Monetization Operations are the operational activities required to support a billing system. These are almost always functions within the core billing system, but may be supported or augmented by external systems as well.
Billing activities have a sizeable customer-facing component that can impact a business’s credibility and reputation if erroneous data is sent to end customers. It is imperative to run tests and confirm that the operations will run smoothly and as expected when systems create invoices or distribute any other customer communication.
These processes may be automated or manual depending on the system, but many times there are processes in place for balancing the percentage of customers that will be invoiced at any given time to minimize the customer impact of errors and the workload on the resources managing the process.
Monetization Operations Components
New Product Introduction
When companies in complex, multi-channel negotiated selling environments introduce a new product or service, many tasks must be completed before it can be made available. With most companies, the product, operations, and IT teams work together to prepare a new product introduction.
For a business to have consistent products or services across all selling channels, their product catalogs must have close synchronization. Companies should consider tailoring the opportunities for bundling, upselling, and cross-selling specifically to the channel in which the product will be offered. It is essential for companies to have robust selling strategies put in place before the product launch.
Like a symphony conductor, the monetization operations domain needs to have all instruments working in concert to create immediate opportunities for the enterprise to capitalize on its new offerings.
Review Key Metrics
Every company has its distinct lineup of key performance metrics. Most metrics revolve around the universal components of a business, such as the customers, revenue, and profit, and these parameters are high-level indicators of the company’s present growth. Those in monetization operations are charged with identifying and tracking key metrics about the health of the ecosystem and the company in general including its past, present, and future.
Funnel metrics highlight gaps in service and customer experience in the lead to order paradigm, often bringing people, process, or technology issues to the surface in areas such as marketing automation, sales force automation, CPQ, and partner management. Looking at inverse funnel or fallout metrics can provide reciprocal insight into other opportunity areas.
Revenue ratio metrics are also widely used. Average revenue per user and return on advertisement spending reports tell similar stories from different departmental perspectives. There are dozens of revenue ratio formulas in use, and all strive to reveal the revenue benefits of a company’s selling efforts before expenses.
Profit or margin ratio metrics are similar to revenue ratio metrics but add the expense layer to the equation. From a financial perspective, these are the metrics of substance. The ability to determine the net profit per customer by selling channel, marketing campaign, product category, or a host of external demographic information, allows an organization to double-down in areas where it is already successful and seek to optimize its performance in other areas.
Many business metrics discussed are closely monitored by the company organizations that have the most significant ability to affect them. Monetization operations, however, maintains dominion when a change in the people, process, or technology can benefit the enterprise.
New monetization is the ability to take a product or service that has been offered in a legacy fashion and create new pricing constructs that allow for recurring or subscription revenue, and it is a vital element of the ATG Monetization Ecosystem™.
The shift to recurring or subscription revenue has fundamentally altered business models, and it has turned many sales and marketing organizations from hunters to farmers. The days of sell it and forget it have given way to the cultivation of long-term customer lifecycles with more frequent and proactive product and service updates.
New monetization pricing strategies can take many forms including a combination of flat, tiered, or tapered rates. Many companies also offer a free version of their services with limited features, restricted usage, or a trial expiration.
Vendor Management Roadmap
Evaluating vendors’ alignment with the purchasing business’s current and future processes can lead to a vendor management roadmap. This tool may guide business decisions about vendor relationships, a critical part of the Monetization Ecosystem™. Vendors can be classified into four categories, and each group has a specific purpose and relationship lifecycle with the procuring business.
Below are the most common vendor classifications used by organizations today.
These vendors play a major role in the success of a business by providing services to the business but also offering strategically significant value. Strategic vendors are not easily replaced and tend to foster long-term, mutually beneficial relationships.
These vendors are essential to provide products or services, the foundation of your business, to the customer. In contrast to strategic vendors, foundational vendors tend to have only a few years in length and are primarily transactional in nature. Foundational vendors have the potential to become strategic vendors if the relationship strengthens.
These vendors offer specialty products or services that have limited presence in the general marketplace but provide a specific value to the company. Offerings may be seasonal, one-time, or custom products or services that create instant or future return on investment for a company.
These vendors, also known as phase-out vendors, offer products that are available from a substantial number of sources at very competitive price points. A commodity vendor may be a vendor that has a product offering available in multiple distribution channels, such as paper products, office supplies, or any industry standards needed for daily operations.
It is crucial for a business to understand, maintain, and invest in vendor management because of its fundamental role within a company. As a result, companies will be able to wisely select vendors and be better prepared for any changes that may occur within a company or industry.
Vendor Release Management
Once a business has established their vendor management roadmap, it is essential to understand and manage any current, pending, or anticipated vendor releases. Vendor release management is the methodology used by the procuring business to plan, build, schedule, and release a new function, enhancement, or product in a controlled manner.
For example, a software vendor may choose to release a version of their existing platform to enhance or add new functionality or to streamline the user experience. Depending on the timing and objective, the release may have a significant impact on the purchasing business and may influence their vendor management decisions or the overall monetization strategy.
Managing a vendor release is no small task, and like introducing a new product, there is a symphony of components that need to work in harmony for the release to be successful. Information about releases must be well communicated, and releases must be planned to include components such as the design, build, testing, and alignment of all elements across the Monetization Ecosystem™.
Businesses should first analyze their current-state ecosystem and roadmap to determine why a release of a new product or functionality is needed. In some cases, one can make an argument that the current product offering or version meets or exceeds their needs. In such event, the gap analysis would deter a company from introducing a new functionality or product when it is not needed.
Inversely, an individual customer can decide if a new release is necessary for their specific business use cases and opt-in or out of the release altogether based on the current state’s ecosystem analysis.
Best Practices for Vendor Release
Confirm & Communicate
Confirm Release Readiness & Communicate Rollout Plan with confidence. When the new functionality or product has been validated, it will be followed with a specific rollout plan to be executed.
Schedule Releases Around Normal Business Activities to mitigate risk when deploying new functionality or introducing new products as not to disrupt or impede business activities.
Training & Support
Engage in Training & Support Services to enable and prepare customers for the upcoming release. This also includes communicating schedule and establish the proper support services should any questions or issues surface throughout the process.
Standardize Release Methodology and Cadence with customers to help manage expectations with sound, consistent processes.
Release Management Planning Factors
Benefits of Release Management
Challenges of Release Management
A company’s ability to efficiently use their vendor management roadmap and perform vendor releases will significantly impact the capability to scale, and it requires taking the entire symphony of actors, benefits, and challenges into consideration.
Manage Monetization Ecosystem
The ATG Monetization Ecosystem™ provides a comprehensive provides a comprehensive view of the technology components that are relevant to managing customers and revenue. The areas of focus will be unique to each company and will likely include multiple parts of the ecosystem. For example, a company that provides products and services to the consumer market through an e-commerce channel will require a different set of technologies than a business-to-business company that sells to customers via a negotiated-selling model with quotes and rigorous contracts.
Monetization operations can vary depending on the industry, market segment, product or service offering, available technologies, and the overall business objectives. It is essential for a business to understand all potential impacts and changes to the overall ATG Monetization Ecosystem™ to make better strategic decisions that deliver a higher value to customers.