September 29, 2017
Interviewed by: Privcap
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Private Equity Value Creation: Sales Team Optimization

Private equity experts from Arsenal Capital Partners, Sentinel Capital Partners, and EY discuss how investors can help their portfolio companies add value through sales-platform optimization.

Private equity experts from Arsenal Capital Partners, Sentinel Capital Partners, and EY discuss how investors can help their portfolio companies add value through sales-platform optimization.

Private Equity Value Creation: Sales Team Optimization

The best private equity firms help their portfolio companies reimagine their sales functions

David Spaight, Arsenal Capital Partners:

I spent over 25 years of my career on the sales and marketing side, so as we’ve gone into some of the portfolio companies that we’ve acquired and take a look at the structure of their sales organization, one of the first things we’re looking at is to make sure that we’ve got the right people in the right locations doing the right things. That sounds pretty simple, but in many of these cases, you’ll come across companies that are putting a salesperson in the Midwest and then having that person cover the West coast or the East coast.

Luke Johnson, Sentinel Capital Partners:

If you would imagine, we have a platform company, we go out and we acquire another business, which comes with its own salesforce, so we have a lot of experience in understanding how to optimize salesforce organizations. It’s not as simple as slapping one and two together. We have, through our operating model, CMOs and sales experts who have led sales organizations around the world. We bring into those situations and, through working with the management team, we will construct and come up with the right salesforce optimization strategy.

Spaight: Just by repositioning people into those locations, making sure they’ve got the right training and educational background and that they’re doing the right things in terms of building up the key account relationships has a tremendous impact in the overall productivity and efficiency of the sales end.

Johnson: Especially in healthcare services—we’ve noticed that sales is very under-penetrated and underdeveloped in many of these smaller, privately-held physician practice management businesses, so one of our businesses, we actually created a salesforce from scratch.

Again, through our domain and knowhow of having done this in previous transactions, we’re able to bring those strategies and the right strategies for that situation.

A private equity sponsor can help a company step back and make sure the sales team matches the strategy

Herb Engert, EY:

Oftentimes, you can potentially get salespeople and salesforce off strategy with the overall business strategies, but until you figure out the incentives and the strategy itself, you can’t go back and say, “Do we have the right people, then? Are we chasing the right things?” And oftentimes, you’re not, if you really want to say, “This is where I want to take a business,” and then the salespeople are over here focused in this customer niche?

If you really want to take the business in a particular area, you’ve got to make sure they’re focusing on the right targets.

The mandate to transform sales is part of a continued PE focus on operational improvement

Engert: The world’s changed. It used be a buy and hold and try to play with some financial metrics. Now, it’s a buy and transform.

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