In the past, dreams of wealth and glory used to involve winning the pools or writing a bestseller. In today’s digital age, the thought of developing a highly successful app or online service and becoming a billionaire on the proceeds is an equally attractive alternative.
Except for some in the industry, developing a brilliant idea and launching it to a receptive market is the easy part. As with everything online – the problem is how to monetise this innovation, make it easy for followers to part with their cash – or at least their credit card number - and then keep them hooked so they keep on paying.
Compared to having that light bulb moment and working day and night to make it work, this can sound boring. But without it, all that effort will be meaningless. Even if the app or service is free initially to attract interest, there comes a time when most people will need to receive some reward for their dedication.
So, it’s imperative to carefully consider the wheels behind the business model. How will the service be priced, will it be a simple subscription, a freemium model, or perhaps pay-per-use? And will customers be offered a choice of payment methods and discount schemes? The main challenge here is that no-one can be sure what will work until they try.
Then there’s the issue of competition. If the concept is any good, there will be imitators. Then the issue is trying to keep customers loyal even if someone is offering a similar service elsewhere. This might only be possible by adding extra value – different features and bundles of benefits.
In other words, service providers need to think on their feet and constantly be coming up with fresh and compelling propositions. But importantly, they also need to have the back office systems in place to make this possible.
Thankfully, cloud technology enables this absolute agility. But it’s vital to choose the right type of cloud system. Cloud billing is very different from ‘cloud-based’ billing which is typically a standard, on-premise billing product hosted somewhere in the cloud and gives none of the flexibility. If a vendor declines your request for a free trial, the system is probably only cloud-hosted.
Cloud billing applications can be implemented without the help of profit-eroding consultants and in a matter of days or weeks at the most. These systems make changes in services or new payment packages quick, easy and inexpensive, giving users the flexibility required and enabling them to get further innovations to market before the competitors catch up.
They also give users the freedom to rapidly try out different product packaging and pricing. This is significant as it takes away most of the overheads of failing. If something doesn’t work, they can accept this and quickly evolve the proposition until it’s right.
It’s about being ready for anything. Most businesses start off small and simple – and with basic billing. But if successful, they might begin to want a more sophisticated and granular pricing model to stay ahead of the competition. Plus of course, they will want to grow. Cloud billing systems can be scaled up or down according to need.
But perhaps the most important benefit is that, because they are fast to implement, cloud billing systems ensure that subscription revenue begins to come in straight away. After all, that billionaire status won’t happen overnight.
This article first appeared in Digital Marketing Magazine.