When a potential buyer enters M&A discussions, they’re thinking about the product.
What they’re also thinking about, though, is the engine around that product and how well it runs.
Marketing sits at the front line of that engine. How it performs can influence not only enterprise value, but whether a deal happens at all.
I recently had the chance to sit down with Diamond Innabi, Principal at Software Equity Group, who has more than a decade of experience managing successful M&A deals across industries like energy, government, higher education and real estate.
She shared insights on where marketing metrics fit into the M&A process and how they can make or break outcomes.
Marketing’s Role in M&A Conversations
On the front end of marketing, it’s all about getting the right leads into the organization and doing it efficiently so you’re not wasting money. Equally important is what happens on the back end: Are you overspending to support or retain customers who weren’t the right fit to begin with?
At the end of the day, business leaders are concerned about impact. When you’re spending a lot of marketing dollars and losing customers quickly, it affects everything across the organization and gives potential buyers more reason to pause.
So yes, new business growth is important, but it's moot if customers don't stick around long enough to get a return on the cost to acquire them.
Key Metrics That Tell the Marketing Story
When it comes to evaluating marketing performance in M&A deals, Innabi focuses on a handful of metrics that speak to a company’s ability to grow efficiently and sustainably:
Customer Acquisition Cost (CAC)
How much does it actually cost to acquire one customer? CAC shows how efficiently your company is bringing in new customers and whether growth is being fueled cost effectively.
Customer Lifetime Value (LTV)
How long are existing customers staying on, and how much revenue are they generating? When LTV consistently outpaces CAC, it signals that growth is scalable and sustainable.
Payback Period
How quickly can you recoup the cost of acquiring a customer? Pairing CAC with payback period turns it into a powerful indicator of operational efficiency. Improving CAC payback from 12 to nine months, for example, shows faster ROI and better capital discipline.
Gross Revenue Retention
Retention is the clearest measure of customer and revenue health, and one of the first metrics buyers look at in the due diligence process. When gross revenue retention hits 90% or higher, it tells buyers that the customer base is sticking around, expanding and delivering ongoing value.
While these marketing metrics are top of mind in M&A deals, others come into play as well, from employee net promoter score to customer satisfaction score. We take a deeper dive into these and other metrics that influence successful mergers and acquisitions in our new partnership piece with SEG.
What a Strong Marketing Engine Looks Like
When all of these metrics align, they paint a clear picture of a well-oiled marketing machine.
Innabi explained it best:
On the front end, that means identifying your ideal customer profile (ICP) and marketing directly to them. When you’re not winning because you’re not marketing and selling to the right types of customers, you will lose customers through churn. If you’re directing your efforts in the right direction with the right message, you’ll spend less, hold onto more business and drive revenue growth.
“The companies I see do the best in market have great sales and marketing engines,” Innabi noted. “They’re able to clearly talk through their pipeline, how they’re winning leads, what their most efficient channels are, how those channels go through the organization and the impact they’re making.”
Data Alignment: The Confidence Factor in M&A Deals
Even the best M&A metrics lose their power if the data behind them doesn’t line up.
When numbers don’t match across different sources, it can signal that the business might not be well-run. From a buyer’s perspective, those inconsistencies raise bigger questions: If the data doesn’t line up, what exactly is this company charging toward? Without shared data and a clear north star guiding decisions, the organization risks losing credibility and, ultimately, valuation.
“When a buyer is confident in your business and you have credibility with them, they can go back to their team and fight for a higher valuation because they have confidence in what they’re seeing and the story you’re telling,” Innabi explained. “If they don’t have the information they need, they can’t fight for that.”
Building a Marketing Story That Helps Win Deals
The strongest M&A outcomes start with a story buyers can believe in: one built on credible data, consistent performance and confidence in how the business model scales.
In Innabi’s words:
“If you can pair a great product with a team that knows what they’re doing, a buyer is going to see that and say ‘this is a sophisticated organization where I can just pour money into the company’s sales and marketing engine and let it fly.’”
That credibility is what ultimately strengthens your position in the M&A process. When buyers can trust your data and see a clear, repeatable growth engine from your company’s operating performance, they’re more likely to view your business as a sound, scalable investment.
To her point, in M&A, and especially in the SaaS world, it comes down to efficiency, predictability, defensibility and repeatability. The right marketing metrics prove those qualities, allowing businesses to tell their story clearly and reduce the risk in a buyer’s mind.
For more insights into telling marketing stories that speak to potential investors, see our partner piece with SEG.
Bridget Cunningham
