Why Private Equity Firms Should Adopt A Consumer Marketing Perspective

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Humphrey Ho, CEO Helios ⁘ Partners , is a benefactor of arbitrage with over two decades of experience in equity management.

Private equity has long been celebrated for unlocking value in undervalued companies and underperforming sectors. Yet, despite its financial acumen, the industry faces a critical and often-overlooked weakness: a need for more consumer marketing expertise.

Failures highlight a recurring pattern: While PE excels at financial and operational restructuring, firms sometimes overlook the strategic imperatives required to build sustainable, consumer-facing brands.

At the heart of the issue is what many in the industry call "spreadsheet thinking." PE firms are driven by data—metrics, forecasts and financial models. While this approach serves them well in identifying high-potential acquisitions, it can prove inadequate when addressing the nuanced challenges of consumer behavior, brand positioning and creative storytelling, all of which are elements that are increasingly essential for portfolio companies to differentiate themselves in today's digital, saturated and interconnected marketplace.

For example, a firm positioned as investing in Hispanic founders might diversify its portfolio to include unrelated industries or founders of different backgrounds because the financials look promising. While diversification isn't inherently negative, it highlights a deeper issue: PE firms may be disconnected from the markets and communities they aim to serve.

This disconnect can be exacerbated by how PE handles marketing. I've observed many firms that rely on outsourced agencies and freelancers, often selected through high-cost pitches. Some have attempted to internalize these services by building in-house agencies to capture portfolio marketing budgets. However, I've found these efforts sometimes lack an understanding of agency processes, creative collaboration and consumer engagement.

Consumer-facing businesses require more than financial and brand engineering to succeed. They demand an investment into understanding markets, cultural trends and the emotional drivers of consumer behavior. Yet, I've found marketing and branding are frequently relegated to PE's operational playbook afterthoughts. It's hard to measure brand love with return on ad spend. It's impossible to engineer it.