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Managing Yield Across Your License Structure

This is the third research alert in a series on pricing. One alert examined why metering access maximizes revenue. The other examined ways in which metering could be effectively applied through tiering at the user level. This research alert examines how to benchmark and manage yield across your license structure, and specifically with site licenses that blend users and discounting. Site licenses give customers unlimited use of a service while paying a flat, discounted price. The customer motivation to buy site licenses is that it makes purchasing decisions easier than trying to determine which users need which licenses. Another customer motivation for site licenses is that it makes on-going administration easier than trying to manage users and license allocations. For [...]

Why Metered Pricing Models Maximize Revenue

Maximizing revenue from digital subscriptions is dependent on monetizing usage rather than the users themselves. Comparing print subscriptions to digital subscriptions highlights why usage behavior is the basis of revenue, and applying the principles of yield management shows why metered pricing models produce the most revenue. Why Usage? Comparing Print vs. Digital Subscriptions Based on the fact that print is a physically distributed product and digital is an on-demand service, print subscriptions differ from digital subscriptions in three critical ways: Fixed vs. Variable Content Delivery. The print product has a fixed definition of content delivery which is received by every customer that purchases a subscription. A digital service has a variable definition of content delivery because usage varies across customers. [...]

How to Measure and Evaluate the Efficiency of Your Pricing

Segmentation in all pricing helps companies develop targeted plans for different groups of customers. Segmentation can be based on demographics, firmographics, or behavior. From Scout® Research’s benchmarking, demographic and firmographic segmentations consistently underperform behavioral segmentation in yielding the maximum revenue. How much opportunity exists to increase revenue from behavioral segmentation? The following infographic illustrates how to measure and evaluate the efficiency of your pricing. The infographic analyzes the efficiency of pricing for an online market research service where pricing is based on user roles, for which one specific role is defined to be $100/user/month. The service has 20,000 of these specific users which generates $2,000,000 of revenue per month. As with every service, users have different behavioral patterns that can [...]

The Faulty Comparison of “Analog Dollars” to “Digital Dimes”

This post originally was written for and appeared in adexchanger.com. The comparison of “analog dollars” to “digital dimes” is often an attempt to explain that paltry digital revenue is coming from commoditized advertising prices. When you dig deeper into rate cards, the reality is quite the opposite – digital rates are more expensive than print! The digital dimes issue does not stem from pricing but from size and quality of audience. Here some math to explain. I reviewed individual media kits from 10 B2B publishers that contained both print and digital advertising units to get apples to apples comparison of print vs. digital within one publisher. A consistent theme emerged – digital advertising rates were higher than print advertising rates. [...]