Although some call it “free advertising,” public relations isn’t free. It’s not even cheap. Like any other business investment, it’s only worthwhile if it pays off. The best PR programs are designed to meet business objectives, from product visibility to expansion into new markets. A successful PR campaign can also support or accelerate a liquidity event or deal – like an IPO, strategic acquisition, or merger.
A liquidity event is not only a good reason to invest in public relations, but it’s one situation where the right PR strategy can drive a higher valuation for the deal.
In that case, the right PR team can help. Some executives are reluctant to share their end game, due to the unpredictability of market conditions or because they don’t want employees to be unsettled. But it’s a good idea to make your PR team aware of a critical business goal. That way the organization can be well positioned for a deal that may happen months or years down the road. Here’s how the right PR strategy can help prepare for a liquidity event.
Strategic PR creates a high-value positioning
The right positioning is more than an elevator speech or mission statement. It’s how a product or service fits into a broader category, where it stands out, and why it’s different or better. Positioning must be backed with real evidence. But a smart communications approach can help change or expand a company’s identity, which in turn helps build a healthy valuation for the business.
Our firm was brought in by a successful email services provider (ESP) who had built and bought technology to expand its services into marketing automation and digital marketing. The moves were part of a plan to sell the company and deliver a robust return for its investors and key officers. Yet its theoretical valuation was stuck at the email provider level. Recognizing that a “marketing technology” identity would help grow its business and strengthen the perception of its value, the company and our team worked to create an updated, technology-focused positioning. Two years later, the company joined a Fortune 20 company as its key cloud marketing technology unit in a lucrative exit for investors.
A good PR plan communicates business leadership
For a regional credit union, we built upon an existing educational campaign to promote financial literacy for member companies and their employees through seminars and collateral materials. We wrapped the campaign in a thought leadership banner carried by the CEO, in contrast to competitive banking institutions. The campaign issued a call-to-action for users to “Break Up With Your Bank.” It emphasized the CU’s personal touch and its initiatives that worked for member companies who wanted to support their own workforces with financial education and offerings. The campaign such a splash in the personal finance press and category trades that it caught the attention of a larger organization. A strategic partnership led to a successful merger.
Thought capital drives differentiation
The right strategy can also position a client as an upstart or innovator when its size and orientation don’t match that of category leaders. We helped devise just such a strategy for a German mobile navigation company. Its tech was based on a crowdsourced mapping method that represented a new wave in navigation. The PR strategy helped it stand out among a crowd of mapping startups and positioned it as a leader in a dynamic category. It was acquired by one of the category leaders within 18 months — a bittersweet but successful exit for the thirtysomething founders.
PR helps a brand punch above its weight
We helped another tech startup gain notoriety far beyond its size by arranging for it to comment publicly on key moves by category leaders like Apple and Google. Its founder became known for his pointed observations about larger competitors. One leading tech blog suggested—somewhat facetiously—that Apple might do well to acquire his company, and, boom, it was officially in play. It did close a deal – not with Apple, but with a key industry player that offered an excellent growth path for the founders.
Good internal communications helps manage change
Finally, strategic PR can help an acquired or newly public company grapple with the communications challenges that come with a merger or acquisition. During such circumstances it’s important for the organization to keep a sharp focus on its business. And during times of change, the support and cohesion of key internal audiences like employees, partners, and stakeholders can mean the difference between a sloppy or disastrous exit, or a smooth and profitable transition—the business outcome that lets everyone win.