New

Investor Cheat Sheet: Key Questions to Evaluate the Marketing Strategies of Your Portfolio Companies

vector research partners

Investor Cheat Sheet: Key Questions to Evaluate the Marketing Strategies of Your Portfolio Companies

For private equity firms, the ability to analyze and optimize the marketing strategies of portfolio companies is a game-changer. And it all starts with asking the right questions.

We recently published a white paper exploring how private equity firms can connect digital marketing efforts to critical business metrics like EBITDA. A key feature of this paper is an investor cheat sheet that outlines must-ask questions to quickly assess the marketing strategies of your portfolio companies.

Without these insights, understanding how marketing performance impacts the bottom line becomes an uphill battle.

Ready to dig deeper? Download the white paper for a step-by-step guide to building financial models that directly link digital marketing to EBITDA. And keep reading for a curated list of questions to ask your portfolio companies’ marketing teams.

Questions on Customer Acquisition

Identifying the most effective touchpoints for acquiring new customers is essential. Start with this foundational question:
What touchpoints drive the most incremental benefit for new customer acquisition?

But don’t stop there—follow up with:

  • What are the tactical priorities of these touchpoints for acquisition?
  • What input metrics (spend, click-through rate, conversion rate, etc.) influence these priorities?
  • Why do we believe this impact is achievable?
  • How confident are we in these tactics working? (And why?)
  • What tests or data can we use to validate and improve confidence?

These questions help uncover not only the strategies being used but also their effectiveness and rationale. This understanding is critical to optimizing marketing efforts for measurable financial outcomes, including EBITDA growth.

Questions on Customer Retention

Retention is just as vital as acquisition—perhaps even more so for long-term profitability. Start with a question that mirrors your acquisition focus:
What touchpoints drive the most incremental benefit for customer retention?

Then, follow up with:

  • What are the tactical priorities of these touchpoints for retention?
  • What input metrics (retention rate, order frequency, average order value, etc.) affect these priorities?
  • Why do we think this impact is possible?
  • How confident are we in these tactics working? (And why?)
  • What tests or data can help validate and improve retention efforts?

By asking these questions, private equity investors can gain a clear understanding of the retention strategies in place and their actual impact. Strong retention strategies directly contribute to EBITDA and overall enterprise value.

Questions on Discount Strategies

When portfolio companies use discounts, it’s critical to evaluate their effectiveness and long-term impact. Start with this question:
How is the discount strategy impacting acquisition and retention metrics?

Then, explore further:

  • How has the effectiveness of discounting evolved over time?
  • What changes, if any, do we foresee in the discount strategy?
  • How does discounting affect the team’s ability to test in non-discount environments?

That last point is especially important. Frequent discounting can erode the ability to gather insights outside of sale periods. For instance, if discounts are offered monthly, most purchases may cluster around the sale period, leaving little data for non-sale strategies.

The real question becomes:
How can the team develop insights and run effective tests outside of discount cycles?

Empowering Better Decisions

The questions above are designed to help you connect digital marketing performance to EBITDA—and ultimately to enterprise value. To take this further, your financial models should include a tactical layer, allowing you to link marketing decisions directly to business outcomes.

For more guidance on asking the right questions and building a tactical financial model, download our white paper. It’s your roadmap to leveraging digital marketing as a powerful driver of EBITDA growth and investment success.

By vector research partners