Pricing Innovation for the Digital Economy: Yield Management and Targeted Pricing Plans

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During this webinar, find out how pricing innovation can fuel revenue growth. You'll learn:

-How to measure revenue yield
-Ways to benchmark performance of your pricing plans
-Techniques for packaging pricing plans based on customer behavior
-How to use data to package and price your licenses

By the end of this session, you will be able to evaluate your own pricing strategy to identify how to analyze pricing plan performance, identify opportunities to improve yield, and increase revenue from your existing customer base.

To hear the audio associated with this webinar, please visit our website: http://info.vindicia.com/Archived-Webinars-Pricing-Innovation.html

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Pricing Innovation for the Digital Economy: Yield Management and Targeted Pricing Plans

  1. 1. Pricing Innovation forthe Digital EconomyYield Management and TargetedRate PlansMatthew R ShanahanSVP, StrategyScout Analytics
  2. 2. 2Agenda● The Cloud’s Impact on Monetization● Pricing Innovation as a Process● Yield Management in the CloudMaximize Customer Lifetime Value
  3. 3. 3The Cloud Transformed Monetization of Assetscloudand mobilemagazinescdsbooksdvdscarslicenseagreementTHE CONSEQUENCESOwnership  UsageFixed  VariableContinuous  TransientValue Proposition:Delivery:Demand:
  4. 4. 4Usage is the Basis for Revenuein Digital SubscriptionsCustomer VALUE Service ProviderRevenueUsageContent Transaction WorkflowUnit of Value
  5. 5. 5Usage Patterns are Transient and VariableCustomer1ContractStartContractEndCustomer2ContractStartContractEnd
  6. 6. 6Customer ServicePricing InnovationsCome From Matching Rate Plans to Customer Behavior
  7. 7. 7So How Innovative Can a Provider Be?● Call Time● Text Messages● Cellular Data
  8. 8. 8Which Rate Plan has the Most Opportunity?Rate Plan MRR LifetimeValueRate PlanPriceYieldRatingMonthlyVolumeIndividual $2.1M $1,558 $79 $0.67 117Family $5.6M $17,921 $262 $1.02 257Unlimited $4.2M $30,291 $534 $0.21 2,542
  9. 9. 9Customer ServiceMeasuring Yield Identifies OpportunitiesSubscription RevenueUsage UnitsYield Rating
  10. 10. 10Measuring Yield Provides New OpticsRate Plan MRR LifetimeValueRate PlanPriceYieldRatingMonthlyVolumeIndividual $2.1M $1,558 $79 $0.67 117Family $5.6M $17,921 $262 $1.02 257Unlimited $4.2M $30,291 $534 $0.21 2,542
  11. 11. 11Yield Management is the process ofunderstanding and designing rate plans inorder to maximize revenue or profits from acustomer behavior.Pricing Innovation as a Process
  12. 12. 12Monitor OverTimeSTEP 5Define LicenseStructure toMatch CustomerBehaviorSTEP 4Identify PricingIssuesSTEP 3DefineUsage Unit PriceCurvesSTEP 2Yield Management MethodologyDefine UsageUnits of MeasureSTEP 1VALUEPowerStandardLightVALUE
  13. 13. 13Usage Units of Measure Definition● Types of Units– Content – search results, download pdf, read article, etc.– Transaction – make payment, update customer info, etc.– Workflow – approve expense report, request sales review, etc.● Relative Weights● Mapping to Licenses
  14. 14. 14Desired RelationshipBetween Price and UsagePRICEUSAGEVOLUMEDISCOUNTS
  15. 15. 15Analyze Existing Subscriptions to Derive Yield CurveTarget YieldRating$10
  16. 16. 16Identifying Pricing IssuesRate Plan MRR LifetimeValueRate PlanPriceYieldRatingMonthlyVolumeIndividual $2.1M $1,558 $79 $0.67 117Family $5.6M $17,921 $262 $1.02 257Unlimited $4.2M $30,291 $534 $0.21 2,542Other Pivotsfor Yield● Demographic● Firmographic● Technographic● Territory● Channel● Features
  17. 17. 17Options for Matching Customer Behavior● Tiering● Bundling● Channels● Availability100+Customers$1.6BUnder AnalysisIncreases theCustomer LifetimeValue10-15%
  18. 18. 18Monitor OverTimeSTEP 5Define LicenseStructure toMatch CustomerBehaviorSTEP 4Identify PricingIssuesSTEP 3DefineUsage Unit PriceCurvesSTEP 2Yield Management MethodologyDefine UsageUnits of MeasureSTEP 1VALUEPowerStandardLightVALUE
  19. 19. Questions?Email us:webinar@vindicia.comVisit us:Blog: blog.vindicia.comCommunity: community.vindicia.comTwitter: @VindiciaWebsite: www.vindicia.com

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