How to Differentiate in the Private Equity Crowd

How can Private Equity firms differentiate themselves in an increasingly competitive market? 

To explore the process by which fund managers and institutional investors can achieve differentiation on the “path to the top,” I interviewed Jill Montera, VP of Customer Success at Altvia. The discussion is being presented in a series of blog posts to capture the breadth and depth of this timely topic. 

Since 2015, Altvia has been deepening its customer success focus – can you share what the primary goal is for Private Equity customers? 

For customer success, our primary goal is delivering value for clients’ Private Equity software solution. And delivering value is not a one-time event; it’s iterative over the customer’s journey. Making sure your system is evolving as your business grows so that it’s fresh and relevant. Providing new solutions to increase productivity and further integrate data into a holistic picture. Our focus is to ensure that the system really works for our customers’ people and processes. 

Now, let’s segue to the customer journey towards “differentiation” – how do you typically approach this journey? 

We start with systems and processes that engage. Two key words: systems and processes. You’ve bought the Private Equity software system. Now it’s about understanding and creating the business processes and then aligning the system to those processes. Sometimes there is a tendency to jump to the “end game” of your desired outcomes – and while we can appreciate the anticipation, our job is to help lay the foundation on which to build for the future so that the system and processes are continuously advanced for alignment with the customer’s goals. 

How does your methodology work (as a SaaS-based company)? 

First, systems don’t define processes. Processes should define systems. The processes include:

  • What do we do – i.e., how are we capturing data
  • Who does what for these processes
  • Are we all aligned to that vision
  • Are we all following these processes

Putting in the work early and often is essential to this stage of the foundation building. There are two key steps that leadership teams must take in order to systemize their core processes. The first is to identify, simplify and document all of the core processes within the business. The second step is to ensure that everyone in the organization follows these processes. The key outcome of this stage is to get buy-in from all levels of the organization, and commit to creating and using a system as well as refining the processes that align to that system. 

What challenges for Private Equity firms are typically experienced in this phase towards differentiation, and how can they be resolved? 

One challenge, in particular, is that folks want to jump right to the desired outcome – just like the “lose weight fast” or “get rich quick.” You can’t jump to the end without doing the work at each stage of the journey. So we work closely with customers to dial in the core processes as this foundation will set the customer up for success. Team engagement is a key challenge as well. Establishing the processes and system that lead a Private Equity firm towards differentiating itself in a highly competitive market is clearly a team effort. As the foundation is built, team engagement is the catalyst for adoption. It’s cultural and it’s pivotal. Once the culture embraces the new processes, then the system can be built to support and drive these processes. As a customer success organization, the path towards resolution is really geared towards:

  • First, we will work to understand the key stakeholders during the buying and onboarding process. Without buy-in from all levels of the organization, onboarding will not go as well as possible.
  • Second, we will work to understand your objectives. This can often be the translation between the systems and the processes. If we better understand objectives, we can help drive accountability and value.
  • Third, we will focus on training and adoption. Good systems and processes are only as good as the people who use them.
  • Lastly, coming out of the onboarding, we will identify next steps and objectives for focus.

Can you share a Private Equity customer example? 

Customers that have the greater success have clear and well-developed processes. Once these are dialed in, then they layer on the technology to automate and optimize. The foundation is so critical that if it’s not done correctly then there are typically repercussions in the coming months and years. One customer who is doing a particularly great job with this is a US-based buyouts-focused fund of funds with $5B under management. They ensure that everyone knows and follows a process and the system supports every step. Usage is strong throughout the organization, regardless of title. The managing partners are some of the most active users and it’s not just as a reference tool, they are regularly enriching the data and ensuring that decisions are made with accurate information. 

What are the key takeaways for Private Equity firms? 

While I can think of a number of takeaways, here are the ones that can really make an impact for this first phase of building the foundation for differentiation:

  • Get alignment and excitement across the organization. Answer ‘why’ for all roles so they know why it’s so important. Gain shared commitment.
  • Start with your processes and make sure they are defined, understood and followed across the organization
  • Once the processes are defined, work with Altvia on customizing your system. Include stakeholders at all levels that can help drive engagement with their peers.
  • Once the system is live, commit to making the system great. The key to these systems getting off the ground is 110% commitment to populating the data, making it complete, making it accurate, and using the system regularly. Capture as much as you are able and don’t be as concerned with all that you will get out of the system (analytics and discoveries). Those days are coming…it’s about getting started and bringing the Private Equity software solution to life.

About Jill: 

Jill Montera joined Altvia in 2008 with many years of experience working in higher education and in management consulting where she led large-scale technology implementations for Fortune 500 companies in the telecommunications and energy industries. At Altvia, Jill leads Customer Success, and loves working directly with clients to help them find long-term and ongoing value. In her free time, Jill volunteers with various education non-profit organizations. She enjoys spending time in the Colorado outdoors with her husband and 2 sons hiking, skiing, running and watching soccer. Jill also loves travel and has visited 6 of the 7 continents.

A traditional crm was built for general ‘customer’ scenarios

Software platforms have made the world a better place by making work a better place. Indeed the world is better off when people enjoy their jobs even marginally more, and workplace applications on big CRM platforms like have done that and much more.

But the potential that platforms like these offer presents diminishing returns: once the platform provider has engineered too many industry specific components into its platform, its usefulness for other industries begins to be threatened, and with that so do the usefulness of the component tools built into the platform.

So it is with the CRM category that has defined: it is generic enough to work for many industries, and yet still offers the potential for others to round off the edges and nail more vertically-oriented and extremely tailored software solutions.

Private capital markets are actually a great demonstration of this dynamic. Where generic CRM platforms simplify — appropriately so — to assume there’s a business, a customer, a sale, and service of that customer, there are a few industry-specific pieces that are missing.

Take for example, that investors become customers by investing through legal entities the GP raises. It’s a subtle but important nuance that just doesn’t make sense at a platform-as-a-service level (because it’s overly complicated for a simple one-time sale that many industries require), but which can easily be added without 10 years or software engineering. Once provided, the rest of the platform’s components become tremendously powerful again and you’re set to take over the world.

As a traditional CRM in our pillars methodology, these nuances must be present to properly account for investors in these legal entities, potential target companies and which are owned by these entities, the context of all interactions with these parties (as well as the appropriate overlap, ie co-investments), and how you’re arriving at finding these opportunities on both sides of the equation, such that you’re able to piece together what’s effective and what’s not. Not just because we say so, but because these are the very relationships and data that are key to the motivation behind a CRM in any industry.

It’s critical, too, that the valuable publicly-available information that helps to enrich CRM systems and save users painful steps of entering it themselves is fully-integrated at the platform level.

Again, look no further than the 3,000+ pre-built integrations that — the creator of the CRM platform concept — has at a platform level to do so, and which only exists by way of holding just short of overly-specifying certain industry workflows that would present challenges to properly integrate.

Stakeholder reporting and communication (investor relations) draws on a range of datasets

The traditional “customer service” model of CRM systems once again makes overly-simplified assumptions about the customer relationship when applied to private capital markets.

In fifteen years I personally have yet to hear the terms “warranty” or “service call” in this market because it’s just not the same. But make no mistake, as uncomfortable as it may be to say aloud, customer service is more important now than ever and it’s constantly happening; the industry is, after all, considered to be a financial “service”.

As it turns out, that service is primarily information-based — it’s driven by data and takes the form of reports and analysis that drive decisions, and then end up again in investor-facing reports and analysis.

The foundational elements of a private capital markets CRM must be built such that they accommodate this data (like we discussed above), but so too that it can accommodate additional supporting data that investors (customers!) need in the context of service.

Oftentimes this supporting data — financial metrics and time-based values, for example — is believed not to meet the traditional definition of CRM and the natural thought is “well, better do this in Excel!”.

While I happen to believe Excel is still the greatest software application ever built, its introduction to this value chain we’ve discussed herein actually creates the problem many firms suffer from: key data needed to provide customer service (again: effectively the entirety of a firm’s reports and analysis) is now in disparate systems and detached.

Both of those dynamics are important and distinct: not only is this supplemental data disparate, but when brought together there is no logical association that can be made between the two data sets.

Allow me, then, to make the point very simply: not only can this financial and time-based value data (you may be thinking about is as “portfolio monitoring” or “accounting”) be a part of a CRM, it is arguably the most important part of a CRM because it’s at the core of what providing service to the customer entails — information that comes out of data!

Firms need a digital method to engage stakeholders (ie investor portals)

Investor portals are not new; in fact, for many of us — including myself — they conjure up horrifying nightmares in which we’re aimlessly guessing at folders to find the newest document we need.

So in lies the opportunity: not only have the portals we’ve come to hate not simplified the process of acquiring information, they’ve failed to create an entirely new experience that is “customer service” driven.

To be fair, this is not a B2C market where you’d be long out of business for not having focused on customer service and thus the customer’s technology-driven experience. But don’t expect to be around too much longer if you aren’t thinking about this shift.

Today’s institutional investors increasingly expect this same consumer-like experience, and a massive opportunity is being missed by not providing it. It’s not about providing them the experience they desire; it’s more about the ability to measure engagement that is had in return.

Put simply: what’s keeping the market from providing this experience is the availability of the information that’s required to create the service that provides the experience.

If you’ve hung in this long, you know that by focusing on your CRM, you have the data that’s required to manage the customer relationship and the technology-driven experience through which that information is shared to create a differentiated and opportunistic customer experience.

investor relations communication