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Let me jump in and join the dots, being somewhat informed on the telco and SaaS industry...
"Pay as you go" is pay per minute per participant. It's very lucrative. Think about one audio call at 6ppm for 10 participants, that's £36!!! If one user has 20x calls a month that's an annual ARPU of £8,640. Now times that by 50 active users and that's £432,000. The other advantage of this model, Loop could sell to an organisation and have them agree every employee can be invited to have an account and be trained to use and if they don't use, they don't incur a cost. This internal growth can be called organic growth but be sure it's driven by Loop having access to and training the end users aka land and expand. This approach with conferencing dates back at least 20 years.
Oh and be sure Loop on that ppm typically contracted all their customers for 2-3 years, and often charged a small monthly cost per active user too!
As for rolling contracts, these will likely have happened over recent years when traditional customers started getting itchy feet seeing all-inclusive and IP alternatives, choosing to not terminate the service providing they didn't have to contract.
The conversion to a licence per user model, has been forced by SaaS, where even £50 per person per month all-inclusive is considered expensive. Now take that same organisation, with 50 users, their annual spend has just dropped to £24,000.
Remember Loop are now focusing on Team, with their telco minutes bolted on. Even better, scaling by providing bolted telco minutes for other suppliers of Teams and large global enterprises users of Teams, who buy direct from MSFT.
As for meeting zone, a lot of their business was WebEx, not low value but a Cisco license resale so not very lucrative. Turning those users to the Loop product was never going to happen. I'd really love to hear the exact number of customer they transitioned. Meeting Zone was a mistake and appropriately reflected by the drop from £4, which triggered the second drop because the funds had to pull out.
The new contracts will mostly be Teams + SIP + minutes, not Loops traditional PSTN conferencing product.
Apologies for last post, the submission process somehow removed all the new line characters.
Following on the theme of the las post, hope everyone noticed in the results the statement about the success they've had in transitioning customers from pay as you go, however, it must reach a stage where any lost customers are best gone ( retained without excess investment) , as it costs excessive money and especially focus of staff to convert them.
"The Group also encouraged a material migration from rolling monthly pay-as-you-go contracts to more cost-effective but locked-in committed term contracts. Such committed contracts accounted for 48% of LPC business by the end of the year compared with 13% at the start of the year"
I guess, there'll be a point where "material migration" is complete and they are better just letting the rest wither away naturally in favour of more lucrative business.
This principle is reinforced with the statement on costs to acquire revenue in SaaS market, they say:
"New Customer CAC Ratio (the fully-loaded cost to acquire £1 of new ARR): improvement to £0.84 (FY2019: £1.38; 2020 SaaS benchmark2 of £1.63)"
That is a very impressive improvement of 39% (my calc) and near half of industry average, hopefully that can be maintained as bigger customers should provide economies of scale. The rolling profitability profile should be equally impressive with a payback period of just over 10 months and customers sign up for 3 years and hopefully stay much longer.
Poker: "The new buzz term is "land and expand"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"Never heard that, I like it though, these trendy terms come and go but underlying them is common sense.Your point about big hitters leads us to the type of customer Loopup are now targeting. They bought Meeting Zone for £50m to essentially gain traction and access customers who could be transitioned onto their platform from the lower level services - I have suspected the lost customers have been from that cohort who really are transient customer s and likely pay as you go. No one has been forced to transfer but those that don't have no commitment and the retention level is likely low. Explained the weakness in non Professional services for me - how do you compete with free or super-cheap services and more importantly why bother.So profits from those users has slumped as Zoom and other freebies do the job for them, offset by signups to premium services - 2020 was a highly successful year in term of customer take up as evidenced by the huge increase in customer minutes to over a Billion.IMO that has set the stage for a sales effort focused on the more lucrative/discerning clients, I commented yesterday on the confirmation that the average value of live leads is £360,000, by my calculation 10 times the value of existing client - that is a huge shift in so many respects and leaves the "land and expand" principle looking very pertinent. I ignore all the fretting about the SP (I'm not a seller) and no one ever mentions the drip buying I and others are doing, everything is still to play for.