Normal distribution also known as the Bell Curve is the shape data typically takes when charted.
Typically you will see results gathered in the centre with a reduced number of results on either side.
As an analysis tool, we use this to identify where information does not fit the typical or expected distribution.
Objectives and Key Results or OKR’s are a framework for setting and measuring goals.
It is based on setting significant objectives that are aspirational but achievable and most importantly meaningfully.
All objectives must have a key measurable result, often these are set on a scale where 100% would be the ideal outcome however anything above 70% is respectfully and within range.
The scaled approach makes the framework useful when setting organisational or divisional objectives as it is not a binary success or failure scenario that can be de-motivational.
A Net Promotor Score or NPS is how likely a person is to recommend your product or service.
The result can range from -100 to 100 whereby 100 means everyone taking the survey would recommend and -100 is all respondents would recommend against your product or service.
The NPS is calculated based on survey responses with a rating of 0 to 10 (10 being the highest recommendation). Responses of 7 & 8 are excluded as they are seen as being neutral or passive with 9 & 10 seen as promoters and less than 7 seen as detractors. The final number is the net of the percentage of respondents scoring an 8 or 9 less than the percentage of respondents responding less than 7.
Customer acquisition cost (CAC) is a key metric that measures the amount of money a company spends in order to acquire a new customer. This cost can include marketing and advertising expenses, sales team salaries, and other expenses incurred in the process of attracting and converting potential customers into paying ones.
Understanding your CAC is important for several reasons. First, it helps you determine the efficiency of your customer acquisition efforts. If your CAC is high, it may indicate that you are spending too much money to acquire new customers, which could be unsustainable over the long term. On the other hand, if your CAC is low, it could suggest that your customer acquisition efforts are more efficient and effective.
In addition to understanding the efficiency of your customer acquisition efforts, CAC is also important because it can help you determine the overall profitability of your business. By dividing your CAC by the lifetime value (LTV) of a customer, you can calculate your customer acquisition cost ratio (CACR). A low CACR is generally considered desirable, as it means that the LTV of a customer is high relative to the cost of acquiring them.
There are several ways to reduce your CAC, including optimizing your marketing and advertising efforts, improving your sales process, and increasing the efficiency of your sales team. By keeping your CAC low, you can ensure that your business is well-positioned to grow and thrive over the long term.
Customer Lifetime Value (CLV) is a measure of the value a customer will bring to a business over the course of their relationship with the company. It is an important metric for businesses to understand because it helps them allocate resources effectively and make informed decisions about how to best serve their customers.
There are a few key components to calculating CLV:
Average purchase value: The average amount of money a customer spends on each purchase.
Purchase frequency: The number of times a customer makes a purchase in a given period of time.
Customer lifespan: The length of time a customer remains a customer of the business.
By multiplying these three values together, businesses can get a rough estimate of the total value a customer will bring over their lifetime.
There are several benefits to understanding CLV:
It helps businesses make informed decisions about marketing and sales efforts. By understanding which customers are most valuable, businesses can allocate resources more effectively and target their efforts towards retaining and acquiring high-value customers.
It helps businesses understand the long-term value of their customer base. By understanding CLV, businesses can make more informed decisions about investments in customer service, product development, and other areas that can impact customer satisfaction and loyalty.
It helps businesses identify opportunities for upselling and cross-selling. By understanding the purchasing habits and preferences of high-value customers, businesses can develop targeted offers and recommendations that can increase the value of each customer relationship.
Overall, CLV is an important metric for businesses to understand and track, as it can provide valuable insights into the value of their customer relationships and help inform strategic decision-making.
360 Degree Pricing is a comprehensive pricing methodology that examines three critical dimensions to establish optimal pricing for products and services. This triangulated approach ensures pricing decisions are well-informed, sustainable, and competitive by analysing value delivery (top-down), cost structures (bottom-up), and market positioning (side-by-side).
Unlike traditional pricing approaches that may focus on just one dimension, 360 Degree Pricing provides a complete view of the pricing landscape, enabling businesses to make informed decisions that balance profitability, competitiveness, and value creation.
Top-Down Approach (Value-Based)
The top-down dimension focuses on the value delivered to your clients. This approach examines the maximum price clients would be willing to pay based on the benefits, outcomes, and transformation your service provides. Key considerations include:
Quantifiable benefits (cost savings, revenue increases, efficiency gains)
Intangible benefits (reputation enhancement, risk mitigation, strategic advantage)
Client’s return on investment
Competitive advantage provided
Bottom-Up Approach (Cost-Based)
The bottom-up dimension ensures business sustainability by calculating the true cost of service delivery. This includes both direct and indirect costs:
Direct costs: time, materials, travel, immediate project expenses
Indirect costs: methodology development, years of experience, intellectual property creation
Risk compensation (profit margin)
Overhead allocation and business sustainability requirements
Side-by-Side Approach (Competitive Analysis)
The side-by-side dimension provides market context by analysing competitor pricing and market positioning. This includes:
Direct competitor pricing (where available)
Indirect competitor alternatives
Market rate benchmarks
Industry pricing standards
Unique value proposition differentiation
The optimal price sits within the intersection of these three dimensions:
Minimum threshold: Bottom-up cost analysis plus adequate profit margin
Maximum threshold: Top-down value analysis minus sufficient client benefit
Market reality: Side-by-side competitive positioning
Sustainable Profitability: Ensures all costs are covered while maintaining adequate margins for business growth and risk management.
Value Recognition: Helps capture fair compensation for expertise, experience, and intellectual property developed over years.
Competitive Positioning: Provides market intelligence to position services appropriately against alternatives.
Confident Pricing: Removes guesswork and provides solid justification for pricing decisions.
Transparent Value: Clearly demonstrates the relationship between price and value delivered.
Fair Pricing: Ensures pricing reflects genuine value rather than arbitrary markup.
Sustainable Partnerships: Promotes long-term relationships built on mutual benefit rather than unsustainable pricing.
