Monetization Operations

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.

Because billing activities have a large customer-facing component, credibility and reputation can be impacted 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 invoices are created or any other customer communication or collateral is sent to an end-customer.

Monetization Operations

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 invoice 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, there is a slew of tasks that need to be completed before it can be made available. With most companies, the product and operations teams work together to ready a new item.

From an operational standpoint, configuring the product or service to have consistency across all selling channels requires close synchronization of all product catalogs. Bundling, up-sell, and cross-sell opportunities should be tailored to the channel in which the product will be offered, and solid selling strategies in place prior to product launch.

Like a symphony conductor, the monetization operations domain needs to have all ‘instruments’ firing in concert to create immediate opportunities for the enterprise to capitalize on its new offerings.

Review Key Metrics

Every company has its own distinct lineup of key performance metrics. Most revolve around the universal carrots in business – customers, revenue, and profit – and are high-level indicators of present growth. Monetization Operations is chartered with identifying and tracking key metrics on the health of the ecosystem and the company in general – past, present, and future.

Funnel metrics highlight gaps in service and customer experience in the lead-to-order paradigm, often bubbling to the surface people, process, or technology issues in areas such as Marketing Automation, Salesforce Automation, CPQ, and Partner Management. Fallout metrics, funnel metric’s inverse, provide the same insight.

Revenue ratio metrics are also widely used in the service provider space. Average Revenue per User (ARPU) and Revenue per Ad Spend (ROAS) 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 the aforementioned 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, and/or a host of external demographic information, allows an organization to ‘double-down’ in areas in which it’s already successful, and seek to optimize its performance in less prolific arenas.

Many business metrics discussed are closely monitored by the company organizations that have the greatest ability to affect them. Monetization Operations, however, maintains dominion when a change in the people, process, or technology can benefit the enterprise.

New Monetization

New Monetization is an important element of the monetization ecosystem.

It 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. This fundamental shift in how service companies go to market has altered business models foundationally, turning many sales and marketing organizations from hunters to farmers. The days of ‘sell it and forget it’ have given way to cultivation of long-term customer lifecycles with more frequent and proactive product and service updates.

The best product and service monetization transitions are those that are beneficial to both the provider and the customer. A company’s ability to clearly communicate the value proposition to its users will realize the biggest benefits.

New monetization pricing strategies can take many forms, most some iteration or combination of flat, tiered, or tapered rates. Many companies also offer a free version of their services, with restrictions based on features, usage, or trial expiration.

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People | Process | Technology

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