Expanding yourBusiness throughNew Revenue SourcesHarvesting the Benefits of Disruptive Monetization

SAP White Paper

INTRODUCTION

In today’s economy:

Traditional silos have fallen.

The customer-supplier relationship has changed significantly.

Innovation is no longer just about technology, but about innovating how you do business.

INTRODUCTION

Q: What can a company do?

A: Disruptive Monetization!

WHAT IS DISRUPTIVE MONETIZATION?

Disruptive monetization is the continuous and consistent process of identifying and accessing innovative revenue sources throughout the customer journey, that can help attract, cultivate, and retain customers to boost profits, and remain in the black.

DISRUPTIVE MONETIZATION IS THE “NEW BLACK”.

DISRUPTIVE MONETIZATION PRINCIPLES / 1

Disruptive Beats Tradition Connect consumers with the

brand, and make the brand available on any touchpoint, channel or device.

Redefine yourself beyond your industry category.

Contextual Beats Generic Collect data to individualize your

product or service. Explicit data Implicit data

Use the data to: Focus marketing Target and convert customers Personalize engagement Identify potential customers

DISRUPTIVE MONETIZATION PRINCIPLES / 2

Innovation Beats Inertia 41% of B2B companies

compete against their own wholesalers, distributors, and suppliers.

Innovation is NECESSARY to avoid commoditization and obscurity.

The cost of innovation is decreasing.

Innovation is not a single project, but a way of doing business.

Value Beats Revenue Traditional business focuses

on sales through revenue. Disruptive business recognizes

the customer “journey.” The perception of “value”

carries more influence than a single transaction.

Data Beats Guesswork Use real-time data to:

Verify the results of monetization strategies

Make strategic adjustments

DISRUPTIVE MONETIZATION PRINCIPLES / 3

Consistency Beats Singularity Customers expect a consistent

experience. Consistency is the centerpiece

of the personalized, omni-channel journey.

Ensure the placement of content, capabilities, and offers across ALL channels.

Continuous Beats Occasional The customer relationship

is a perpetual stream, not just a transaction.

Every activity within the commerce relationship is part of the journey.

Data is the lifeblood. You cannot improve what you cannot measure.

CREATING NEW REVENUE / 1

You-as-a-ServiceA business selling hard goods can transform them into a service.

AGRICULTURAL MANUFACTURING EXAMPLE

A company selling tractors or agricultural equipment, creates new revenue by offering farm services.

(EXISTING)Tractor Sales (NEW) Farm Services;

maintenance of machines, planting and seed guidance

CREATING NEW REVENUE / 2

Products as ServiceManufacturers can consider giving away products for a greater B2B revenue share.

MEDICAL EXAMPLE

A manufacturer GIVES hospital and x-ray or MRI machine.

Hospital pays to use it Manufacturer offers additional

documents for download, expanding the relationship. (i.e., knee x-ray mapping template)

Downloads are done as needed, and paid per-use, or by subscription as a bundle

Fees for cloud storage of documents.

CREATING NEW REVENUE / 3

Commerce for Digital and Physical ProductsCompanies that sell products can expand digitally without converting completely to a service

ENTERTAINMENT EXAMPLES:

Online customer orders a Play-Station subscription and PS4 controller. They are processed as one transaction, but delivered separately; one by courier, one digitally.

Tablet TV viewer watches a show, and want to purchase a shirt like the character. Offers appear on the tablet during the show, and one-click orders are enabled while the show airs.

SOFTWARE EXAMPLE:

B2B) SAP’s own SAPstore.com (SAP Hana Marketplace), the BlackBerry Enterprise App Store, and Antivirus specialist AVG provide new levels of online service to complement their products and real-world consulting services with free trials, access to demos and the ability to purchase via self-service.

MEDIA EXAMPLE:

A global publisher of niche magazines, such as men’s fashion, wedding, and food, sells the items mentioned in its articles through its own bricks-and-mortar and online stores. They use their content to drive customers to purchase.

HIGH-TECH EXAMPLE:

(B2C) Both Panasonic and Samsung Electronics are vendors that sell through digital storefronts using guided selling. This enables contextual and relevant offers, cross-sells, and dynamic bundling options, in real-time. The customer can create a custom bundle, which is processed and fulfilled by the vendor, who simultaneously deploys continuous commerce to collect, analyze, and extract insights for continuous contextual selling.

CREATING NEW REVENUE / 4

SubscriptionThe subscription model delivers multi-faceted flexibility, including: Different price plans Varying subscription terms Assigned entitlements over multiple periods Variable billing cycle plans

CREATING NEW REVENUE / 5

MEDIA EXAMPLE:

An online newspaper allows customers who don’t want to pay a full subscription to access individual stories, on-demand at a lower price than the subscription.

HIGH-TECH EXAMPLE:

Allowing application download on multiple devices, for a fee.

EntitlementsEntitlement services allow vendors to define which content and services are available to customers on a granular level. Pay-As-You-Go models Easy to manage Can be subscription based, or associated

with a specific product.

CREATING NEW REVENUE / 6

Dynamic Bundling/Service PackagingA collection of services or features, delivered to the customer as a value-add Cellphone features offered in tandem with a subscription Access to a digital download of a single follow-up episode

of a TV series based on the purchase of a DVD or extra footage of the series.

Multiple channel viewing packages like SKY Movies and SKY Sports

CREATING NEW REVENUE / 7

Frictionless CommerceEliminating all barriers to a purchase One-Click purchasing Seamless cart Upgrade accessibility (Freemium to paid, basic to premium) Loyalty and reward programs convert frictionless transactions

to frictionless memberships, with benefits (Example: Starbucks loyalty app)

CREATING NEW REVENUE / 8

Remarketing Remarketing means having the ability to recognize when someone has completed the purchase or abandoned the cart, and then send the appropriate number and type of customized notifications.

CREATING NEW REVENUE / 9

B2B2CBusiness-to-business companies can extend their revenue streams by connecting more directly with the public in a sphere called B2B2C.

DRIVING TOWARD NEW REVENUE

Summary Key Points: The “service” mindset must prevail. Back-end systems must be in place, including:

A product content management system (PCM), with omni-channel capability.

The ability to generate 360-degree data-driven visibility The ability to refine the customer experience on the fly

with business administration tools Front-end systems must be consistent and

responsive. Feedback systems must be present. Entitlements and bundling require flexibility. Make B2B work like B2C. Stay agile. Focus your efforts on the right prospects. Empower your customers to help themselves. Pull, don’t push. Gain real-time insights into customer intent.

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