Cloud Equity Groups Sean Frank Talks About Differentiation in Business

In a hyper competitive world where information is readily accessible, and industries have standardized operations and customer services, how does one stand a chance to gain market share? Sean Frank, a Managing Partner at private equity firm Cloud Equity Group, shares a few tips for entrepreneurs.

Find the Right Niche

Finding an area of focus or a niche is the necessary first step to differentiate a business. Say you want to offer social media management services to small businesses: How do you compete with the hundreds of thousands that are already out there? Well, start with some broad topics: Will you target a specific geographical area? Will you only work with specific businesses? Do you want to provide services at a specific price point? In answering these types of questions, you’ll reduce your pool of competitors pinpointing the specific types of customers to go after.

Cloud Equity Group uses size as a differentiator as it competes in an extremely saturated market of capital providers seeking companies for investment. Sean Frank notes that “we primarily invest in businesses that are doing between $1 – $10 million in revenue. This is our sweet spot of tremendous opportunity as there are very few reputable capital providers. We’ve developed a reputation over the years of being one of the most active investors, if not the most active investor, in tech enabled business service providers within this market segment.”

Build Brand Loyalty

Obviously going the extra mile helps ensure a happy client. In competitive industries where clients can easily choose who they decide to do business with, service is vital. “People don’t remember what you say, they remember how you make them feel. This translates to business. Customers don’t typically develop an emotional attachment to a business simply because it fills a need. If you make a client or customer feel well-served and appreciated, an attachment is developed, along with loyalty.”

Cloud Equity Group encourages their portfolio companies to build strong relationships with their customers and employees by regularly sharing satisfaction and suggestion surveys, often with a completion incentive, to gather important feedback directly from the source. According to Sean Frank, feedback is reviewed at the highest levels of management and implemented as much as possible. This is an effective method for portfolio companies to constantly evolve to be better businesses for customers and employees alike.

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