McKean Saas Adoption and Evolution Model 2.0
7c92ca90-6e03-4071-8e82-39641a43470e
isee systems, inc.
Stella Architect
1
100
10
Rate_of_New_Customer_Entry
Disenchanted_Clients_Reentering_Market
Rate_of_Adotion
Rate_of_Adotion
New_Market_Identification
Rate_of_New_Market_Entrants
Rate_of_New_Customer_Entry
New_Market_Identification
Rate_of_New_Market_Entrants
Contract_Renewals
New_Sales_Rate
Contract_Renewals
"Non-Renewals"
"Non-Renewals"
Disenchanted_Clients_Reentering_Market
Total_Contract_Revenue
Total_Sales_Revenue
Labor_Spend_Rate
Marketing_Spend_Rate
Product_Maintenance_Spend_Rate
Product_Development_Spend_Rate
SALES_RATE
Total_Sales_Revenue
CONTRACT_RENEWAL_RATE
Total_Contract_Revenue
Labor_Spend_Rate
Marketing_Spend_Rate
Product_Maintenance_Spend_Rate
Product_Development_Spend_Rate
Labor_Force_New_Sales_SPEND
MARKET_SATURATION
Labor_Force_New_Sales_SPEND
Labor_Force_New_Sales_SPEND
Field_Salesforce_Size
Field_Staff_Skill_Level
Field_Staff_Experience
Total_Viable_Contacts_per_Event_from_Viral_Effect
Marketing_Efficacy
Market_Positive_WOM
Viral_Marketing_Volume
Viable_Contacts_from_Viral_Effects_in_Other_Segments
NEW_CLIENTS
Marketing_SPEND
MARKET_SATURATION
MARKET_SATURATION
MARKET_SATURATION
Favorable_Contract_Lengths
Favorable_Contract_Terms
Field_Staff_Efficacy
Field_Staff_Sales_Visits_per_Time
Product_Image
MARKET_SATURATION
NEW_POTENTIAL_ADOPTERS
Product_Image
MACROECONOMIC_FACTORS
NEW_CLIENTS
Rate_of_Adotion
Product_Image
Contract_Terms_Optimal_to_Client
Duration_of_Relationship_with_Representative
SUBSTITUTE_PRODUCT
Relative_Appeal_of_Alternatives
Importance_of_Product_to_Operations_and_Strategy
Contract_Terms_Optimal_to_Client
Relative_Appeal_of_Alternatives
SUBSTITUTE_PRODUCT
IDENTIFIED_POTENTIAL_ADOPTERS_IN_SPECIFIC_MARKET_SEGMENT
Time_Without_Service
NEW_CLIENTS
"POTENTIAL_RE-ADOPTERS"
Product_Image
Field_Salesforce_Size
LABOR_COSTS
PRODUCT_DEVELOPMENT
MARKETING_COSTS
PRODUCT_EXPANSION
Price_Point
Sales_Volume
LABOR_COSTS
MARKETING_COSTS
PRODUCT_DEVELOPMENT
PRODUCT_EXPANSION
Averaged_Value_Adjusted_per_Time_of_Renewal_Contract
Renewal_Volume
Field_Staff_Skill_Level
Field_Staff_Efficacy
Field_Staff_Experience
Field_Staff_Efficacy
Field_Staff_Efficacy
Rate_of_Adotion
Viral_Marketing_Volume
Total_Viable_Contacts_per_Event_from_Viral_Effect
Total_Viable_Contacts_per_Event_from_Viral_Effect
Product_Image
Marketing_SPEND
Marketing_Efficacy
Marketing_Efficacy
Product_Image
Favorable_Contract_Lengths
Rate_of_Adotion
Favorable_Contract_Terms
Rate_of_Adotion
Labor_Force_New_Sales_SPEND
Field_Salesforce_Size
Labor_Force_New_Sales_SPEND
Field_Staff_Skill_Level
Labor_Force_New_Sales_SPEND
Field_Staff_Experience
Viable_Contacts_from_Viral_Effects_in_Other_Segments
Total_Viable_Contacts_per_Event_from_Viral_Effect
Product_Image
Rate_of_Adotion
Field_Salesforce_Size
Field_Staff_Sales_Visits_per_Time
NEW_CLIENTS
Viral_Marketing_Volume
Field_Staff_Sales_Visits_per_Time
Rate_of_Adotion
NEW_CLIENTS
Market_Positive_WOM
Market_Positive_WOM
Product_Image
Product_Image
New_Market_Identification
MACROECONOMIC_FACTORS
Rate_of_New_Market_Entrants
NEW_CLIENTS
MARKET_SATURATION
MARKET_SATURATION
Viable_Contacts_from_Viral_Effects_in_Other_Segments
MARKET_SATURATION
Field_Salesforce_Size
MARKET_SATURATION
Labor_Force_New_Sales_SPEND
MARKET_SATURATION
Marketing_Efficacy
MARKET_SATURATION
Rate_of_Adotion
Time_Without_Service
Disenchanted_Clients_Reentering_Market
"POTENTIAL_RE-ADOPTERS"
Time_Without_Service
IDENTIFIED_POTENTIAL_ADOPTERS_IN_SPECIFIC_MARKET_SEGMENT
Disenchanted_Clients_Reentering_Market
Product_Image
Contract_Renewals
Rate_of_Adotion
New_Sales_Rate
NEW_POTENTIAL_ADOPTERS
Rate_of_New_Customer_Entry
Field_Salesforce_Size
Salesforce_Members_Transitioning_to_Longitudinal_Contract_Managers
Product_Image
Time_Without_Service
Contract_Terms_Optimal_to_Client
"Non-Renewals"
Contract_Terms_Optimal_to_Client
Contract_Renewals
Duration_of_Relationship_with_Representative
Contract_Renewals
SUBSTITUTE_PRODUCT
Contract_Renewals
Relative_Appeal_of_Alternatives
Contract_Renewals
Importance_of_Product_to_Operations_and_Strategy
Contract_Renewals
Relative_Appeal_of_Alternatives
"Non-Renewals"
SUBSTITUTE_PRODUCT
"Non-Renewals"
ONE OF THE FUNDAMENTAL DYAMICS of this model and most adoption-diffusion models is the concept of new potential adopters balanced against a saturation of the market. That is the essence of what is represented here except it is specifically applied to your case
FIELD SALES FORCE AND MARKETING EFFECTS are elaborated on here based on our talk yesterday (hence the greater detail). The SPEND amounts come from the revenue submodule down below. Somthing I was unclear about was the fate of field salespeople and the fact that they would seem to have increasing value with time as new adopters transition to contracted clients. This is also a good guess at the viral phenomena formulation. This also takes into account marketing and WOM effects. These can be further elaborated as well. I did not include a seperate section for PR but would elaborate that within marketing.
MODEL OVERVIEW: This is a hybrid causal loop model superimposed onto some stocks mainly representing adopters/clients and revenue (further below). The upper portion is a more fleshed out portion showing the effects of Field Sales and their target segment as we discussed yesterday. We should develop unique submodules for the other target markets (Single Unit Franchises and Corporation Owned Franchises (??)). We should also give thought to how the segments interact and possibly overlap as those internal feedback loops often are the largest fruit reaped by an SD formulation.
Further down you will see the lifcycle of the adopter as the initial adopter transitions from a 'purchaser' to someone with a managed contract.
There is next a skeletal portion about revenue flow and how this will evolve over time.
Lastly, revenue flow plays into the important issue of ongoing product development and the various scenarios in which new entrants might be a challenge.
NOTE: Because of crowdedness, I have put NEGATIVE causal vectors as BLUE lines as well as the traditional (-) sign which often gets obscured. Also, although it's not standard, I enlarged terms which will likely have greater weight or warrant specific consideration. Academic SD is very parochial about form but I thought this would be okay.
McKean Saas Adoption and Evolution Model 2.0
Note: Italicized variables such as this are aliases of others which are formulated elsewhere. I try to minimize doing this but it often better in terms of following the visual logic.
CONTRACT RENEWALS will play a very critical role in developing this. We discussed few details yesterday but I can forsee that this will require a great deal of thought and elaboration to find the optimal terms to optimize revenue while mitigating other market forces.
SUBSTITUTES AND COMPETITION were something you asked not to worry about yesterday but I'd like to continue building with them in mind since it is likely that at some point it may be a concern and I'd like you to have the ability to play with the possibilty in a model before it becomes a reality. This comes up again in looking at the allocation towards product development.
LABOR_COSTS
SALES_RATE
MARKETING_COSTS
SALES_RATE
PRODUCT_DEVELOPMENT
SALES_RATE
PRODUCT_EXPANSION
SALES_RATE
LABOR_COSTS
CONTRACT_RENEWAL_RATE
MARKETING_COSTS
CONTRACT_RENEWAL_RATE
PRODUCT_DEVELOPMENT
CONTRACT_RENEWAL_RATE
PRODUCT_EXPANSION
CONTRACT_RENEWAL_RATE
Price_Point
SALES_RATE
Sales_Volume
SALES_RATE
Averaged_Value_Adjusted_per_Time_of_Renewal_Contract
CONTRACT_RENEWAL_RATE
Renewal_Volume
CONTRACT_RENEWAL_RATE
THE REVENUE MODULE is a sort of mother ship of the model in that it collects all the revenue from all markets and combines them to allow you to allocate reinvestment in a growing business. We've not yet talked about how this will work but it's pretty intuitive. This basically pulls all the variables and formulations from above and give you projections based on the decisions you make.