By Peter Geisheker
In a B2B portfolio company with under-built marketing, marketing can plausibly deliver a third to half of the EBITDA growth a value-creation plan needs, through five levers: price realization, win rate, qualified pipeline, retention, and acquisition cost. It cannot deliver leverage or multiple expansion. The share depends on the starting point, so it has to be modeled lever by lever, not assumed.
Key facts
- A typical PE deal once needed about 5% annual EBITDA growth to return 2.5X over five years. Bain now says “typical deals now require around a 10% to 12% average annual growth in EBITDA to generate the same benchmark 2.5X return over five years” (Bain & Company, 2026 Global Private Equity Report press release).
- For deals done from 2010 to 2022, leverage and multiple expansion made up 59% of returns, and revenue growth and EBITDA margin expansion (net of dividends and debt paydown) made up the other 41% (StepStone analysis, cited in McKinsey, Global Private Markets Report 2026).
- In B2B companies that build several commercial capabilities at once, Bain typically sees “a 10% to 20% top-line acceleration, and a 10% to 15% EBITDA uptick” (Bain & Company).
- For a typical midsize US company, McKinsey found a 1.0% improvement in pricing raises profits by 6.0% on average (McKinsey & Company).
- My own career results include a 77% reduction in paid acquisition costs and 100% year-over-year SaaS revenue growth for three consecutive years. Those are the two ends of the marketing lever: spend less per customer, and grow faster.
Where PE returns come from now
Every PE return comes from three sources: EBITDA growth (revenue growth plus margin expansion), multiple expansion, and leverage. For most of the last cycle, the last two did much of the work. That is the 59% in the StepStone figure above.
Bain describes the current setup plainly: borrowing costs “in the 8% to 9% range, leverage ratios of 30% to 40%, and purchase multiples in record territory,” and “the lower leverage and lack of multiple expansion make value creation more challenging” (Bain & Company). Holding periods at exit for buyout funds now hover around seven years, up from five to six years in 2010 to 2021 (same source).
So the plan has to be built on EBITDA growth. That is the part of the return a CEO and a marketing leader can actually move. Marketing does not touch leverage. It affects the multiple only indirectly, through the quality and durability of growth, which is covered in our piece on marketing and PE exit multiples. This page stays with EBITDA.
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The five places marketing adds EBITDA
Marketing is not one lever. It is five, and each flows to EBITDA in a different way. Mixing them up is how value-creation plans end up with a single “marketing” line that nobody can audit.
| Lever | What marketing changes | How it reaches EBITDA | How fast it shows |
|---|---|---|---|
| Price realization | Positioning, segmentation, value messaging, discount discipline | Almost all of the gain drops to EBITDA if volume holds | 1 to 2 quarters |
| Win rate | Sales enablement, competitive positioning, proof assets, ICP fit of opportunities | Incremental revenue at contribution margin | 2 to 3 quarters |
| Qualified pipeline | Demand generation, channel mix, conversion | Incremental revenue at contribution margin, less program cost | 2 to 4 quarters |
| Retention and expansion | Customer marketing, onboarding content, cross-sell programs | Revenue kept or added at contribution margin, usually cheaper than new revenue | 3 to 4 quarters |
| Acquisition cost (CAC) | Cutting spend that produces no pipeline, shifting budget to proven channels | Direct cost reduction | 1 quarter |
Pricing is the most underrated row. McKinsey’s PE pricing work found that a 1.0% pricing improvement lifts profits about 6.0%, versus 3.8% for an equal cut in variable costs and 1.1% for fixed costs, and that when PE firms tackle pricing in portfolio companies “we typically see margin expansion of between 3 and 7 percent within one year” (McKinsey & Company). Pricing is often treated as a finance project. In practice, a company can only hold a higher price when its positioning and sales story justify it, and that is marketing work.
A worked example for a $30M portfolio company
Everything in this section is illustrative. The company, the baseline, the improvements, and the multiple are assumptions I chose to show the mechanics. They are not results from any client, and your numbers will differ.
Assumed baseline:
- Revenue: $30M. EBITDA: $4.5M (15% margin).
- Contribution margin on incremental revenue: 50% (after cost of goods and variable selling cost).
- Qualified new-business pipeline: $40M a year, closing at a 20% win rate ($8.0M of new bookings).
- Gross revenue churn: 12% a year.
- Marketing budget: $1.6M.
- Assumed exit multiple: 9x EBITDA, held flat so marketing gets no credit for multiple expansion. Enterprise value at baseline: $40.5M.
Assumed improvements, run-rate by about year three:
| Lever (illustrative) | Assumed change | Added revenue | Added EBITDA |
|---|---|---|---|
| Price realization | +1.5% realized price on $30M | $450K | $450K |
| Win rate | 20% to 22% on $40M pipeline | $800K | $400K |
| Qualified pipeline | +10% ($40M to $44M) at 22% win rate, less $250K added program spend | $880K | $190K |
| Retention | Gross churn from 12% to 10% | $600K | $300K |
| CAC efficiency | Cut $200K (12.5%) of budget producing no pipeline | $0 | $200K |
| Total | $2.73M | $1.54M |
What that does to value (illustrative):
- EBITDA moves from $4.5M to about $6.04M, a 34% increase. The margin moves from 15% to about 18.5%.
- At the assumed 9x multiple, enterprise value rises by about $13.9M, from $40.5M to about $54.4M.
- To hit Bain’s 10% to 12% a year over five years, this company needs roughly $2.75M to $3.43M of added EBITDA. The marketing levers above cover about 45% to 56% of that.
- If only half of each improvement lands, EBITDA rises about $770K (17%) and enterprise value about $6.9M. That is close to the 10% to 15% EBITDA uptick Bain says it typically sees from commercial programs, which is a useful sanity check.
Three things stand out. First, pricing and CAC are the cheapest dollars: no added volume, almost pure EBITDA. Second, pipeline growth looks big on revenue and modest on EBITDA because it costs money to buy; a plan that only grows pipeline undersells marketing’s contribution. Third, the remaining half of the required growth has to come from somewhere else: operations, procurement, add-ons, or new products. Marketing is a major contributor to the plan, not the whole plan.
What marketing cannot do in the plan
Be clear with the board about the limits, because overpromising is how marketing loses its seat.
- It cannot fix a product the market does not want. Win rate and retention gains assume the product is competitive.
- It cannot change the debt structure or the entry price. Those were set at close.
- It cannot guarantee the exit multiple. It can make growth more durable and better documented, which buyers reward, but the market sets the multiple.
- It cannot show full results in one quarter. Price and CAC move first. Win rate, pipeline, and retention take two to four quarters to show up in EBITDA.
What to measure in the 100-day plan
The first 100 days are for baselines and the first two levers. Without baselines, the EBITDA bridge at the next board meeting is a guess.
- Days 1 to 30: build the baseline. Realized price versus list by segment, average discount, win rate on qualified opportunities, qualified pipeline by source, gross and net revenue retention by cohort, fully loaded CAC and payback by channel, and marketing spend mapped to the pipeline it produced.
- Days 31 to 60: size each lever. Put a dollar range on each of the five levers using the baseline, the same way the example above does. Agree the assumptions with the CFO so finance owns the model, not marketing.
- Days 61 to 100: pull the fast levers. Cut spend that produces no pipeline. Tighten discount approval. Fix positioning where you are losing on price. Launch the pipeline and retention programs that take longer to pay off.
- Day 100: lock targets into the plan. Each lever gets an owner, a baseline, a 12-month target, and an EBITDA value.
What to put in the quarterly board report
Board reporting should read like an EBITDA bridge, not a campaign recap. One page is enough.
| Lever | Board metric | Leading indicator to watch |
|---|---|---|
| Price realization | Realized price vs. list, average discount | Discount requests, win rate at new price points |
| Win rate | Win rate on qualified opportunities, by segment | Competitive loss reasons, stage conversion |
| Qualified pipeline | Qualified pipeline created and coverage of next two quarters’ bookings target | Pipeline by source, cost per qualified opportunity |
| Retention and expansion | Gross and net revenue retention | Renewal risk list, expansion pipeline |
| CAC efficiency | Blended CAC and CAC payback in months | Spend by channel vs. pipeline produced |
| Total | Marketing’s EBITDA contribution vs. plan, in dollars | Variance explained by lever |
The last row matters most. When marketing reports its contribution in EBITDA dollars against the plan, the operating partner can compare it to every other lever in the value-creation plan on the same terms.
Who runs it
Someone senior has to own the model, the baselines, and the board reporting. In a $20M to $50M company, that is often more than the existing marketing manager can carry and less than a full-time CMO’s salary justifies. A fractional CMO is one way to staff it. If you are not sure what that role is, start with what a fractional CMO is. How sponsors actually deploy one across a portfolio is covered in how private equity firms use fractional CMOs.
Frequently asked questions
What share of PE value creation can marketing realistically deliver?
In the illustrative $30M example above, the five marketing levers cover roughly 45% to 56% of the EBITDA growth Bain says a deal now needs. At half execution, it is closer to a quarter. The real share depends on how under-built marketing was at entry, which is why the 100-day baseline matters.
Should pricing sit in the marketing plan or the finance plan?
Both, with clear owners. Finance owns the price list and approval rules. Marketing owns the positioning, segmentation, and sales story that let the company hold a higher price without losing volume. McKinsey’s PE research shows pricing is one of the highest-return levers available, so it should not fall between the two.
Why does the example hold the exit multiple flat?
To avoid double counting and to keep the model honest. Marketing can support a higher multiple by making growth more durable, but the market sets the multiple. Model marketing on EBITDA alone, and treat any multiple gain as upside.
How long before marketing improvements show up in EBITDA?
CAC cuts and pricing changes can show within one or two quarters. Win rate and pipeline gains typically take two to four quarters, and retention gains show at renewal cycles. Plan the board’s expectations around that sequence.
What contribution margin should we use for incremental revenue?
Use your own, from the CFO. The example uses 50%, after cost of goods and variable selling cost. A software company may run higher and a services or distribution business lower, and that difference changes the EBITDA value of win rate, pipeline, and retention gains.
Build your own version of the math
If you are a portfolio company CEO or an operating partner and want this model built on your real numbers, book a 30-minute growth plan session on Google Meet with Michael Pecora and me. You get a written growth plan within 3 business days. There is no hard sell, and we take only 10 companies a month. Book your growth plan session.
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Sources
- Bain & Company, “Private Equity Resurgence Gathers Steam as New Era Challenges Firms to Enhance Value Creation” (Global Private Equity Report 2026 press release)
- McKinsey & Company, “Global Private Markets Report 2026: Private Equity”
- Bain & Company, “How Commercial Excellence Jump-Starts Growth in Private Equity”
- McKinsey & Company, “Pricing: The Next Frontier of Value Creation in Private Equity”
