Test, Try, and Then Do It Again

Recently, I had a week-long tour visiting European clients, prospects, and partners and attended the IoT/M2M conference in London. This gave me a chance to discuss business models and strategies for different industry sectors.  

It turns out that digital service launch initiatives are common to most industries. Here are just a few examples:

1) pay-for content  in the publishing and media sector.  

2) the launch of m2m/IoT initiatives by both telecom operators and technology providers.

3) the launch by ISVs of a cloud SaaS/PaaS version of their traditional licensed-based software.

4) new digital services bundled as part of a utility provider’s offering.

These all represent strategic initiatives sponsored by C-level executives aimed to develop new revenue streams that augment existing top line and bottom line or, in some cases, offset the expected decline in revenues from traditional lines of business. And this is happening in every industry sector imaginable including traditional and new media, telecom, technology, energy and utilities, healthcare, automotive, retail, manufacturing, etc.

Progressive businesses seem to know that new business models need to be tested in their respective markets with different segments to check their business case viability, rate of adoption, and true contribution to the bottom line. So the above-mentioned lines of services are all requiring the ability to test, in an iterative way, new pricing strategies, product bundles, discount structures, thresholding strategies within subscriptions, and other revenue models.

Businesses want to test both usage and consumption models as they vary across different services. For instance, should a customer subscribe to twenty alarms per month or 500MB per month or thirty downloads or streaming events per week, and how should a one-off overage be dealt with? Should the one-off overage trigger an additional charge or service degradation or even termination? Or should the one-off event be ignored until overage becomes a consistent behavior? What if a customer’s recurring payment is delayed? Suspend, terminate, downgrade? These are questions that business unit managers are faced with everyday and they require the flexibility to define the process that best suits their business, their market, and their contingent needs.

All of the above must occur within reasonable time scales. This can be a problem for many businesses as time-to-market requirements are too often not supported by IT departments that are required to modify legacy IT architectures and systems involved in monetizing and provisioning services.  

It’s a fascinating new world where both marketers and customers are looking for optimum models, while IT departments are looking for more agile solutions.

The good news is that Aria’s footprint, flexibility, and configurability can support all of the above, enabling new business cases that were not possible in the past.

Riccardo Vicari

When considering a recurring revenue business, many companies first look to their billing system. They often discover that billing can’t truly support a successful recurring revenue business. To find out the reasons why and what you can do about it, consider downloading the Beyond Billing with Effective Recurring Revenue Management e-Paper and make an educated decision on the future of your recurring revenue offering.

About the Author

Riccardo Vicari
Interested in more posts by Riccardo? Stay tuned for more coming soon to the Aria Blog!

The Forrester Wave: Subscription Billing Platforms, Q4 2015

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