PE Firms Invest because they know that additional capital will drive EBITA and revenue or they would not do it. So how does Customer Experience play into that investment strategy? It is a priority that can not be ignored if you are on a 24-36 month exit horizon.

First, what is Customer Experience and why should you care? Private Equity firms care about Customer Experience (Cx),  because it is key to driving revenue growth, reducing the expense to bookings ratio, while providing customers with a great interaction across the customer journey. This will drive valuation.


Cx is all about seeing how each role plays into a customer’s overall satisfaction with the product or service, and the organization. The ultimate goal is a solution that seamlessly integrates into the customer with ease, and with extra features that will help your organization provide more value.  If you are in a PE firm as an Operating Partner, you should get close the to the Cx Strategy of your Portfolio Company (PortCo), this is the best place to drive EBITA and incremental revenue, EBITDA expansion and know what the customer journey looks like. The graphic below shows why this is critical.



The 3 main reasons PE firms care about Customer Experience:


  1. Great Cx drives 5 times faster growth
  2. Customers that have a great experience are willing to pay 2x higher prices and Cross Sell and Upsell 2x faster
  3. Great Cx drives customer references which are the key to success in existing and new customers


So lets unpack this further.


  1. Great Customer Experience Drives 5 Times Faster Growth


    We know that when a PE firm buys an asset the window of opportunity to drive growth is 2-4 years.  The  last thing you like to hear is that the PortCo is doing a great job with new logo acquisition, but not growing because customer retention is down.  Knowing that the entire customer journey is mapped is critical and needs to be managed from the top.  A recent article shows that CEOs that engage in the Cx journey can accelerate the impact.  Understanding how your CEOs of your PortCo’s are doing this is critical to driving the strategy (CX Exploratory Questions Tool).


  1. Customers That Have a Great Customer Experience Are Willing to Pay 2x Higher Prices and Cross Sell and Upsell 2x Faster 


    A great experience drives great Customer Satisfaction.  The key to a successful customer relationship is the transition from buyer to customer.  If this transition is managed properly and the buyers journey is mapped properly not only will you have a satisfied customer, but you will be aligned on how to drive the right cross sell upsell motions.


    The Cx motion is an organizational design not a sales item. Making sure your PortCo has a great customer journey map that is understood by all of the facets of the organization is key. The acquisition cost of a new customer is 5x an existing one, high there needs to be a good balance between net new logo and existing customers.


    Cross selling of new products to existing customers is also key to managing cost while driving exponential growth.  As a PE firm, you invest because you want to use the money to drive EBITDA and growth at a faster rate than pre investment, and this is an area to focus on.  The other concept that is more and more prevalent in PE portfolios today is cross selling across different PortCos.  This can only be achieved with a great Customer relationships, and that comes from a Cx program.  A great tool to accelerate your program is the SBI CX Strategy 2019 Workbook.


  1. Customer References


    In creating accretive value to a PE firm, customer references can be a significant way to drive success.  The Cx program should have an element of Customer Success that manages customer references.  The value is 3 fold.  First, PE firms need to always look for great customer relationships to know that the PortCo is listening to their customers.  Second, Cx and references can help to drive new business, well managed reference can turn into referrals to new customers which will drive new business.  Lastly, these references can the PE firm realize the investment with an Advisory Board, and this can help to drive cross sell across the PE portfolio.


Some additional tips in the articles below might help you in your Customer journey:


  1. How Do You Measure Customer Success
  2. The Account Manager Position Is an Endangered Species
  3. Will a Traditional Customer Success Approach Work for You?
  4. UX Isn’t Enough – Why an Integrated CX Strategy Will Help Drive Growth


Download the CX Exploratory Questions Tool to build a starting point of questions to ask of your buyers and customers, to understand how your own company perceives the CX, and to start to plan actions that initiate your company’s CXT based on real insight.



Additional Resources


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Gregg Blatt

Gregg’s role at SBI is to leverage his experience to drive growth for clients by solving the revenue and market growth challenge.

Peers, Clients and CEOs describe Gregg as a transformation strategist and industry thought leader. He has deep experience as a field executive implementing and managing multiple global sales teams.  He has a track record of outstanding performance in IT Services, SaaS and IT Consulting. Prior to joining SBI, Gregg held the position of CRO for Cast Software where he was responsible for global sales and solution delivery. Other executive positions include iRise, Keane, Headstrong, James Martin and Company, Comdisco and NYNEX.  Roles includes executive sales, marketing, delivery and board positions.

Gregg’s career has included everything from branding and transformation programs, field marketing/lead generation, organization, market and comp plan design, sales process and enablement programs to new team rollouts across NA, Europe and APAC.

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