Outsourced lead generation to become the 'new norm' for PE-backed businesses
Outsourcing the generation of leads and new business will become the ‘new norm’ as the pandemic eases, one leading digital marketing firm has predicted.
Scottish headquartered 4icg Group, chaired by entrepreneur Brian Williamson, says it has experienced an increase in private equity backed businesses looking to retain its services because of the need to recover falling revenues and maintain equity value.
Dr Williamson pointed towards American PE-backed software and tech companies who accelerate their growth by outsourcing lead generation from day one to build sales volume quickly – a business model which is moving across the Atlantic.
Williamson says: “Business quickly had to deal with the immediate impact of the pandemic but now we’re seeing companies taking the steps to recalibrate in line with revisions to their medium and long-term strategies.
“For PE backed businesses, generating leads quickly and in good volume from a limited sales budget is more important than ever. A total package per sales employee may be GBP75k per annum but delivering the volume from that is trickier than ever given the restrictions on movement. A remote sales force can be guilty of chasing rainbows right now in an effort to justify their existence. Companies need and want a more solid sales pipeline.
“Outsourcing to experts whatever their field of expertise has been well established in US software and tech companies for years. Consultants such as VMware Pivotal Labs have been the first port of call with PE houses as their outstanding expertise can take products to market quicker and with an improved margin. That acceleration of a plan is exactly the space in which 4icg operate.
“The key point for us when working on behalf of PE-backed businesses is getting in early. This can be at the due diligence stage with targets to show investors what is possible post investment. Of course, post investment we have seen our PE backed businesses over perform as a direct result of our lead generation. This is often even more relevant when we deliver guaranteed leads ready to convert when an exit is on the horizon.
“The sales landscape has altered dramatically in the last 12 months and we’re now receiving more approaches from businesses who want to know what the outsourcing model will entail. Impatience is the driver, and we expect our outsourced model will become a new norm in the next two years.”
Lorraine Gray, director at 4icg Group, adds: “We’ve built a specialism in working alongside PE backed businesses and recently completed a three-year contract for one company that had a five figure value for 4icg. Over the term, 100 leads were generated worth GBP3.2 million for the client which led to a multi-million increase in the value of the business prior to its sale by its PE owners.
“The key requirement from us was sales to allow the business to be scaled up quickly. Our relationship with the client delivered a clear collective vision of where to target our efforts which saved a tremendous amount of sales mining time.
“We are enjoying similar success with other software and technology companies who are adopting the outsourcing model but it is clear that this is becoming a sector-wide trend which is being accelerated by companies who are reacting to how business can be done in the current climate. It is a change that is here to stay.”