Digitale verlage by Günther Haslbeck / Ovenga Media

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  • 1. Digital Businessmodells for Publishers Gnther Haslbeck 1/2014 Digital Goods, eCommerce, Productstrategy Ideas

2. Produkt A Product is a Bundle of Properties a Customer wants to have/use to help them in a specific problem 3. Produktstrategie Individualisierung von digitalen Produkten Konfiguration individuelles Zusammenstellen eines Produkts aus verschiedenen Bausteinen Hufig mit Preiskalkulation verknpft Expertensystem kann auf Konfigurationsprobleme hinweisen Versionierung individuelle Auswahl der Version eines Produktes entsprechend der maximalen Zahlungsbereitschaft Selbstselektion der Kunden Partitionierung individuelle Auswahl von Teilen eines Gesamtprodukts vor allem bei digitalen Produkten Mass Customization individuelle Anpassung eines Produkts aus verschiedenen Modulen ohne Steigerung der Kosten in der Produktion (Masse und Klasse) 4. Preisbildung Beispiel: Buch ! Preis pro Sachgut. Das Produkt ist vorproduziert. Der Preis hngt am Produkt. ! ! ! Beispiel: Wissensdatenbank (Online-) ! Preis pro Aktivitt Produkt entsteht bei Aktivitt durch den Kunden. Der Preis hngt an dem Kunden 5. Statistik ist ein Teil des Produkts Kleiner Einschub: Bauen Sie ein Produkt, dass Kunden nur nutzen knne wie SIE es mchten. Ansonsten werden Sie nie herausfinden was ihre Kunden machen. Hufig wird ein Produkt erstellt und danach Lichtschranken zur Messung der Nutzung eingebaut. Wieviel Nutzer bzw welches Nutzungsverhalten zeigen wohl die Lichtschranken am Ende der oziellen Gehwege und welche Produktstrategie wrden Sie ableiten? ! Was Sie nicht messen knnen knnen Sie nicht Verbesserung und auch nicht bepreisen. 6. Finding a price ! Price pro Time Price per Amount of Activity, Usage Price per Lifetime Price per Customergroup and more ! Pricing Modells - Fremium - oers core services or features for free, and charges a premium for the more sophisticated components ! - Capacity based: - Product usage is free up to a capacity usage or number of users, beyond which it is chargeable. ! - Feature based: - Customers oered a limited version of a product for free, with certain key features locked. ! - Time based: - A typical free-trial that expires after a fixed period. This oers customers a period of time to experience the full value of the product before they decide to buy. ! - Use Case: - A less common model in which customers can use the oering for free provided they fall under certain specified categories (such as non-commercial use, educational, non-profit, etc.) ! ! - Tiered - tie pricing to some driver of value and usage which can often be seats, modules, data volumes, servers, and many other scale factors ! - Consumption - A popular pricing model that allows customers to manage their costs by managing the quantum (time, bandwith, storage) of product usage ! - Perpetual License - Structured as a one-time upfront payment with an additional recurring fee formaintenance and supportplus professional services 7. Key Metrics for Subscription Businesses ! MRR - Monthly Recurring Revenue - Normalizes annual charges - Focus on repeatable business - The best predictor of next month is this month. - Changes in MRR indicators of health ! ! 8. Key Metrics for Subscription Businesses Churn (Abwanderungsquote) ! Churn (% customers lost per time period) drives customer lifetime and customer lifetime value Beware of averages timing of churn impacts revenues ! Churn is the direct opposite of growth ! Limits growth cant add new customers fast enough to account for losses ! Satisfaction index ! Variations Customer churn - Single product companies - All customers similar Subscription churn (i.e., product level) - Measure product performance Revenue Churn - Accounts for variations in customer size Lumpy customers Aging - Churn of new customers typically much higher than older ones - Successful sales month can increase churn ! Cohort Analysis look at lifetimes of similar customers ! 9. Key Metrics for Subscription Businesses CLV - Customer Livetime Value ! Per customer view of business ! Projects breakeven and profit per customer ! Use to model cash needs ! CLV (Lifetime Margin) (Cost of acquisition) Cost of Acquisition - Marketing Programs and Promotions - Sales (salaries, commissions) - Channels (commissions) ! Contribution Margin - Revenue Costs ! Costs - Cost of Goods - Customer Support - Data Center, Bandwidth - Sales costs (incentives for upgrades, renewals) ! By Product, By Channel ! Places value on customer base ! Highlights impact of 3 levers: - acquisition costs - Revenue/margin - Customer lifetime ! Useful to examine cohorts - Clients from 2010 vs 2012 - Online vs sales team - Gold vs Bronze ! 10. Key Metrics for Subscription Businesses CAC - Customer Acquisition Cost ! The cost to acquire a particular customer. ! The key to determining your level of sales and marketing investment ! Measure because - Use CAC to optimize sales and marketing programs - Highlights unprofitable channels and programs - Measures eciency ! Variations Full cost view - Include all salaries, commissions, program spend etc. ! Incremental costs: - Essentially treat headcount costs as fixed ! Marketing Program - Only consider external marketing program costs 11. Think about 1) What is the Customers Value of the Product? ! There are several sources of value that a customer can derive from a product ! ROI for Customer: - time saving - increased revenue - reduced errors - resource or cost saving - eciency gains PLUS Exogenous Factors - customers price sensivity - attribute tradeos - network eects = Establish a demonstrable ROI Value for the customer to set the price ceiling 12. Think about 2) Is the Customer Aware of this Value? ! Understand if the customers perceived value is less than the oering that the firm has calculated ! In case of new products without available substitutes, customers might need time to understand the value, and may initially not be willing to pay the true value as determined in step 01 ! Customers perceived value is < then that arrived in Step 1: Fremium model or a low introduction price model > then that arrived at in Step 1: Reset price ceiling to this higher perceived value Consider oering a Tiered model 13. Think about 3) Can the Customer Base be Segmented? ! Look for opportunities to segment the customer base to see if dierent values can be separated from each other ! Common Segmentation Criterias - Using fewer or more product modules - - if yes: Tiered Pricing ! - More number of items are being processed - - if yes: Consumption or Freemium pricing ! - Fewer or more employees are using the product - - if yes: Consuption or Tiered Pricing - 14. Think about 4) Is the Customers Demand Variable or Uncertain? ! Variability in demand and other uncertainties (or lack of it) can provide indicators for pricing model selection ! Type 1 - Inconsistent demand for product - Requirements on anas-neededbasis - Lack of clarity into future demand > Consumption Pricing model is favorable as it will capture this variable demand ! ! Type 2 - Reasonably certain demand for the oering - Clear perceived value in line with actual value of oering > Tiered Pricing model would be ideal if customers are likely to have a long relationship with the company 15. Think about 5) Establish a Floor Price ! Calculating a price floor - the purpose is to determine if the business is economically viable ! IF Cost of Customer Acquisition IS < Value derived from the customer in terms of payment In that case: optimal decision would be to not produce ! > Gross margin earned form customer in Year 1 Invest in consumer acquisition for rapid scale up ! 16. Think about 6) What Value Metrics are Most Important to the Customer ! The final important consideration to make is the value metrics that are important to the customer With any of the pricing strategies, as the customer grows which metrics will increase? These metrics could be - Capacity - Usage - Users - A specific time period - Access to certain features - Specific customer segments, etc. ! Having an understanding of these features will allow the firm to create value through the pricing strategy by setting proper thresholds between pricing tiers 17. About me Want to know more about me / Gnther Haslbeck : ! ! !