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Your client, NimbusSoft, sells into six segments: SMB, Mid-Market, Enterprise, Government, Healthcare, and Education. The exhibit shows segment-level performance: Average Contract Value (ACV, $k) on the x-axis, Operating Margin (%) on the y-axis, and dot size = number of active customers.
The client can only pursue two opportunities next quarter. Analyze the exhibit and identify the top two segments to prioritize, and briefly state the first action you’d take for each (e.g., pricing, packaging, or go-to-market move).
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Your answer:
📋 Solution:
Solving the problem:
1) Eliminate non-contenders by inspection (no math).
- Education: negative margin (≈ −5%) → not an “opportunity” without a turnaround.
- SMB: huge base but very low ACV ($2k) and thin margin (~5%) → tiny profit per customer.
- Government: small base (~180) and low margin (~10%) → unlikely top-2.
→ Real contenders: Healthcare, Enterprise, Mid-Market.
2) Do only the math we need (rough profit pools)
Use Profit ≈ ACV × Customers × Margin (back-of-the-envelope).
- Healthcare: 40k × 600 × 25% ≈ $6.0M profit pool.
- Enterprise: 80k × 200 × 35% ≈ $5.6M.
- Mid-Market: 15k × 1,200 × 20% ≈ $3.6M.
Top 2 opportunities: Healthcare and Enterprise (largest profit pools with healthy margins).
Next steps & further considerations:
- Healthcare — “Vertical pack + price”
- Launch a Healthcare bundle (EHR integrations, compliance, priority support) and raise list by ~10–15% on new/renewing customers.
- Rationale: largest profit pool and scalable base; vertical packaging monetizes willingness to pay without enterprise sales cycles.
- Enterprise — “Land-and-expand + multi-year”
- Shift to multi-year contracts with expansion clauses (seats/modules), tighten discount bands, and arm AEs with security/compliance ROI collateral.
- Rationale: highest margin; increases LTV and locks in expansion on a small but valuable base.
