By Gabe Galvez
Co-Founder of CAPTARGET, LLC
Founder/CEO of Merger Labs LLC
What if I told you that you could easily catch up with your competition by making just a few small changes to your M&A firm?
Well, that is exactly what we are going to talk about in this article. Below are four simple, but often overlooked hacks that can make your firm more attractive to potential clients and help you leave the competition behind.
#1 Focus On a Single Vertical or Geography Only
Seems counter intuitive right? After all, the more diverse your service and market are the more clients you can win. While that is true in theory, it is very hard to do in practice. Acting as industry agnostic and covering a wide area means that:
- You may look like any other M&A firm – it is hard to differentiate.
- You will feel the internal struggle of trying to pull the company in all directions which can slow growth and client acquisition.
- You opt-in to competing against much more competition
Now, let’s consider the benefits of a specialized approach:
- You provide more value to the client by simply doing what you do best.
- You can focus your sales and marketing efforts – with a small team this is key.
- You immediately make your M&A firm different than most.
Let’s get real, none of us are experts on everything…playing to your strengths is always a good idea!
#2 Define Ideal Prospect Profile
This may seem obvious, and maybe it is, but many M&A professionals talk to non-fitting leads and waste huge amounts of time and effort.
Bestselling author Michael Port calls this the Red Velvet Rope Policy – wherein you only accept the most ideal clients. A good way to understand who this ideal client may be is to look at your past successful engagements.
Ask yourself questions beyond deal structure, like:
- What was the seller background?
- How old was the seller?
- What type of client best supports the business sale process?
Understanding what type of client works best with your business model and bedside manner AND vetting/engaging this prospect will increase close rates and reduce time spent chasing leads that may not be a fit anyway.
#3 Distribute Marketing Efforts Among Your Team
This is a common mistake: When things slow down you generate new leads through cold calling, cold emailing and trade show attendance (among other activities).
With all hands focused on the next deal you forget one of the most critical trust and value building pieces of the puzzle – marketing. There is no shortage of excuses as to why we neglect marketing, the most common being time… You just don’t have time, right?
If this is indeed the case, consider distributing your marketing efforts among your team. If your team is small and deal maker focused, consider hiring deal makers that have cross-functional backgrounds to add more value to the firm as a whole. The distribution could look like something like this:
- 1 person posts to your website’s blog once per week/month
- 1 person keeps an eye on social media activities
- 1 person can maintain your sales peripherals
If you are a one-person team or if your team simply doesn’t have the background to manage these processes, consider working an outsourced digital marketing provider – there are only a few that focus specifically on M&A.
#4 Don’t ignore the back office
Potential clients are being vetted by many of your competitors constantly. The M&A service provider count has nearly doubled in the last ten years. Your potential clients may have no issue with your firm being small, but they will certainly not work with a firm that has limited capacity or back office resources.
While M&A firms have traditionally relied on internal analysts to support all things deal prep, there are alternatives that can save cost-sensitive firms money without compromising capacity. Committing to long-term, fixed back office costs creates less competitive firms. By buying analyst coverage on a short-term basis and no longer having to purchase data or tools annually, you can be competitive in the market while making a much smaller investment. Outsourced analysts can be leveraged from a few firms (ours included) to help support:
- PitchBook preparation
- Prospect list building and data mining
- Diligence support
- Financial modeling
Any support options M&A firms can leverage to keep principals involved in high value client contact are worth considering.
Gabe Galvez is the Co-Founder of CAPTARGET, LLC and the Founder/CEO of Merger Labs LLC. Both companies are first movers in the M&A support services space and are focused on helping improve the operations of M&A firms big and small.
CAPTARGET provides M&A research and deal preparation support to M&A firms by providing U.S based analysts on a project or short-term commitment basis. CAPTARGET also supports the deal origination needs of middle market Private Equity firms. www.captarget.com
Merger Labs is the only digital marketing firm exclusively dedicated to supporting the M&A community. Merger Labs builds websites, provides SEO and content creation services, manages pay-per-click campaigns and manages social media accounts for middle market M&A and Private Equity firms.