The High Value You Should Place on Personalized Messaging
June 5, 2019
There is an approach to deal origination that is a fundamental choice that many private equity firms (and other professional buyers) can understand, and implement.It’s this: Origination is marketing.
Every buyer faces the same challenge.
Sourcing deals is hard. And there’s no “secret” solution that one buyer holds over another.
But there is an approach to deal origination that is a fundamental choice that many private equity firms (and other professional buyers) can understand, and implement.
It’s this: Origination is marketing.
If you expect to generate deal flow in a crowded market, that is increasingly digital, thinking of how your firm is perceived and how you message to the outside world matters - a lot.
If origination is marketing, it’s worth reminding what makes good marketing succeed is being each of these things:
- On message.
Here’s a more in depth look at how to improve your marketing in the name of more deals.
What Drives Origination Campaigns?
In a market where there are more professional buyers than in any other time in recent history, many groups have adopted a more scaled approach to origination. The team at CAPTARGET has always advocated for this - after all, at some level looking for a company to acquire is an exercise in marketing..and marketing always has a numbers game element to it at some level.
But what happens when your mandate or industry of interest simply doesn't have the breadth of opportunity to scale?
We believe the biggest driver success for more modestly sized origination campaigns is to clearly differentiate your firm through all channels at all stages of the process.
That means these general taglines just don't cut it anymore:
“We buy in X industry with X EBITDA and have X years of experience.”
That means using an authentic voice on your website, any articles you publish, and in the emails you send.
Especially if you are targeting a specific industry - and let’s be honest, every acquisition search that’s worth anything is focused on a specific industry - authentic voice is imperative to getting a seat at the table.
This means speaking directly to your prospect with a mix of professional and personal language, while also staying true to any industry terminology or biases that may exist.
Niche industries require more provable expertise both at a firm and personal level or else prospective sellers will not be faulted for not taking you seriously.
Remember - Transactions Are Personal
Think back to the deals you’ve done. Transactions are often more personal than we plan. Be prepared to differentiate yourself from the rest of the buyer universe. One effective way to this is to invest in learning about your target's founder (or similar) in advance of communicating.
This can be as simple as using platforms like LinkedIn to research the founder’s professional history, organizational affiliations, and any articles they may have written or shared. The amount of time it takes to do this version of “due diligence” is minimal when you consider the significant increase it can give to the likelihood that you’ll strike the right cord on your message.
As funny as it sounds, we talk to owners all the time who just won't sell to a particular party because they didn't connect personally with the people on the buyer's team. People still "buy' from people they like.
What to Do If Your Industry Targets are Multiple
As we’ve said, having a brand for your firm that is focused on a specific industry is powerful. But many groups have mandates that cover a dozen industries.
This creates all kinds of marketing and positioning challenges and makes it difficult to be known as experts in any, let alone all, of these industries.
For example, do you currently include industries that you really don't focus on or transact in often in your marketing materials? You should consider removing these in favor of marketing materials and messaging that is specific only to the industry you are sourcing in at the time.
This means cutting back on non-relevant language or deals completed, and highlighting those that are only relevant to the prospective seller. It may feel like you’re stripping away some of your firm’s prior success and credibility by leaving these non-relevant acquisitions out of the picture, but consider the benefits of “hitting the nail on the head” with the target founder by showing focus and relevance that resonates.
Differentiate Yourself to the Target Founder
To drive the point home, again think about differentiation through a target founder's eyes.
Do you think they are more likely to respond to a solicitation from a generalist, or from the group that looks like a thought leader in the space?
If you’re following that messaging up with a quality website with value-added content that shows thought leadership, it goes a long way in increasing your chances of success.
In truth, it makes you a marketer. And in 2019, the buyers who think like marketers are going to originate deals that others will have missed out on.