Preparing to monetise your IoT service: What needs to be done from here?
What if you want to get into the IoT game but do not have a connected device in-mind? What if you already have a great device and now it is time to leverage that all-important recurring revenue?
With all of the data and ecosystems that the IoT revolution is already beginning to spawn, it is smart to take a look at how to monetize your IoT service as soon as possible.
The inherent problem with IoT services is that most R&D groups can devise fantastic ways to leverage the power of connection but fall-short when it comes to monetization models. Here are four ways to monetise IoT without purchasing a single Raspberry Pi.
Creating an IoT ecosystem, a marketplace where users engage with your service, requires actual engagement. The most valuable part of an IoT product is not the product…it is the service. The service is what grows in response to your user’s preferences and turns a great product into an intuitive, can’t-live-without money-maker. But before you can get there, you need engagement – which means that your users are looking at you to start the conversation. Not sure where to begin? Here are a few ice-breakers to get your conversation juices flowing:
- Do you need to change your pricing structure and can you do it quickly? If so, let your customers know that you heard their cries and have responded.
- Are you prepared to handle several different use cases? Your ecosystem is comprised of many moving parts; which of those parts wants to renew their service or is ready for an upsell? Who needs to know that you are ready to offer a less expensive option that keeps their core functions intact?
- Are you building a relationship? Consider how your user views your service – it is a tool that grows in-response to their inputs and is continually endeavoring to make their life easier- the way you offer that service should match this approach.
Resist the urge to limit your partnership options to a handful of compensation models. Placing a cap on the amount of trade you can make only limits your ability to capture new partners and ultimately hinders your revenue growth. Instead of forcing potential business partners into an account-based relationship, approach each potential deal ready to embrace an agile and flexible partnership.
Do you already have a great product but are lacking the connected aspect? Perhaps don’t know how to monetize your equipment in a way that capitalizes on the demand for “as-a-service” models. The Internet of Things is changing the way businesses compete and much of it is based on service-models.
Adding a connectivity element (such as a sensor to monitor usage) to your existing product allows the business to reframe that product as a service. Offer to charge your customers by their use of the product instead of buying it outright.
Such business models often come with service and maintenance agreements that simplify upgrades and reduce downtime. The best part is that it keeps the line of communication between you and your customers open – making it much more difficult for your competitors to gain entrance.
What if you are struggling to get your product or service into the hands of consumers? While the costs associated with the manufacture of devices and the development of supporting software have come down in recent years, product price remains a barrier in many B2C businesses. If you find yourself in this boat, consider offloading your products using subscription billing with a business partner.
Companies like the UK-based Gymtrack, have a created a wonderful product that their user-group cannot wait to get their hands on – only they can’t afford it. So instead of going back to the drawing board to find out how they can whittle down costs of their connected weightlifting and fitness equipment, the company partnered with local gyms to make use of their equipment an add-on to gym member’s existing plans. It’s a win-win for everyone involved!
The connected revolution is impacting every aspect of business and perhaps the most significant change will be in the move to “everything-as-a-service.” Prepare your business offerings now to capitalize on this change and ensure that you are leading your industry.
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