Why CEOs Must Prioritize Customer-Centric Strategies to Attract PE Buyers

So, you’re looking to sell your company. No judgment–just about every tech company has some sort of exit strategy. As you prepare your company for a potential sale to private equity (PE) firms, it’s easy to focus heavily on growth metrics and customer acquisition–after all, new logos are sexy.?

But you want to know what’s sexier to a potential buyer??

Sustainable growth.

If your top-line growth is built on a shaky foundation of high churn and low loyalty, you’re presenting short-term success rather than long-term stability. To be blunt, it’s putting lipstick on a pig, and PE firms see through it. They’re not just interested in how fast your company is growing, but how sustainable–and predictable– that growth is. That’s where customer-centric strategies, such as advocacy and community-building, set your company apart as a solid, valuable investment.

Why Customer-Centricity is Key

Customer Loyalty Drives Sustainable Growth

Sustainable growth hinges on customer retention and loyalty. Companies that build deep relationships with their customers—by focusing on advocacy and community programs—see stronger long-term success. When customers aren’t just satisfied but actively promoting your brand, they become a powerful growth engine. For example, SaaS companies with robust customer advocacy programs often see up to 200% revenue retention from loyal customers, compared to the 100-120% industry average. This kind of loyalty-driven stability is exactly what buyers value—engaged customers who are not only sticking around but also contributing to predictable, long-term revenue.

Lower Customer Acquisition Costs (CAC)

Acquiring new customers is 5-7 times more expensive than retaining existing ones. By building strong customer communities and advocates, you create a system where your customers do some of the work for you. Loyal customers tend to refer others, reducing your reliance on expensive acquisition efforts. PE firms appreciate companies with low CAC because it reflects the business’s ability to scale efficiently, which directly impacts profitability.

Plugging the Leaky Bucket

Think of your company as a bucket. If you’re constantly signing new customers who don’t receive value from your product or are a bad fit, they’ll leave quickly, creating a “leaky bucket” situation. To keep the bucket full, you’ll need to pour in more and more new customers, driving up costs and distracting from long-term success. In a good year, the average close rate for new deals is about 20-30%, while retention rates for existing customers often range from 80-90%. Continuously replacing lost customers at a lower success rate adds significant pressure to your sales and marketing teams, and it signals a major red flag for long-term stability. PE firms can easily spot this churn problem, making your company less attractive--and that can translate to lowball offers, or none at all.

Higher Valuations Through Customer Advocacy

High customer satisfaction and advocacy not only stabilize growth but also drive higher valuations. A Bain & Company study found that businesses focusing on customer advocacy grow revenues 2.5 times faster than those that don’t. Furthermore, PE firms tend to assign higher valuation multiples to companies with a Net Promoter Score (NPS) over 60, viewing them as lower-risk investments.? In industries like software and services, where customer sentiment directly impacts market position (why else do we work so hard on those G2 and Gartner Peer Insight rankings?), strong advocacy and loyalty can be a significant competitive advantage.?

The Importance of Customer Testimonials

When prospective clients evaluate your company, they often want to hear directly from current customers—particularly those who switched from a competitor the prospect is also considering. If you can’t easily provide a customer willing to share their success story–or have to keep asking the same people over and over again because you don’t have a deep enough reference pool– what does that say about your relationships? It raises concerns for both the prospect and potential PE buyers.

The Internal Fallout of Overpromising

Another common issue that arises from weak customer fit is internal friction. Under pressure to hit quotas, sales teams may overpromise on features or knowingly sign up customers who aren’t a good fit. Once the deal is closed, the customer becomes someone else’s problem—often landing in the hands of Customer Success teams.

This creates a domino effect of issues. Customer Success Managers (CSMs) now have to spend time “saving” accounts that were in trouble from the beginning. This not only diverts resources from nurturing healthier, better-fit customers (and their potential upsell and cross-sell opportunities) but also creates stress, reduces morale, and fosters tension between departments.?

Ask yourself this: how likely is a CSM going to go out of their way to secure the perfect customer reference (often as part of a last minute request) for Sales, when Sales keeps handing them problem-child accounts, and/or also neglects to credit their contribution if the deal closes?

PE firms can detect these inefficiencies within organizations, recognizing how such internal friction can erode profitability and operational stability. A business running this way is less likely to attract high-value buyers.

Real-World Proof: Salesforce & Hubspot

Consider Salesforce, a leader in customer-centricity. The company’s customer success programs have driven high retention and made Salesforce an attractive investment. Its community of Trailblazers—dedicated users who advocate for the brand—has played a key role in its sustained growth and strong market valuation. This type of community-driven loyalty demonstrates the power of customer-centric programs to deliver long-term value.

Another strong example is HubSpot, which has grown exponentially by focusing on customer success and building a loyal community of users. HubSpot’s inbound marketing approach encourages customers to engage with the platform through extensive educational resources, community forums, and certification programs. This focus on empowering customers has helped HubSpot achieve impressive customer retention rates and sustainable growth.

Build a Business That Lasts

As you prepare your company for a potential sale, it’s tempting to focus solely on growth metrics and acquisition strategies. However, PE firms are seeking businesses that will thrive in the long run, not just for the next quarter. By investing in customer advocacy and community-building now, you’re not just bolstering growth—you’re securing it for the future.

Ready to make your company irresistible to PE buyers? Let’s talk about how we can help you implement customer-centric strategies that drive sustainable, long-term growth!