29 June 2020 / by admin_V

Monetizing tomorrow’s business models today

Monetizing tomorrow’s business models today

Or the concept of Cash to Care in the digital economy.

In order to become more competitive, companies evolve from selling products to proposing customers services. In this shift, the customer relationship is a key factor to success. 

These customer services, marketed as subscription, generate additional revenues. Also, these new consumer habits bring recurring revenues and predictability to the business. 

Throughout the subscription life cycle, the customer relationship is strengthened thanks to complementary and adapted services from the company.

The challenges of monetization

Among decision makers in monetization, 75% believe that launching subscription services is a priority.

Up to now, the transition to digital and subscription sales were not supported by the monetization tools. Companies have been forced to adapt and to increase flexibility in order to monetize their offerings.

Simple subscriptions are no longer enough to make a difference in competitive markets.

Market leaders are adopting differentiating and flexible offerings such as: 

– combination of products (gifts, …)

– usage-based pricing

– implication of complex pricing models 

– evolution of the services throughout the subscription (upgrade/downgrade)

These new offerings provide real value. 

The reasons companies use innovative monetization solutions:

1- To reduce costs: the predictability of the subscription model gives a medium term 360° vision of the business. The planning of all stages of manufacturing, inventory and delivery make it possible to negotiate and organize business with service providers and partners. Risks are greatly reduced.

2- Defining a new pricing model adapted to recurring business is generally not supported by traditional systems. The evolution towards a new market such as BtoC to BtoB may require a complex price modelling strategy.

3- Reinforce and develop a strong customer experience. Throughout the subscription lifecycle, the brand interacts with the customer, proposing offerings adapted to his or hers needs and consumption habits. By strengthening this relationship, the brand can test new innovative offers and refine its strategy.

67% of companies have integrated or plan to integrate a monetization solution for the launch of digital or subscription-based offers. 

MGI Research estimates that the average revenue leakage in a company is 3-5%. This single argument can justify a CFO’s decision to invest in a new billing solution. Modern payment solutions enable customers and business partners to be paid faster, in the currency of their choice, and provide the company’s CFO with greater speed, transparency and lower costs. These are just a few of the many benefits realized for users of these monetization platforms.

The market is embracing these new tools with enthusiasm. The average subscription billing provider increases the number of invoices by 30-50% per year, which confirms this underlying demand. 

Compared to other categories of business applications, providers of monetization platforms tend to have overall growth rates above the industry standard. Clearly, subscription-based commerce and agile monetization are becoming investment priorities.

Progressive organizations recognize that moving to a monetization platform is a process by itself, often beginning with the need for an agile cloud-based solution in a single domain, such as a new quoting tool, an agile billing engine, or a new payment infrastructure. The benefits of these individual systems often exceed expectations.

The key success factors for subscription management are:

– the speed of implementation of the solution across all information systems

– the presence of all mandatory functionalities (e-commerce site, CRM integration, ERP, invoicing, reporting) for the subscription business, complemented by additional functionalities (partner commissioning, collection, logistics, optimization of payment collection)

– strong integration capabilities

From the commitment to the personalization of offerings to invoicing, customer service and support, the monetization of your business is a key element of your success.

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