Tag: microsoft

The Importance of Investing in Technology for Operationally Geared Businesses

Market and industry awareness coupled with experience is invaluable in operationally geared businesses; especially those that are subject to cyclical or seasonal revenue flows. Whilst this will give a good insight into external factors, data and the quantification of performance or trends remains the nadir of prudent decision making. The time delay between calendar month end and senior management receiving reliable performance data is an uncomfortably common scenario. Compound this with an operationally geared business and the data, and decisions made as a result, might seriously lag the actual performance of the organisation. Risk in this scenario is exacerbated where profits are under pressure due to high operational gearing.

Improving customer acquisition rates and retention in subscription-based business models; the importance of Net Promoter Score

It is of little surprise that business models have become more subscription based. Companies benefit from a recurring revenue stream and greater revenue predictability. Consumers pay for time-bound access to goods and services, avoiding large capital expenditure when compared with buying the same access outright. However, as subscriptions become the dominant model, high customer loyalty and net promoter scores are needed to ensure consistent business growth. Given that customers are paying for access rather than ownership, it is easier to switch to competitive products at the end of contract terms. Crucially, this could be before customer lifetime value (LTV) has balanced customer acquisition costs, therefore yielding a negative gross customer margin.