Getting the Most Success for Your Buck: Monetization Strategies for IoT
by Exosite, on October 4, 2017
An unrefined business model poses a significant risk to the success of your connected-product deployment. It’s important to carefully consider the applicable business models to identify one that best suits your product, organization, and target market. As you develop your model, make sure you examine the comprehensive impact to top line revenue, investment and ongoing expenses on the bottom line, and competitive positioning in the marketplace.
The value-added features of connected products lend themselves well to a revenue-generating business model. As a part of this model, you’ll need to consider whether the costs associated with connectivity will be regularly charged to your customer, built into the cost of the hardware, or subsidized by network carriers or insurance companies. If you’ll pass the costs of connectivity on to your customer, ensure the necessary infrastructure, integrations, and workflows are in place to bill customers and collect payment.
If your organization is most interested in the predictive and proactive nature of connected products, you may benefit from the expense-reducing business model. Under this model, you need a realistic and proven plan to ensure the expense reductions associated with the connected product will offset the costs associated with its development and deployment.
A business model where connectivity is offered free of charge works well if you plan to use the collected data for internal purposes. This model allows you to offset the costs by leveraging your IoT solution to enhance differentiation from competitors, streamline customer service processes, or gain insight into customer usage and product performance.
In addition to the primary IoT business model categories discussed above, there are many others to consider, including hybrid models, subsidy models, pre-paid models, advertising models, and more.
If you’d like more examples on monetization strategies for your connected products, you may like a free copy of our Monetization Strategies for Connected Products white paper or to watch our panel webinar IoT - Money Talks.
To learn more about how to make sure you’re prepared to launch and support your connected product, download our full IoT Readiness guide.