Understanding what drives growth
Better insights, from better data, leading to competitive advantage.
We believe the way businesses measure themselves, on a day-to-day basis, has a big impact on bottom line results. It stands to reason – making sure you’re looking at the right, best quality data to understand your business, customers and income, allows management teams to focus on the things that add the most value. Ultimately this leads to competitive advantage.
We invest a great deal of time in working with our portfolio companies to get this right. We want to help you create world-class metrics, as well as the processes and systems you need to measure and manage them.
The first thing we consider, with every partner business is the contribution existing and customers make to driving growth.
When considering existing customers the most important metric is Net Revenue Retention (NRR). This is the effect up-selling, cross-selling, price changes, and customer-loss have had on revenue generated. If NRR is greater than 100%, then it tells us that the business is growing, even before selling to any new customers.
ARR = Annualised recurring revenue = The annualised value of customer contracts in place at the end of the period.
When exploring new customer acquisition, however, we look at a series of metrics, including the cost of acquiring a new customer and the expected lifetime value of a new customer.
We’re able to the use the combined findings to influence operational and strategic decision-making, as well as to understand overall business valuation.
Most importantly, being clear on the different elements that contribute to these, and the relative contribution of existing and new customers, can help to influence investment in sales & marketing, improvements in customer retention, up-selling and cross-selling strategies and, most importantly, pricing.
Although all of our portfolio businesses are unique their underlying model characteristics are often similar. Over many years of working with businesses like yours, we’ve gained valuable insight into the many common operational metrics that can help you to understand how you are performing, what drives ambitious growth and how you measure up to similar organisations. That’s why, when it’s appropriate, we’re not afraid to set tailored benchmarks, against industry best practice, to give you real insight into what will drive your business success.