How to Use Spend Estimates

Note: HG Cloud Dynamics spend estimates should only be viewed relative to other spends in the HG Cloud Dynamics dataset. In other words, HG Cloud Dynamics spend estimates should not be compared to actual real-world spends but instead, to other spends in the HG Cloud Dynamics dataset.

As users click through various company reports, users will notice a trend: the companies with the largest digital footprint spend the most. (and vice versa) So how can users put this data into action?

Spend is primarily influenced by 3 signals:

1. Product Traffic
2. Product Adoption
3. Product Cost

For an in-depth explanation of how HG Cloud Dynamics estimates spend users can read more here.

Spend provides the clearest estimate of a company’s online presence. 

Most companies have a qualification process that relies on a company’s size or revenue. The problem with these data points is major opportunities get missed such as large companies with little budget, or a small companies with huge budgets. Users won’t see this through an employee or revenue number.

Now to start leveraging Spend, let’s look at one company: Shopify

According to HG Cloud Dynamics, Shopify spends roughly $5M per month on infrastructure. 

This tells us that Shopify operates a very large digital presence. Shopify is a SaaS eCommerce platform that has been growing at an incredible rate. Both traits support this large spend amount.

The next set of spend data that users may be interested in is the category spend. Category spend unveils the products that any company spends the most on. 

Another look at Shopify reveals that it spends roughly $2M per month on CDN and it’s split amongst 7 providers with Cloudflare owning most of the spend.

If a users is looking to sell Content Delivery services into Shopify, it’s likely more effective to target an incumbent that isn’t Cloudflare. Varnish, NGINX, or Akamai may be more viable options.

Digging deeper, users can see how one of these CDN providers is used by clicking on their logo:

This tells us which applications Shopify runs on Cloudflare. This is an incredible insight users can pull into any sales conversation. 

Spend as a Relative Indicator of Fit

It’s important to look at spend as a relative indicator - relative to other spends in the HG Cloud Dynamics dataset. The quickest way for users to establish their spend basis is to look at the last few customers they signed, and their spend numbers. This will provide a baseline to look for when prospecting.

Using Spend Tier Estimates

As users click through company reports or export Smart Lists or Imported List enrichments to CSV, spend expressed in tiers:

Spend tiers in a Smart List

Spend tiers in a report export

Spend tiers give users a quick way to group accounts with similar magnitudes of spend into the same bucket for further analysis. Spend tiers are designed to help users identify similar accounts and get a rough sense of how a company's spend compares to its peers -- tiers are not intended to convey absolute dollar values.