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

1. Pricing Innovation for
the Digital Economy
Yield Management and Targeted
Rate Plans
Matthew R Shanahan
SVP, Strategy
Scout Analytics

2. 2
Agenda
● The Cloud’s Impact on Monetization
● Pricing Innovation as a Process
● Yield Management in the Cloud
Maximize Customer Lifetime Value

3. 3
The Cloud Transformed Monetization of Assets
cloud
and mobile
magazines
cds
books
dvds
cars
license
agreement
THE CONSEQUENCES
Ownership  Usage
Fixed  Variable
Continuous  Transient
Value Proposition:
Delivery:
Demand:

4. 4
Usage is the Basis for Revenue
in Digital Subscriptions
Customer VALUE Service Provider
Revenue
Usage
Content Transaction WorkflowUnit of Value

5. 5
Usage Patterns are Transient and VariableCustomer1
Contract
Start
Contract
End
Customer2
Contract
Start
Contract
End

6. 6
Customer Service
Pricing Innovations
Come From Matching Rate Plans to Customer Behavior

7. 7
So How Innovative Can a Provider Be?
● Call Time
● Text Messages
● Cellular Data

8. 8
Which Rate Plan has the Most Opportunity?
Rate Plan MRR Lifetime
Value
Rate Plan
Price
Yield
Rating
Monthly
Volume
Individual $2.1M $1,558 $79 $0.67 117
Family $5.6M $17,921 $262 $1.02 257
Unlimited $4.2M $30,291 $534 $0.21 2,542

9. 9
Customer Service
Measuring Yield Identifies Opportunities
Subscription Revenue
Usage Units
Yield Rating

10. 10
Measuring Yield Provides New Optics
Rate Plan MRR Lifetime
Value
Rate Plan
Price
Yield
Rating
Monthly
Volume
Individual $2.1M $1,558 $79 $0.67 117
Family $5.6M $17,921 $262 $1.02 257
Unlimited $4.2M $30,291 $534 $0.21 2,542

11. 11
Yield Management is the process of
understanding and designing rate plans in
order to maximize revenue or profits from a
customer behavior.
Pricing Innovation as a Process

12. 12
Monitor Over
Time
STEP 5
Define License
Structure to
Match Customer
Behavior
STEP 4
Identify Pricing
Issues
STEP 3
Define
Usage Unit Price
Curves
STEP 2
Yield Management Methodology
Define Usage
Units of Measure
STEP 1
VALUE
Power
Standard
Light
VALUE

13. 13
Usage 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
Desired Relationship
Between Price and Usage
PRICE
USAGE
VOLUME
DISCOUNTS

15. 15
Analyze Existing Subscriptions to Derive Yield Curve
Target Yield
Rating
$10

16. 16
Identifying Pricing Issues
Rate Plan MRR Lifetime
Value
Rate Plan
Price
Yield
Rating
Monthly
Volume
Individual $2.1M $1,558 $79 $0.67 117
Family $5.6M $17,921 $262 $1.02 257
Unlimited $4.2M $30,291 $534 $0.21 2,542
Other Pivots
for Yield
● Demographic
● Firmographic
● Technographic
● Territory
● Channel
● Features

17. 17
Options for Matching Customer Behavior
● Tiering
● Bundling
● Channels
● Availability
100+
Customers
$1.6B
Under Analysis
Increases the
Customer Lifetime
Value
10-15%

18. 18
Monitor Over
Time
STEP 5
Define License
Structure to
Match Customer
Behavior
STEP 4
Identify Pricing
Issues
STEP 3
Define
Usage Unit Price
Curves
STEP 2
Yield Management Methodology
Define Usage
Units of Measure
STEP 1
VALUE
Power
Standard
Light
VALUE

19. Questions?
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