Earlier this year, a principal of a prominent private equity firm that manages several billion in funds and with whom we were engaged in active discussions about a new and responsive website threw us an interesting curve just prior to concluding our discussions: “While we’re confident that you guys are the firm to go with, our CFO thinks a private equity websites should cost us no more than $10,000.” Because they had set their sights on the likes of custom websites we’ve designed for such firms as Mason Wells (Milwaukee), Keystone Capital (Chicago) and Cortec Group (New York), I took a deep breath, looked at my Digital Creative Director, Clement, who responded by saying to our Client “so what exactly do you have in mind?” Our prospect’s reply was not exactly what we expected: “Look, I want to have a site similar to the firms we like and those you identified in your competitive review; you guys do great work but if it’s going to cost us at least twice as much as what my CFO is expecting is there any way you can help me justify it?”
While MVP lives and breathes branding and design, we recognize that the benefits of a professionally designed custom website might not be self-evident to some internal stakeholders who may view a website as a more of a marketing expense than a prudent investment in their private equity firm’s (or in the case of their portfolio companies’) future valuation.
Putting on our thinking caps and true to our own “Most Valuable Partner” brand positioning, we replied “We’re on it and will get back to you by your board meeting”—and so we did.
We began by asking ourselves “What’s the one question that we’ve heard most often when discussing the website and brand marketing objectives of the private equity, M&A and Mezzanine capital providers we worked with over the last few years?” Turns out that for the subset of principals we’ve interviewed (among the more than 1,700 other North American Middle Market private equity firms that Pitchbook accounts for), the response we’ve heard most often was to “be different.”
That said, many of our clients recognize that given today’s highly competitive private equity marketplace, it’s not just about being different, it’s about making a difference. How could we justify asking clients to a pay premium for a high-quality custom designed and developed website when a template alternative might just make the grade in the minds of some of our more frugal firms.
Looking within, we recalled the oft-quoted Louis Sullivan maxim that “form follows function.” As (web) architects ourselves, we recognized that when PE firms strive to connect with management teams, intermediaries and limited partners, and differentiate themselves from others, compromising on content, user flow and functionality to satisfy predetermined template requirements is hardly the fulfillment of that time-tested paradigm.
Likewise, to dismiss the often-heard argument that most private investment firm sites are not lead engines, we’d posit that just because you’ve haven’t generated well-qualified leads in the past, doesn’t imply that it can’t happen in the future. Moreover, your website is the first impression a client will have of your firm and the old adage “you don’t get a second chance to make a first impression” couldn’t be more apt. Simply stated, after you’ve left the boardroom, your site should remain a potent visual and verbal reminder of what your firm stands for and why it exists.
What’s the rationale for a tailor-made, content management system (CMS), responsive website in comparison to an off-the-shelf, low-cost, template alternative? We think the question can be addressed from two perspectives: The first, which gets to the heart of business valuation, views the website as an investment in or proxy for your brand and not just a marketing expenditure. The second, which elaborates on the value of perfecting user experience, addresses the pros and cons of customized website design and development vs. template alternatives. While the choice in ultimately yours, we believe the following evidence will help you make the right decision in favor of your Private Equity, M&A or Leveraged Finance firm.
From a Brand Investment Perspective
Your private equity brand is unique to your firm and all communication assets should reflect its core identity, mission, vision and values. If properly conceived and articulated, your website, effectively the personification of your brand, should work 24 x 7 every day of the year to inform internal and external stakeholders about your value proposition and guide users to follow your online queues and calls-to-action. Simply stated, in the battle between branding and budget, we feel the former is worth fighting for—and here’s why.
Many of our private equity firm clients have told us that when the competition is close, and they’re down to the wire, their website, as an extension of their brand, can often act as either a deal-maker or a deal-breaker when management teams are comparing two well-qualified firms and comparable offers. Thus, when making your pitch to prospective portfolio company management teams, how can they trust that you’d be a good steward of their brand, if you do not invest in yours?
Here at MVP, we believe that Branding is Invaluable℠ and walk the talk in our marketing strategy, brand design and technology efforts. For those needing to make the case for a more professional and aspirational site in tune with company values, we’re confident that the following references will assist you in justifying such expenditure as an investment in your brand—an intangible. And as recent research in the Forbes Marketing Accountability Study (2017) indicates, intangibles can account for as much as 10% of Enterprise Value (EV) in B2B businesses.
We invite you to draw on the following links when pitching your team on the better branded website argument:
From a Website Design and Development Perspective
Assuming you’ve got the partners sold on the value of making your intangible brand tangible, it’s time to consider the ways in which a tailor-made website can make a difference in your marketing efforts. Presenting your brand image, content and calls-to-action in a fast, fluid and engaging manner can truly justify the added investment over lower-cost generic alternatives provided you know the back-story.
Accordingly, take two steps back and ask yourselves what marketing goals and objectives you want your website to achieve. The answer will likely be threefold: First, from a marketing perspective to better inform prospects of your business and brand positioning. Second, to design a site that is visually engaging and verbally differentiated from the myriad of others in the market. And third, to employ the best user experience and technology techniques available to better engage audiences in the most compelling and efficient manner possible.
Therefore, when choosing between tailor-made and template based alternatives, we offer the following guideposts, recognizing that the choice is yours.
Template-Based, Open Source Websites: Affordable but caution is advised
.NET CMS Websites: Secure, Slow to Load and Best Suited for Related Applications
Tailor-made Open Source Websites, Designed with Your Brand and Business in Mind
MVP expects our holistic brand-to-web approach to serve as a useful example of why tailor-made websites are superior to template themed alternatives for M&A, sub-debt and private equity websites. Through our own three-pillar MVP TeamMate℠ methodology, which synthesizes Branding, UX/Design/Development and SEO best practices and our 20 years of related private capital marketing and communications experience, we’re confident that we should be on your short list when it comes to crafting a distinctive, tailor-made site that functions as well as it looks.
And in the end, our prospective PE firm partner succeeded in convincing his cost-conscious CFO to make us their “most valuable partner.” It seems that for this firm, in the debate between a tailor-made vs. template-driven website, quality really did matter most.
By Dick Weinrib with contributions from Clement Vaccaro and Jeff Leslie.