Many bricks and mortar companies haven’t survived the transition to the digital economy. Huge brands, such as Tower Records and Borders, were done in by the moves to digital music and online books.
It doesn’t have to be that way. Smart traditional companies can make it big by creating digital services, if that company makes all the right moves.
First, you need the product. Some publishers have successfully moved print publications to the Web by getting the product right. The old brand is now represented by a new digital offering that has the depth and the character of the old pub, but adds more frequent updates and social media interactions.
In other cases, the traditional company creates an all new offering so instead of selling a physical product they are selling a service, such as what Apple (News - Alert) did with iTunes.
Other times you are looking for new way to market an existing physical product such as a car dealer offering virtual test drives, auto comparisons, and online financing.
The trick is to make sure the product is right for the new world of digital.
Pricing for digital products is a big departure from bricks and mortar. In media, instead of charging for a full page ad, you may be collecting leads. This pricing model is what is known as Cost Per Desired Outcome (CPDO) according to an Accenture (News - Alert) white paper titled, “The Billion Dollar Challenge: Monetizing the Digital Opportunity”.
Next, you need to master the new world of digital marketing. Instead of direct mail, full page ads, or TV and radio, you need to learn about banners, lead generation through user registration, social media, and viral video.
Product delivery is also utterly changed. In the case of a digital service, the delivery is over the Internet, unless it is a high level service offered over private lines. The delivery has to be swift, and the product performance appealing. This requires a whole new area of expertise and the network and software tools to make it all happen.
Support is another challenge. In the case of a digital service, you are supporting an entirely different kind of product. You need to learn how to successfully support the new technology, and deliver that support in new digital ways.
How you track success (or failure) requires a new approach. Metrics are no longer just sales, warranty claims, and support calls. You need to understand the health of the entire customer experience.
Finally, you have to get all six of the elements right to succeed, as a customer will judge you based on all of them.
TMC (News - Alert) is hosting a webinar “Effective Monetization Strategies for Online Digital Services” on April 24, 2013, with Camille Mendler, principal analyst at Informa, and Brian Pawlus, director, Product Marketing, within the Oracle (News - Alert) Communications Global Business Unit, who focuses on billing, charging and revenue management domains.
The webinar will cover:
- How to effectively price and monetize digital services
- Why existing IT infrastructures are not designed for digital service monetization
- Strategies adopted by leading digital service providers to grow revenue streams in the digital service economy
Edited by Jamie Epstein