The Outsourced Advantage: How PE Firms Use External Lead Generation to Boost Portfolio Success
Growth Orbit Insights
In the high-stakes world of Private Equity (PE), it’s all about finding innovative ways to fuel the growth and profitability of portfolio companies. Increasingly, PE firms realize the value of outsourcing lead generation, an integral function that can make or break a company’s long-term success.
by Steve Schilling
Lead generation, while pivotal, is not an easy task. In fact, 65% of businesses, according to HubSpot, cite generating traffic and leads as their most significant marketing challenge. This struggle comes as no surprise, given the constantly evolving digital landscape, the need for specialized skills, and the high cost of qualifying market and nurturing leads. For portfolio companies, this challenge can be a significant roadblock to growth.
The key to overcoming this hurdle, as indicated by a report from McKinsey, lies in embracing digital transformation. An astounding 90% of small and medium-sized B2B companies struggle with implementing, managing and optimizing the necessary sales and marketing tech stack, a struggle that can hinder scalability and competitiveness. By tapping into outsourced lead generation services that are adept in digital strategies, these companies can fast-track their growth and make a stronger mark in the digital market.
On top of aiding scalability, outsourcing lead generation can prove to be a cost-effective solution. A Forrester research finding reveals that companies that excel at lead nurturing generate 50% more sales-ready leads while spending 33% less. This shows that outsourcing not only streamlines the sales process but can also deliver a higher volume of quality leads that are more likely to convert.
When considering the cost aspect, we should also reflect on the resources saved. As per a PWC survey, 77% of CEOs believe that their biggest growth threat is the lack of key skills. Outsourcing allows portfolio companies to dedicate their resources to what they do best, while experts handle lead generation.
In a business environment where personalized customer journeys are pivotal, data quality is more important than ever. A study by Teradata underscores this, with 80% of marketing executives predicting that their future success will rely on delivering a seamless and personalized customer journey. Access to high-quality data can often be a struggle for in-house teams, but it’s a strength that outsourced services can bring to the table.
On the operational side, a Time Management of Sales study indicates that sales reps spend 66% of their day on non-revenue generating activities, which hampers productivity and revenues. By outsourcing lead generation, companies can ensure their sales teams’ focus is on closing deals, thus boosting efficiency.
Finally, survival rates are an important consideration. According to the Small Business Administration, only about 50% of all businesses survive beyond five years. To stand the test of time, a steady stream of leads and sales are crucial, which is where outsourced lead generation can play a crucial role.
All these points coalesce into a significant insight – Private Equity firms see the outsourcing of lead generation as an opportunity to optimize costs, boost ROI, enhance scalability, and ultimately ensure the long-term success of their portfolio companies. It’s a strategy that fosters resilience in a ruthless market and fuels prosperity, proving that the outsourcing of lead generation can be a game-changer in the world of Private Equity.