Scenarios leverage business models to evaluate future possibilities. Based on a unit economics analysis, you can investigate strategic scenarios to understand profitability and cash-flow impact. You can make educated trade-offs on resource allocation within your SaaS business. By integrating your existing customer data into Scenario Planning , you can analyze how the lifetime value of your customer cohorts develops over time. Software license companies moving to SaaS can find targeted segments with significantly higher retention and lifetime values. SaaS companies can understand the impact of churn, downgrades/contractions, and upgrades/expansions.
Insights on Scenario Planning:
Pricing in today’s software industry has become complex. Customers pay one-off licenses for products, and pay maintenance fees for support and modules. They have contracts with various sales organizations, and benefit from different discounts and rebate levels for the same products. To take their customers with them into the cloud, software companies have to understand these complexities, as well as the lifetime value/annualized revenue of their customers. They must then offer customers product bundles that will yield similar or better total income.
Service and Benefits:
Based on our Scenario Planning models, we create instant reasonable baseline scenarios and projections. You can experiment with multiple variations of a business case, all within an easy-to-use tool that incorporates the SaaS industry’s best practices.
SaaS companies can quickly create what-if scenarios by varying the underlying economic assumptions, assessing the impact of eventual strategic moves in real time. You can also foresee future developments by looking at past data through a what-if tool that returns possible outcomes though an advanced algorithm. Your management team can then focus better on developing the business, while knowing what to expect.
- What is the impact of migrating your customers to yearly contracts from monthly contracts?
- How do your revenues and profits change implementing initiatives to reduce churn 10%?
- What is the impact of lowering prices 20% and increasing new business by 10%?
- How will adding a viral component to your SaaS product impact your revenues?
Software license companies can employ analytical mapping, which maps the existing software products onto appropriate SaaS service bundles. By integrating your historic data as well as your forecasts, you can analyze the impact on your customer lifetime values and plot a meaningful go-to-SaaS transition for each customer. The analytical mapping applies straightforward rules for the product mapping and the customer transition along the timeline.
By leveraging our in-memory database models, we can process raw customer purchase history data to discover insights into your business. We utilize cohort analyses to calculate and compare customer lifetime values (CLTV), average revenue per user (ARPU), and retention trends through customer life and across different customer segments. We explore different product segmentation approaches for the cohort analysis comparisons. From this, we can find targeted segments with the highest retention rates and lifetime values to your business.
With the information on these optimized product segmentations, we then create corresponding product bundles. We facilitate quick and easy mapping of historical product SKUs onto streamlined SaaS product pricing tiers. This lets you simplify customer product choice, increase CLTV & ARPU, and increase customer retention through bundled product offerings. As a result, you can move to SaaS in the way that is most attractive to your customers.