Work/
A subscription service client
We helped this fast-growing start-up to secure financial investment by forecasting their customer acquisition and future revenue.
This subscription-only start-up needed more investment from venture capitalists and we helped them with robust forecasts that they could present to potential investors.
The client’s existing forecast hadn’t accounted for how their different discounting strategies would impact customer attrition. This meant that they couldn’t show that their business model, and in particular their marketing model, would scale well.
To secure further investment at a competitive price, they needed a robust forecast model to confidently demonstrate that their business model was working – and would continue to do so as the business grew.
Before even touching their data, we analysed the start-up’s business model and its influence on their customer marketing strategy. We discovered that different cohorts of customers that were acquired at different times, had very different patterns of customer retention vs attrition. These patterns were consistent with the various discounting approaches that were used to improve customer acquisition at different points in time.
With this insight, we developed a customer retention model based on monthly customer acquisition. The model was then refined to provide forecasts for customer lifetime value (LTV) at 2, 3 and 5 years after acquisition.
The model fundamentally proved their business was robust, and more importantly sustainable. This helped them secure an additional £1m in investment over their next round of fundraising.
The model was refined as new data was integrated, with successive forecasts becoming more and more accurate. We implemented linear regression modelling into the approach to more accurately forecast how varying levels of marketing spend and discounting would impact customer acquisition.
The model fundamentally proved their business was robust, and more importantly sustainable. This helped them secure an additional £1m in investment over their next round of fundraising.