The internet of things provides businesses with an incredible opportunity when it comes to analyzing customer data. With the right technological infrastructures, businesses can now capture customer usage data at levels previously unimaginable, helping to inform new market strategies and product innovation.
While being able to collect immense quantities of customer data is proven to help companies facilitate the buyer journey and improve customer experiences, it shouldn’t stop there. Instead, companies should find ways to monetize it as well.
Customer data is among — if not the most — important asset of any enterprise. The best customers will be identified by data; the customer experience will be enhanced by data; and new products and services will be developed based on data.
That probably explains why industry analysts have labeled enterprise data everything from “the new cash cow” to “the new gold rush.” IoT companies, in particular, are constantly under pressure to turn usage data into new sources of revenue, and that pressure is only poised to intensify in the years ahead.
But how do businesses transition from simply collecting data to monetizing it too?
It starts by looking at usage trends. With usage trends, businesses can identify the best customers to target for cross-selling of additional products or services. They can additionally predict, with a high degree of accuracy, which customers are likely to accept an upsell to a higher level of service.
Usage data also can reveal customers with patterns of low usage who may be unsatisfied or who may not be fully utilizing a particular product. By making use of this type of data, companies can reduce customer churn and ultimately improve the average lifetime value of their customers.
In order to fully embrace the value of data at the enterprise level, companies need a data monetization platform that can benefit the entire organization and marry front and back office infrastructures. The system should be able to collect, monitor, measure and record real-time, digital customer activities, such as application usage or consumption of power, data, storage and bandwidth. Businesses also should be able to be easily bill customers based on those activities.
In IoT, this is particularly important. The amount of granular data generated by IoT deployments creates a demand for dynamic billing solutions that can turn connected products directly into profit from the get-go.
As businesses continue to compete on the ability to leverage customer data alone, here are some factors to keep in mind when it comes to deploying a data monetization engine:
- Flexibility and scalability: As customer preferences change, so will the way businesses want to use and monetize their customer data. Having a platform that’s flexible and scalable with fluctuating customer and market demands is key to monetizing changing quantities of customer data.
- Usage preprocessing: As the amount of usable data explodes, it can be easy to overwhelm back-office software systems and bog down servers with data that is not needed to monetize products and services. That’s why monetization platforms should use a usage rating engine to preprocess usage data externally, sending only the relevant data to a company’s system of record.
- Rules-based rating: The usage rating engine should use rules that can be configured easily to control entitlements, services and containers. Being able to leverage a powerful, agile rules-based rating engine enables businesses to streamline billing operations and keep costs under control.
- High-value real-time usage: As stated previously, collecting usage data at a high degree of quality and granular detail is key to success. The right monetization engine will leverage this real-time usage data to automate critical events within a bill cycle — that could include anything from sending upgrade offers to charging for overages.
- Service identifier mapping: The tracking of physical components assigned to or used by a customer is a crucial step to leveraging usage data. Cloud application and infrastructure providers have particularly better visibility into customer usage when multiple device identifiers can be applied to client accounts and used to customize billing.
- Flexible pricing paradigms: Most ERP systems are limited by the pricing paradigms they can support, but a multidimensional data monetization platform has almost unlimited flexibility in packaging and pricing. Building rules logic in a monetization platform should be as easy as creating financial modeling using a formula in a spreadsheet.
- Product bundling: Many systems are limited by the product bundles and packaging strategies they support. This inevitably leads to product catalog creep; sometimes exploding to hundreds of thousands of needless variations created because of system limitations. The right monetization solution should allow businesses to bundle products or services together and create sub-allocations for cost basis. The monetization platform should also be able to manage discounts and pricing tiers, accurately and at scale.
As the internet of things continues to grow and reach new heights, the need to analyze customer data and bill for new products quickly and easily is more important than ever before. To do this, companies should leverage the customer data they’re already gathering — or should be gathering — and implement a flexible, agile and scalable data monetization platform that can support their broader business strategy. Then, they’ll be empowered to turn their customer data directly into an enterprise-level cash cow.
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