling equity story.
The pressure for Private Equity firms to achieve profitable returns is critical, even more so in today’s economic environment. In order to be certain they can achieve consistent returns in the fund they must focus on purchasing the investment at the right price and focusing on accelerating value creation initiatives to ensure that they can sell at a significant increase in multiple.
Private Equity firms must have a clearly defined playbook which contains value creation initiatives to support the investment thesis. This provides an advantage in knowing what to pay and the level of risk. The playbook should be refreshed and prioritised for each investment.
An asset’s full potential is realised through a holistic approach that optimising operational performance, enhancing strategic capabilities and effective capital management. The efficient use of capital is also a critical component of valuing an asset’s full potential. Capital deployment is an important foundation to support strategic and operational initiatives.
Strategic Levers
Drive Multiple
Transforms the Business Model
Mergers and acquisition
Geographic expansion
Customer segmentation
Strategic pricing
Product strategy and innovation
Aftermarket/service strategy
Distribution strategy
Digital transformation
Data strategy
Operational Levers
Drivers EBITDA Margin
Transforms Execution of the Business Model
Pricing optimisation
Sales force effectiveness
Product portfolio optimisation
Operational efficiencies through optimisation – manufacturing, distribution
Cost to serve
The business world is changing with the rapid evolution in technology, and in order for Private Equity firms to maximise the returns on their investment funds, a value creation focus in digital transformation is important.
The goal of digital transformation is disrupting existing business models, improving customer experience, and creating operational efficiency.
Strategic acquirers are more likely to pay higher multiples for successfully digitised companies, given that they are easier and faster to analyse and integrate.
Looking to create your own playbook? Let us help.
Whiteark is highly experienced in providing services to Private Equity firms and has had great success at driving an improvement in returns through involvement in portfolio transition and transformation projects. We understand that execution is the hardest part, and we roll our sleeves up and work with you to ensure we can deliver the required outcomes for the business. Contact us on whiteark@whiteark.com.au
Transforming your B2B Sales Team
B2B buying behaviour has become even more unpredictable with COVID-19 and as a result driving customer retention challenges for many organisations who have traditionally leveraged the sales function to manage high value accounts.
B2B buying behaviour has become even more unpredictable with Covid-19 and as a result driving customer retention challenges for many organisations who have traditionally leveraged the sales function to manage high value accounts. A multinational client shared with us that their frontline sales teams were now working remotely as their ability to generate face to face meetings with their clients had become near impossible.
Whilst this trend has been disrupting field sales for many years it has almost definitely been brought to a head and compounded by the pandemic this past year.
Our data and research suggests’ that today’s buyer wants to engage with suppliers through digital channels at least initially. To meet this omnichannel experience for the buyer sales functions will need to leverage new skills and learn to execute the new technologies at their disposal.
The future of sales has been permanently transformed and as a consequence companies that want to be relevant in a sales economy tomorrow need to ensure that their sales processes are bookended and supported by a ‘digital’ engagement will all customers.
Research* suggests that B2B customers are leveraging digital channels for information and guidance prior to engaging sales representatives. In many cases respondents suggested post acquiring the knowledge they needed to make their buying decision they opted away from any engagement at all with the sales rep.
Furthermore, as buyers move more towards digital platforms to help them navigate their decision making process, they are rewarding those companies that have invested in seamless omni channel experiences, hence from a selling perspective ensuring technology is underpinning the sales process has become more critical than ever in terms of revenue protection.
Despite the enormous rhetoric around data and its importance over the last decade research* also suggests that most sales led companies fail to leverage data and AI capabilities to capture customer and buyer behaviour hence enhancing the risk at a relationship level between the sales representative and the customer.
“Sales companies that plan to succeed moving forward must move their cultures towards being the leaders of the selling process as opposed to being the leaders of sellers. ”
That requires a shift in the strategy and focus away from sales professionals as the primary and predominant channel to market and a move towards digital sales channels that are supported by personal human engagement at the appropriate moment for the buyer. In this new world sellers’ decision making will be driven by data, analytics and AI, not on intuition and experience.
A key shift for organisations seeking to transform their sales functions will be their ability to pivot to a model whereby they can be ready to engage a customer in whatever channel they are seeking to be served whilst in parallel having an ability to execute effective selling.
Sales leaders have an opportunity as we move into this next chapter of selling to help navigate their organisations by creating a roadmap that is focused on aligning to their capabilities around customer buying behaviour.
Simple considerations for transformational roadmaps might include:
Position your salesforces as the facilitators of education in the buying cycle
In a world where it’s never been harder for the sales teams to engage and influence buying decisions sales needs to be focused on helping customers feel more confident in their assessment of data and ultimately their buying decisions.
Focus on increasing the digital capability of your sales team
By focusing on up-skilling your sales teams and increasing their digital competence, you will be able to enable your sales team to sell more effectively across various digital channels and in turn be able to be more visible and present to the customer and their buying pattern.
Reconsider your GTM channels so as they embrace more digital engagement points
Moving towards a customer centric channel approach will force your organisation to stop being so focused on your own products and will allow you to leverage your customer lifecycle or value stream to determine the right time to engage a customer based on their need or problem relative to the buying cycle. This shift towards the buyer is fundamental and requires you to focus operational efforts on ensuring all commercial channels are integrated around the customer needs not yours. Taking note and acknowledging customer engagement preferences for digital, sales and self-service channels will allow you to reprogram your efforts around the customer.
Leverage your technology assets to drive customer engagement
Ensure you are using whatever levels of technology to support as much automation of the customer journey as possible. For example, using AI to execute basic sales tasks such as preparation and insights, to detect buying signals and predict business outcomes will be useful for both your sales teams and your customers will be one.
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Never in our lifetime has the importance of revenue generation and profitability been greater yet failing to accept that technology and readily available data has driven the power to the astute buyer in the old sales process.
The new era of selling means that there can be no separation between your sales teams, technology, marketing communications, data and analytics and all of the operational functions that sit in between.
It’s time to transform to the new approach to selling where every move is driven by how well you leverage AI to command the entire sales process and all of those who serve it.
With change comes opportunity and be clear the possibilities are enormous; but will only benefit those sales leaders who are bold and progressive enough take action now and transform their sales functions.
Moving towards agile workflows and channels that can engage their customers wherever they want, whenever they want will only drive a great connection to the new millennial buyer and in turn a great share of wallet for your company.
Looking to capitalise on these trends and plan your own sales strategy? Let us help.
Whiteark is not your average consulting firm, we have first-hand experience in delivering transformation programs for private equity and other organisations with a focus on people just as much as financial outcomes. We understand that execution is the hardest part, and so we roll our sleeves up and work with you to ensure we can deliver the required outcomes for the business. Our co-founders have a combined experience of over 50 years’ working as Executives in organisations delivering outcomes for shareholders. Reach out for a no obligation conversation on how we can help you. Contact us on whiteark@whiteark.com.au
*Source: Gartner B2B Buying survey 2018
Taking Care of Sales
The hot topic for 2020 has been Covid and in particular what businesses should be doing to transform to this well-articulated new normal. At Whiteark we’ve been thinking specifically about the impact this unique year has had on B2B selling and specifically what your organisation may want to be considering.
The hot topic for 2020 has been COVID and in particular what businesses should be doing to transform to this well-articulated new normal. At Whiteark we’ve been thinking specifically about the impact this unique year has had on B2B selling and specifically what your organisation may want to be considering ensuring your sales team is set up to be successful over this coming year.
“Employees come first. If you take care of your employees, they will take care of their clients.”
In a year where the conventional approach to B2B selling has been rewritten and now the new normal seems to be emails followed by zoom meetings and if you’re lucky another zoom meeting, how can we help our sales teams better serve their clients?
The B2B sales process has never needed to be more agile than it needs to be today. We are experiencing the constant introduction of new products and services in market as a result of digital software and technology that are challenging even the very best of value propositions in the marketplace.
We are hearing first-hand that even the very best sales organisations are upgrading their sales processes so as they can stay ahead of their competitors. As we move into the Christmas break many companies are planning their 2021 kick off activities with a view to energising their sales teams to meet the demands of the next cycle.
In a market where control is clearly geared towards the buyer, sales must respond to this power shift by ensuring they are able to meet the increased demands of this new process. High levels of personalisation are no longer appropriate for a select few customers who meet a given criteria, it will become a baseline expectation that every customer has some degree of account-based personalisation to meet their specific needs and problems.
Covid has driven the emergence of working from home and many buyers and decision makers will demand access to information that they will expect to be able to review and assess in their own time without a meeting face to face. They’ll use emails and video meetings to manage the selling process and only the greatest equipped salespeople will be able to match this game change.
Buyers will also be leveraging more than ever their peer groups for recommendations, referrals, and reviews of the sales proposals without any engagement or influence from the salesperson. The days where we could get by on ‘the buyer - seller’ relationship will now be tested, and we will need to help redefine the traditional sales tool kit to ensure our sales process maintains its integrity. Customers will now have access to information and will know a lot more about your company and its product, as well as your people than you might expect. They will be looking for partners that are authentic and genuine as a mere starting point before they hand over their trust.
Whilst the process might have shifted as a result of this unusual year the reality is that the sales process has always been underpinned by trust and the real focus for 2021 needs to be fuelled by continuous training and development.
In our opinion, it’s never been more important that the sales team has to be ready to change their game to win the trust and credibility of the new buyer. The bar for sales competence must be once again raised and those organisations that are able to measure and track sales skills, characteristics and abilities via specific dashboards and metrics will be able to use this data to ensure the needs of the customer are met.
Sales teams who have very clearly defined metrics will be most likely to succeed. Hence, sales management will be reliant on sales operations and support functions like never before as well as working with and ensuring their utilisation of technology is driving their sales process. Customers will want to be engaged on their terms and as such every channel will be equally critical to the success of the next sales campaign.
Whilst the sales - client relationships will still be critical, technology and use of emails, EDM, social will become critical tools in the sales communication cycle. Social selling is on the upward trend for sure, with businesses and employees following and commenting on LinkedIn about their companies and their brands. Therefore, engagement in these channels will be critical to sales outcomes and the content that your sales team is generating on this channel will need to be in alignment marketing as well as whatever was leveraged in email, SMS and whatever other channels you are engaging.
In any case as we embark on the new normal for our sales team, it is imperative to accept that everything matters. Remembering that there’s no such thing as ‘this is how we’ve always done it’ approach that will work in every situation all the time so working with the teams in an account-based methodology where ‘every’ customer matters will be critical to your 2021 sales strategy.
This coming year, the organisations that will win will be those who case best align their sales talent to their technology, broader support teams and work together as one to solve the problems of their potential buyers.
Driven by customer insight, behaviour and technology, the trend is moving towards account-based selling and digital transformation.
There’s never been a better time to take stock, conduct an honest self-assessment and to identify the elements that will lift your sales team to meet the needs of tomorrow.
Looking to capitalise on these trends and plan your own sales strategy? Let us help.
Whiteark is not your average consulting firm, we have first-hand experience in delivering transformation programs for private equity and other organisations with a focus on people just as much as financial outcomes. We understand that execution is the hardest part, and so we roll our sleeves up and work with you to ensure we can deliver the required outcomes for the business. Our co-founders have a combined experience of over 50 years’ working as Executives in organisations delivering outcomes for shareholders. Reach out for a no obligation conversation on how we can help you. Contact us on whiteark@whiteark.com.au