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Measuring, Managing and Monetizing for Success in the Cloud
Mass Technology Leadership Council Breakfast Seminar March 29, 2012
Service vs. Technology: What Should Your Cloud-based Company Deliver?
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A Cloud Revolution… or Evolution?
• The concept of cloud computing has been around since the 1960s.
• Since then, it has undergone a metamorphosis into ASP, SaaS, IaaS, and what we now holistically call cloud-based services.
• Companies delivering cloud-based technology/service need to adapt to what modern consumers expect from their solutions.
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So, What Do Customers Really Care About Today?
It’s all about SERVICE, not technology:
• Ten years ago, an ASP or SaaS company’s most important differentiator was its technology.
• Today, customers care about:- Constant service availability- Their specific pain/need addressed the way they want- Reliable service onboarding and support- Exceptional user experience
• Your challenge is how to deliver a service – not a technology – to resolve their specific pains and needs
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How Do the Best Cloud Companies Address Evolving Customer Expectations?
A market segment is a classification of potential customers by one or more characteristics, in order to
identify groups of customers, which have similar needs and demand similar products and/or services
concerning the recognized qualities of these products, e.g. functionality, price, design, etc.
Wkipedia
1. Focus sharply on a core segment
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How Do the Best Cloud Companies Address Evolving Customer Expectations?
• You need a segment focus to be able to deliver the
right solution to the right user through the right channel
• You need the right solution to achieve clear competitive differentiation
• Your core segment gives you the beachhead from which you can grow into other segments
1. Focus sharply on a core segment
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How Do the Best Cloud Companies Address Evolving Customer Expectations?
• Create a relationship between customer acquisition, onboarding, support, retention, and upsell.
• Key metrics to focus on include:
2. Optimize distribution economics
CAC: Total cost of acquiring a customer
ASP: Average revenue per period, per customer
BE: The breakeven period for recouping CAC
Churn: How much revenue churns per period by cohort
CLT: Customer life time (inverse of churn)
LTV: Revenue generated over the life of the customer
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How Do the Best Cloud Companies Address Evolving Customer Expectations?
• Segment focus creates differentiation
• Differentiation leads to higher lower CAC and higher ASP
• Focus on user experience leads to lower churn and higher LTV
2. Optimize distribution economics – Leverage your segment focus
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How Do the Best Cloud Companies Address Evolving Customer Expectations?
• Content marketing allows companies to:- Communicate and engage directly with their core
customer- Develop thought leadership that speaks to those
customers’ common pain - Efficiently and inexpensively create brand awareness
• It also creates a forum for long-term engagement with current customers, allowing companies to provide better service and improve retention.
3. Leverage content marketing to lower customer acquisition costs
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How Do the Best Cloud Companies Address Evolving Customer Expectations?
• It’s not effective or efficient to cast a wide net and try to reel in every possible customer you can catch
• Your goal should be to execute sales and marketing strategies that speak directly to your core segment – and no one else.
4. Executing sales and marketing strategies around thecore segment