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B2B

This is an overview of the business model specific ways to look at B2B analysis, especially B2B software subscriptions. For the big list of questions which are relevant to any business see

Questions/Opportunities

  • Customer growth
    • A story of expansion in customer base
  • Churn
    • Has customer renewal improved or declined over time?
    • What are the big predictors of churn?
    • What are renewal rates by segment?
    • Can customer churn be anticipated and mitigated?
    • Can we identify customers who are likely to renew or churn?
    • Land-and-expand is a huge part of business subscription businesses. You buy a subscription and then expand that over time. The LTV grows for a customer over time. (Lucky8 Daily Q2 2017, 20170424)
    • What is the portfolio renewal rate
    • For customers that are up for renewal, how to determine what is at-risk?
    • How do we reactivate the higest quality customers efficiently?
    • Understand what the churn is by product
  • Pricing
    • What are the correct price point break segments?
    • What are the pricing and discounting trends by segment? What role has bundling played?
    • How does pricing vary throughout the company by customer, product, geography?
    • Can prices be increased?
    • What are the optimal discount strategies?
    • What are the optimal pricing and discount offers?
  • Up-sell/cross-sell
    • What is the true up-sell/cross-sell opportunity across segments?
    • How does the identified up-sell/cross-sell compare to management methods?
    • What are the big predictors of upsell?
    • To what extent is there cross-selling in the customer base and where is that coming from?
    • What are the cross-sell rates based on customer LTV for key products?
    • Is there cannibalization impact between license and cloud?
  • Sales optimization
    • What are the metrics for best and worst sales reps?
    • What is the optimal approach to load balance inbound, outbound, new, and upsell sales opportunities?
  • Product portfolio
    • What new products or services can be offered or cross-sold?
    • Which customers are transitioning to Saas/Cloud from on-prem licenses?
      • What are the profiles of these customers?
      • What do these customers buy?
  • R&D spend rationalization
    • What is R&D spend allocation based on best and worst customer LTV
  • Snowball
    • What is the customer journey? Marketing/sales - acquisition channel - product, pricing - renewal/churn (snowball)
    • How do customers develop over time?
    • How do snowballs compare to management numbers?

Growth metrics

A few growth metrics that are specific for B2B analysis

  • ARR
  • Exit ARR = yearly ARR
  • Net retention - especially for each segment of customer
  • ARPU
  • ARPS = avg rev per subscriber, different than ARPU b/c this one is only subscriptions
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