Reinvent your customer experience to maximize profitability

By James S. Cassel

James Cassel headshotMiddle-market business owners can improve profitability and customer loyalty by routinely evaluating and enhancing the quality of the experiences their companies provide for two of their most important stakeholders: customers and employees.

Consider the success story of Starbucks (NASDAQ:SBUX), which incorporated the right design and branding to turn coffee houses into institutions where people spend hours and pay a premium for what is perceived as the right experience that encourages folks to congregate. Apple (NASDAQ:AAPL) turned computers and other devices into status symbols by, among other things, using great design and strategically positioning its iconic logo on laptops to face onlookers rather than users. The Apple Store became the poster child of an innovative venue by implementing things like the genius bar for on-site consultations; a welcoming, open design; and an engaging atmosphere. Google (NASDAQ:GOOGL) is acclaimed for providing employees with uniquely generous benefits, including free meals and access to the latest technology, free massages on campus, permission to bring dogs to work, generous parental leave policies and spousal death benefits, among many other things.

Why are these companies going to these lengths? To a large extent, these trends are being driven by the desire to attract and retain loyal customers as well as quality talent. They are particularly interested in a new generation of workers, including millennials, who want the “total package”: innovative, forward-thinking business environments as well as stock options.

Recognizing this, middle-market businesses and even more traditionally conventional businesses, such as law firms and accounting firms, are beginning to take steps in this direction. As a middle-market business owner, how can you apply these learnings to help take your business to the next level? Here is some practical guidance based on my experience helping middle-market business owners navigate these questions.

While a variety of elements ultimately create your customer experience, addressing the following key factors is a good start: your office layout and design; your company atmosphere and activities; and your marketing and branding.

Before doing anything, it is important to engage your key stakeholders and ensure that you have established (a) consensus upfront that a modification of your business experience is necessary or beneficial and (b) an internal committee that will be able to weigh in on the process. Outside firms and consultants can be beneficial. Without this, you are likely to waste valuable time, money and other resources undertaking a process that may not lead to the right result, that may get road-blocked by internal resistance, and/or that may never get implemented due to lack of support for the financial and other investments that may be required.

The most important thing is to find the approach that will fit your company’s unique needs. Try evaluating what other companies in and outside your industry have done, and find bits and pieces that are a fit for you.

Identify a realistic budget. Not every company can afford to give employees the free meals, unlimited paid time off, and some of the other benefits that a growing number of technology companies are offering today. Work with qualified experts with proven experience helping similar companies in your industry to develop a plan for identifying and creating the right solution for you. It might not be necessary to move your office to a new location or to completely overhaul your culture or your brand; you might be able to get by with just making a few strategic adjustments. These adjustments could include creating special events and promotions to appeal to affinity groups. For example, lululemon (NASDAQ:LULU), which is credited for pioneering the “athleisure” clothing business, has achieved great success by providing free yoga classes at its stores and discounts for yoga instructors and company employees.

Your marketing programs also should be continuously evaluated for maximum impact. It is important to work with skilled marketers who can ensure your brand positioning and all aspects of your marketing — including your logo, business cards (if you still use them), messaging, and website — are consistent with the experience you wish to create. With folks relying on their technologies to evaluate companies and make business decisions, it is imperative for your brand across earned, owned and paid media channels to be consistent and effectively support the experience you seek to create. For example, it makes little sense for a company seeking to position itself as high-tech and appeal to consumers on mobile, to have an outdated website that is not optimized for mobile.

The key is to work with the right experts who can help guide you through this process and ensure you find the right solution for your needs — and to do so continuously to ensure you are keeping pace with the changing needs of your employees and customers.

James Cassel is co-founder and chairman of Cassel Salpeter & Co., LLC, an investment-banking firm with headquarters in Miami that works with middle-market companies. He may be reached via email at or via LinkedIn at

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Tech investments report highlights cluster of IPOs amid stagnant year

By Debora Lima

Miami-based investment banking firm Cassel Salpeter & Co. released this week its quarterly review of technology investment activity, which highlights a recent cluster of initial public offerings amid a mostly stagnant year.

The report covers the period between July 1 and September 30. It finds that a bulk of public offerings occurred during Q3 — five in September (Nutanix, Tabula Rasa Healthcare, The Trade Desk, Everbridge and Apptio) and Impinj in the previous month. The activity overwhelmed that of the preceding eight months’ combined — five IPOs in Q2 and none in Q1.

The average enterprise value of Q3 IPO companies was about $150 million, about half of Q1 IPO companies’ average enterprise value of $300 million.

The underwhelming pace of 2016 can be attributed to the robust private market, said Cassel technology director Ranjini Chandirakanthan, who helped compile the report.

“There is so much money in private equity,” she said. “There is a willingness to pay and value, more than the public markets do today.”

Acquisitions remain the most common — and attractive — exit options for high-growth startups, said Jim Cassel, a founding partner of the firm.

“[Firms are] looking for an exit strategy. They have a life in which they’re supposed to put money out, harvest and liquidate. IPO isn’t that event. Because they have to liquidate stock over time,” he said.

Startups are similarly drawn to M&A. Chandirakanthan estimates that “a vast majority” exit through those vehicles.

But it isn’t uncommon for startups to toy with the prospect of an IPO as a vehicle to private equity. According to Cassel, some companies prepare the necessary materials for a public offering and intentionally let word get out.

“It implies [to private equity] that, ‘If you buy now, you’ll pay less than later,’” once the company goes public, he said. “And that may or may not be true. The public markets are fickle. It’s just conjecture.”

Looking ahead, a number of IPOs are likely in the pipeline for 2017 — but the status quo holds.

“M&A will be the exit for many companies,” Cassel said. “There is a private equity market that is flush with cash that is looking for companies that fit their ethos.”

Cassel Salpeter & Co.’s full 2016 Q3 technology investment activity report is available online.

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Boxycharm participated in a majority recap and received growth capital from KarpReilly

  • Background: Headquartered in Miami, FL, BOXYCHARM is the premier monthly beauty box subscription service, delivering 4-5 full-size and luxury travel-size products of well-known, popular, chic, and up-and-coming cosmetic brands. BOXYCHARM’s unique value proposition is their ability to provide a combination of the newest and highest quality brands and products in full-size offerings, while most competitors offer sample-size products.
  • Cassel Salpeter:
    • Served as financial advisor to the Company
    • Ran a competitive capital raise process, identifying and contacting over 100 strategic and financial parties
    • Structured a minority recap and growth capital raise with a built-in option for a majority recap
  • Challenges:
    • Earn-out structure to increase valuation of capital infusion contingent on success-based performance benchmarks
    • Minority shareholder buyout
    • No prior relationship with investor
  • Outcome: In February 2016, KarpReilly Investments, LLC invested in BOXYCHARM. Subsequently, in October 2016, KarpReilly exercised their majority recap option. KarpReilly is a private investment firm based in Greenwich, CT.