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Land a big hitter and then expand business within that organisation.... takes time to develop the initial relationship but then..once the door is open...is becomes easier and cheaper to expand one's offering within
" They haven't just built relationships with big hitters, they're extending/ continuing them."
There's a name for it in sales, "cross selling", "up selling" I can't remember - perhaps I'm confusing cross-dressing. lol
But essential it about leveraging business relationships to sell across different products, Loopup have hinted that this will play a part in growth (they've been doing it for a couple of years with MeetingZone - also discussed development of new services and have allotted a bigger budget to software development. All good.
They need some of this : "Marketing leverage" is the ability to control and generate large profit increases from low-cost or no-cost marketing methods
Offering free trails as recently introduced probably qualifies.
" once the POC is underway the client is hooked provided the system works to fulfil their needs. " Indeed. And it works - check out the Clifford Chance renewal in 2019. They haven't just built relationships with big hitters, they're extending/ continuing them.
bigsmoke, yes you are right in respect of most customers wanting a bespoke trail but if we consider the process, once the POC is underway the client is hooked provided the system works to fulfil their needs. However, in big contacts and these are on average 10 times bigger than previous client will want evidence of capability before even going to trail the system.
It's like the old adage "on one ever got sacked for buying Microsoft", it would be great to have Loopup considered in the same way.
Buyers will do due diligence as you say hence the time to convert customers. Examples of successful implementations (Case Studies) are established tools to demonstrate capability, I worked on bids, some large and submissions to get onto framework agreements and on occasion been asked to trawl through completed contracts to find examples of similar Implementations to provide proof of capability in a specific area- else you can't be considered.
Take a look at the link to implementations and Case Studies on the Lookup website, having a batch of significant large scale Cloud Comms implementations can't do any harm in reeling customers in when they look at the website.
I took a look at a competitor website a few weeks ago and they had a rolling list of big name client including Hitachi - it always impresses - household names like that must carry clout
Digging a bit deeper if interested the writeup on the German Savings Banks Association (Deutscher Sparkassen- und Giroverband – DSGV) encapsulates how it all works, but significantly they where an existing customer transitioned from Meeting Zone (though the company did not advise this in the November update), they said:
"We generally expect sales cycles to be approximately 6-8 months, but encouragingly we have already been selected by a leading private banking group to provide their global cloud telephony, subject to a successful 3-month proof of concept which starts next month"
I suspect this is one of the contracts not yet advised, this is a big organisation and the company said could become one of their biggest clients (surely can't be one of the 3). What is interesting is that an existing client confirms they like the service and so trust Loopup to implement at speed for them. This sort of customer must expose the product to a much wider audience of potential new clients.
JTD - "...if the clients do indeed sign up then surely that provides proof of the business concept to us as well as new potential clients..." true. But I think they use POC in a customised sense i.e. the client wants to see it work in situ, not see it work per se.
Q2 update (May) ought to be revealling. I agree. Also, given the full licenced international services are expected 2021. So a progress up date by close of H1, should show if we are on target there. As another poster has pointed out, that itself, ought to open up material tangential revenue streams.
£5m net rev growth Q/Q would be excellent.
"I'm really optimistic we're on a winner here" - agreed,
Thanks Bigsmoke, doesn't look like anyone disagrees.
I am going somewhere with this, first we've established the contracts are relatively small compared to the pipeline average so some much bigger fish to catch and critically they are "New Clients" so I presume the pipeline does not simple comprise a list of existing client discussing transfer - they are as far as it is possible to tell genuine leads which will add to revenue.
The next batch of potential clients are much bigger and perhaps bigger clients are more cautious. Though we appear to have a conversion rate as of Q1 of only 1% ish (there is no information on existing customers transfers) but by the time we get to the end of Q2 it may be around 7% run rate of converted business and a new batch of proof of concept (POC) clients progressed.
The above looks good to me and if the clients do indeed sign up then surely that provides proof of the business concept to us as well as new potential clients.
So by the time we get the Q2 update we'll have a pattern that should allow projections for Q3 and even Q4 - if all (near all) clients entering POC arrangements sign up then it's fair to assume similar in subsequent quarters.
Once we have a decent pattern/trend for the rate of contract opportunity growth and rate of conversion we can have a good stab at working out the scale of opportunity here and the management can stop telling us they can't foresee how the year will pan out.
IMO they should be signing up at least £5m (preferably much higher) of new business/quarter - bear in mind only 1/3 of it occurs in first year as the average contract is 3 years (explains why turnover will not soar this year - until the amazing power of compounding (Warren Buffett gem) kicks in in late 2021- I believe as long as there is slight growth in each Q it will not disappoint shareholders.
IMO the BoD are missing a trick here, they need to develop some KPI's/ performance metrics to communicate their successes with more clarity and consistency between RNS's, that will build shareholder confidence that it is not all just blue sky thinking and there's a plan- I'm really optimistic we're on a winner here, the company have in truth been very lucky to be in the right place at the right time now all they need to do is the easy bit and make it count.
The company made a statement about the three notable contracts they have won in the last Q, they said:
"New customer wins: 3 with minimum Total Contract Value ("TCV") of £620,000, plus notification of a further RFP win although not yet formally contracted"
Is that TCV of £620,000 for all 3 or just the smallest. I read it as total for 3 which makes them less than average value of £360, 000/ lead in the pipeline.
It is a little ambiguous IMO.
The statement about the other 6 in trail period is explicitly stated as £5m - much larger TCV/client - " we now have 6 live Proofs of Concept ("POC") with customers whose intent is to move ahead with LoopUp but first wish to test the capability in their own environment. A POC period is typically 1-3 months. The potential TCV of these live POCs is approximately £5 million."