Posted by: Matt Shanahan

Subscriber loyalty is a relative measure.  More is better, and less is worse. To qualify the level of subscriber loyalty, you compare that subscriber’s loyalty metric to all your other subscribers.  And in the B2C world, this is a straightforward process.  Let’s face it an individual only has 24 hours/day of attention that can be devoted to your product.  So it’s fair to compare any metric directly between individuals.

And while metrics can be used to compare individuals, how do you determine the comparable level of loyalty for an organization? In the B2B world where we’re dealing with significant variances in sizes, attention capacity between two organizations can be enormously different which makes comparison of engagement trickier. How do you compare the level of engagement for a large global organization with 2,000 users to a medium-sized locally focused organization with 1,000 users? No longer do we have the built-in apples-to-apples comparison found in the B2C world.

In the B2B environment, metrics need to be normalized to account for the differences in subscribers’ sizes and contracts.  Incorporating firmographic information (e.g., # of employees, revenues) to compare against actual metrics (e.g., subscriber loyalty), lets us take into account organizational capacity, allowing metrics to be scored and normalized and therefore comparable.  This approach lets you determine how much organizational demand you have—essentially, loyalty at the organizational level. 

Getting back to our example, if that large, global company with 2,000 users out of 15,000 employees, it has significantly less demand than the medium company with 1,000 users out of 1,500 employees.  

By overlaying the actuals against the firmographics for the company, we normalize traditional metrics, making them useful in the B2B arena.  This approach let us extend our understanding from “are the individuals within the organization loyal” to “is the organization itself loyal?”

Firmographics, Metrics Firmographics, Metrics

Posted by: Mark Upson

So when and where should you do the deep dive?  Demand Rating™ and Demand Ranking™ offer insights to determine when and where analysis is warranted.

Evaluating the range on Demand Ratings, the difference between the high and low, provides a uniformity measure of subscriber loyalty.  In general, the tighter the range, the more uniform the subscriber loyalty is, and the more uniform the loyalty the less time should be spent comparing subscribers to each other. 

Outliers, however, can throw a wrench into the works by creating a big range and potentially raising unnecessary analysis.  Demand Rankings increase the accuracy of a range by filtering which Demand Ratings should be included.  Within a subscriber segment, the Demand Rating with a rank of 1.0 should be the high, and the Demand Rating with a rank of -1.0 should be the low.  Using these two ratings to create a calibrated range eliminates the outliers that are not representative of the subscriber base in general.  The calibrated range can be assessed on uniformity and the need for further analysis.  

So what do you do with the outliers?  As you can imagine, outliers prove to be an important source of clues to loyalty drivers.  Much like the previously mentioned cluster analysis for high ranking and low ranking subscribers, outliers can be compared to the segment in general to identify additional loyalty drivers.

Demand Ranking extends the power of Demand Ratings.  Whereas Demand Rating gives you a measure of subscriber loyalty, Demand Ranking lets you understand the drivers behind subscriber loyalty. 

Closing out the series on Demand Rating and Rankings it is important to underscore the importance of firmographics.  Firmographics provide the basis for tracking behavior needed in ratings and for segmentation needed by rankings.  In the next blog series, Pete will examine the challenges and strategies to accurate firmographics.

Demand Ranking, Demand Rating, Firmographics, Subscriptions Demand Ranking, Demand Rating, Firmographics, Subscriptions

Posted by: Mark Upson

Last time, we talked about how Demand Ranking is a statistical method for grouping subscribers based on their Demand Ratings, so let’s take a little deeper dive. Because Demand Ranking gives us a new dimension for comparing and understanding subscribers, it can be correlated with all sorts of firmographic and usage attributes to gain new understanding into loyalty drivers.  The visualization of the two dimensions looks something like this where the horizontal axis is the Demand Ranking and the vertical axis is a firmographic or usage attribute:

If loyalty is not correlated to a particular firmographic or usage attribute, the visualization looks similar to this:

If loyalty is correlated to an attribute, the visualization would look more like the following:

When charted against usage attributes such as topic, frequency, denial and license patterns, Demand Ranking can uncover issues and opportunities that can be addressed through account management.  For instance, low ranking groups might not be taking advantage of content used by high ranking groups.  In this case, account management can be leveraged to promote the availability of more relevant content that can boost subscriber loyalty. 

When correlated with firmographic information such as geography, industry and company size, it can spotlight issues and opportunities associated with the product itself.  For instance, a global organization might see a normal distribution of rankings when correlated against license use, but when correlated against geography, might identify a dramatic issue in one particular country that requires product changes.

Utilizing Demand Ranking as a new ordinal for analysis enables specific issues and opportunities to be visualized and acted upon– all the way down to the specific subscriber level.  Training sessions might be put in place for Subscriber A, while license terms might be offered to Subscriber B.  A new sales policy might be put into effect for a specific geography, or content or product sets might be refined.  Best of all, the effectiveness of the efforts can be measured and clearly quantified.

Behavioral Analytics, Demand Ranking, Firmographics, Subscriptions Behavioral Analytics, Demand Ranking, Firmographics, Subscriptions

Posted by: Pete Horadan

So what is knowable?  The health of the recurring-revenue business really revolves around a full understanding of customer demand, so the critical metric needed is a measure of that demand, or a demand rate. There are three, interrelated  components of demand—usage (session data), contract data (terms of the customer relationship) and firmographics (the demographics of an organization.) 

Usage data, in the subscription world, describes what is consumed and happens over time.  It’s not about a single user visit, but about aggregated groups of users on different devices, at different locations.  It’s a highly dynamic longitudinal view of the customer, so logging and measuring it is tricky.

Contract data is the information about the business relationship—what licenses were purchased, when. It includes information regarding the number of users that are licensed, the cost of those licenses and the time period that is covered. 

The final component—firmographics—is what is knowable about your customer.  Information such as the size, growth and location of the company are all included in this realm. Firmographic information come from public sources such as corporate websites, private sources such as Hoovers, and is increasingly available from social networking sites such as LinkedIn. 

Combining these three sources of data is where things get powerful.  Using firmographic data to create segmentation and creating a ratio of actual to contracted usage, a customer demand rating can be established.  As discussed by Matt in his Moving Target series and according to a new Forrester survey, determining a willingness to purchase is becoming a critical key to success for content providers.  With a quantifiable, comparable measure for fulfillment of customer demand organizations can produce an actionable, revenue opportunity for each customer.  But that’s a topic for another entry.

Firmographics, Recurring Revenue Optimization, Subscriptions Firmographics, Recurring Revenue Optimization, Subscriptions