Private Equity and the Art of Storytelling (and the Importance of Brand Research)

June 30, 2015

- Bill Haynes

Storytelling is as old as mankind. Whether it was sharing tales around a campfire or paintings on cave walls, it’s clear that storytelling is in our DNA.

Stories convey information, entertain, build relationships and impart lessons. And as those in marketing well know, stories can be critical in building brands. This is why in a hyper competitive market the art of storytelling remains essential today for financial services firms including private equity firms, who need to convey their unique value to investors and business owners. In fact, the importance of storytelling was a key theme at the recent Private Equity International annual IR and Communications Forum in New York.

“To tell a story that people want to listen to and will remember, private equity firms first need to identify their firm’s unique positioning and shape their stories around their brand.”

The good news is there are more places than ever to tell one’s story. The bad news is there are a lot of other storytellers around the campfire. So, how can GPs stand out amid the crowd and articulate their story in a way that rises above the cacophony?

To tell a story that people want to listen to and will remember, private equity firms first need to identify their firm’s unique positioning and shape their stories around their brand.

What makes the firm special? Is it the firm’s focus, approach, success, expertise, relationships? If so, how does the firm do these things better than the competition? How does this benefit their constituencies? And, importantly, how can they demonstrate it with proof points that support their narrative?

Developing the Story

Private equity firms first need to perform brand research. This begins with internal interviews, including key executives and other personnel, and from there should extend to external constituencies, such as LPs, portfolio company CEOs, investment bankers and business brokers, and others who know the firm well. These interviews can be done in-house, though we’ve found that third parties tend to have much greater success soliciting honest, unvarnished answers that provide a true representation. Branding expertise is also helpful to delineate the specific common attributes that come out of the interviews and can be leveraged to highlight the firm’s competitive advantages.

Next, conduct secondary research of key competitors. Look at the way they describe themselves as well as how they are portrayed in the marketplace. Also examine the strategies they employ to raise their brand visibility. This exercise can identify best practices that may be overlooked as well as pinpoint the white space available to exploit.

Third, based on the brand research, think about how can you verbally, visually and strategically position your firm to stand out from your competitors. This essential brand research and positioning will provide the platform for all your marketing efforts.

All of this research is used to develop top-line brand positioning and a visual identity, including a tagline if appropriate, new logo if needed, website and marketing collateral, as well as a brand guide to ensure consistency, which is a prerequisite for success in any branding effort.

The importance of brand research was a key discussion point in the “Best Practices in Marketing” panel at the PEI event, which was moderated by Ben Veghte, VP of Communications for the National Venture Capital Association.

For instance, Emily Mendell, VP of Communications at Polaris Partners, noted that when she joined the firm, among her first endeavors was to employ a similar approach to brand research.

“First identify and articulate the firm’s brand story and then tell it consistently across multiple channels,” she said.

Graham Hearns, Managing Director of Global Marketing/Communications at The Riverside Company, echoed this sentiment, noting that a “brand audit is essential” before launching any marketing communications program.

Telling the Story

According to Hearns, The Riverside Company uses all the tools at its disposal to share the firm’s story consistently. That approach constantly evolves as the firm combines media relations, videos, its website and social media and other tools to make an impact on its audiences.

“We want any stakeholders to have compelling and positive thoughts about Riverside,” said Hearns. “Our branding is part of who we are, and as a firm we seek to have people say great things about us whether we’re in the room or not.”

“You have to be true to your brand,” said Karen Bommart, VP of Marketing at Battery Ventures. “Private equity firms also need to commit to a sustainable PR program; not just make deal announcements.”

Emily-Jane Finigan, VP of Investor Relations and Business Development at Landmark Partners, underscored that media relations is a strategic endeavor that can be undermined by a carpet-bombing approach. “Not diluting your message or bombarding reporters is important,” she said.

Identifying your private equity firm’s unique story and then consistently and strategically sharing it through multiple channels can amplify and reinforce your message and help your firm build a brand that stands out from the pack.