I’m going to say something that makes most PE operating partners uncomfortable. Brand is not a luxury. It’s a valuation multiplier.
I know. In a PE-backed environment where every dollar needs to show return within a compressed timeline, “brand investment” sounds like the opposite of financial discipline. It sounds like the kind of thing a CMO says when they can’t prove their pipeline numbers.
But after 12 CMO and 3 P&L general manager roles, and 5+ years advising PE portfolio companies through Demand Revenue, I can tell you with certainty; the companies that build durable brand equity and brand reputation gravity are worth more at exit than the companies that spend everything on short-term demand generation. And the data proves it.
The Short-Term Trap
Most PE-backed marketing strategies follow a predictable pattern. New CMO arrives. Board wants pipeline. CMO cranks up demand gen. Paid search. Content syndication. Intent-based outreach. ABM campaigns. The dashboard lights up with activity metrics. MQLs climb. Pipeline grows.
Then something happens. CAC starts climbing. Conversion rates flatten. The same prospects who engaged with your campaign three months ago are now ignoring your emails. Your cost per opportunity creeps from $4K to $6K to $9K.
What went wrong? You burned through the 5% of buyers who were in-market and had nowhere else to go.
Kerry Cunningham‘s 6sense research makes this painfully clear; 95% of your buyers aren’t in-market right now. And when they do enter the market, they start with a shortlist of 4 to 5 vendors. The winner comes from that Day 1 list 95% of the time.
If your company isn’t on that shortlist, no amount of demand gen will save you. And the only way to get on the shortlist before the buyer is ready to buy is brand reputation and gravity
What Brand Actually Does in a PE Context
Bob Wright from Firebrick, Inc. has spent years studying what brand means for B2B companies. His work consistently shows that the strongest B2B brands aren’t the ones with the biggest advertising budgets. They’re the ones that consistently communicate a clear, differentiated point of view to a specific audience.
In PE terms, brand does three thing:
First, brand reduces CAC and gives you more at-bats. When prospects already know who you are and what you stand for, the cost to convert them drops dramatically which also gives you more at-bats. I’ve seen companies reduce their CAC by 30% over 18 months simply by investing in consistent brand presence alongside their demand gen programs. It’s your future pipeline.That’s not soft metrics. That’s hard dollars.
Second, brand improves win rates. When you’re on the Day 1 shortlist, your sales team starts conversations from a position of trust rather than a position of explanation. Brent Adamson‘s research on B2B buying behavior shows that vendor credibility and reputation are among the top factors in purchase decisions. Brand builds that credibility before your rep ever picks up the phone.
Third, brand gravity increases exit multiples and gives you more pricing power. Chris Burggraeve understood this at AB InBev and at viscomte dot com; brand belongs on the balance sheet. It’s an intangible asset that acquirers pay a premium for. A company with strong brand recognition, clear market positioning, and a loyal customer base commands a higher multiple than a commodity competitor, even with identical revenue. It also
The Brand-Demand Integration Model
I’m not arguing for brand instead of demand. I’m arguing for brand and demand running as an integrated system. Here’s how I structure this in PE portfolio companies; Allocate 70% of marketing budget to demand generation and 30% to brand. Not 95/5. Not 50/50. The 70/30 split gives you the pipeline performance PE sponsors need while building the brand gravity that compounds over time.
Priority 1: Thought Leadership That Creates Category Authority
Not generic blog posts. Not recycled industry reports. Original points of view that position your company as the authority in your category. I encourage every CMO I coach to build a content engine around the company’s unique intellectual property. What do you know that nobody else knows? What frameworks have you developed? What data have you collected?
Carol Meyers has built brands this way repeatedly. The companies she’s led didn’t win on advertising spend. They won by becoming the most trusted voice in their category.
Priority 2: Executive Visibility
The CEO’s personal brand and the CMO’s personal brand are brand assets. In B2B, buyers trust people more than they trust logos. A CEO who publishes thoughtful perspectives on industry challenges creates more brand equity than a $500K display advertising campaign. This is especially true in PE-backed companies where the leadership team often has deep domain expertise that never makes it into the market. Surface that expertise. Make it visible.
Priority 3: Customer Story Amplification
Product selfies don’t sell. Customer stories do. The most powerful brand content I’ve seen isn’t about the product. It’s about the customer’s transformation. What did they struggle with? How did they solve it? What results did they achieve?
When your customers become your best marketers, you’ve built earned growth into your brand strategy. Fred Reichheld‘s entire framework rests on this principle; the best growth comes from customers who love you enough to bring others along.
Measuring Brand Impact in PE Terms
PE sponsors will ask; “How do you measure brand?” Here’s one place to start: Share of voice in your category (are you being mentioned more than competitors?). Organic traffic growth (are more people searching for you by name?). Inbound pipeline percentage at-bats (what percentage of pipeline comes to you rather than being chased?). Time to close (are deals moving faster because buyers already trust you?). CAC trend over 12 months (is acquisition getting cheaper as brand builds?). There are some example Brand reputation KPIs in the chart below that balances Awareness, Perception, and Preference elements of brand reputation.None of these metrics require faith. They all connect directly to revenue and efficiency.
Brand reputation is a durable asset with strong and compounding financial impacts that build over time. Demand gen is a depreciating one. Every dollar you spend on demand gen produces a one-time return. Every dollar you spend on brand compounds over time.
In a PE-backed environment, the companies that build both are the ones that command premium exit multiples.
