The Concept of Total Monetization and Why It Matters

I have written several articles about monetization and also several articles about how monetization is changing with AI.

The concept of Total Monetization is a concept that Zuora has introduced and they define it as follows:

Total Monetization refers to a comprehensive strategy aimed at maximizing revenue by leveraging multiple streams and optimizing them in a dynamic, data-driven manner.

The concept is widely adopted by businesses and publishers to meet evolving consumer demands and sustain growth in competitive markets. It is important to recognize that monetization is bigger than any singular pricing model and it encompasses the end-to-end strategy and process for how a business creates value, brings that value to market, and generates and collects revenue from it.

Also, monetization strategies are all living and have the ability to evolve over time. Adopting a customer-centric business model with a set-it-and-forget-it approach isn’t enough. That’s how many businesses ended up where they are now, scrambling to keep subscribers. A business’s monetization strategy needs to be future-proof. Customer demand and the market change over time. Businesses need to stay in tune with both and change how they monetize accordingly. Below are the principles of Total Monetization:

Core Principles

1. Diversification of Revenue Streams: Total monetization involves integrating various revenue sources such as subscriptions, advertising, e-commerce, licensing, events, and more to maximize overall financial potential.
2. Customer-Centric Approach: Businesses focus on understanding consumer needs and preferences to craft personalized pricing models and packages. This approach fosters stronger customer relationships and loyalty.
3. Dynamic Pricing Models: Experimentation with pricing structures like bundling, unbundling, freemium, usage-based models, and more is central to this strategy. These models are tailored to resonate with diverse customer segments.

The Total Monetization concept has been applied by various technology organziations. An example of this is Zoom which has implemented flexible pricihng models powered by AI and modular monetization using monetization platforms with a focus on customer needs.

The question that one might have is what roles does technology play in Total Monetization and what should an organization be thinking about when considering deploying a Total Monetization strategy. The following elements are core to the strategy:

Technology's Role

1. Data Analytics: Advanced analytics help businesses track user behavior and preferences in real time, enabling precise adjustments to monetization strategies.
2. Modular Monetization Platforms: These platforms allow businesses to experiment with different pricing structures without overhauling their systems, ensuring agility and scalability.
3. Customer Data Platforms (CDPs): Behavioral tracking and integration of data enable businesses to deliver personalized offers tailored to individual users' needs. An example of a Customer Data Platform that provides insight to revenue and customer behaviour is 180ops.

And finally, we should ask ourselves, why should we care about Total Monetization and what are the assumed benefits of it.

Benefits

• Maximized lifetime value (LTV) of customers through tailored offerings.
• Increased agility in responding to market changes.
• Enhanced customer satisfaction through personalization.
• Sustained recurring growth by continuously evolving monetization strategies.

Total Monetization is a holistic approach that combines diversification, technology, and customer-centricity to unlock the full financial potential of businesses in rapidly changing markets.

Based on my experience working with software vendors and organizations creating intellectual property (IP), monetization has become one of the key considerations that each organziation has to consider. In my recent presentation at Microsoft Finland about the impact of AI on pricing SaaS solutions, it became evident that the topic is very relevant for ISVs specifically. Monetization has multiple aspects to it, one of them being the impact of AI to monetization models and this has been my favorite topic now for more than a year and I encourage you to read some of these on my blog.

I would love to hear your thoughts whether you or your organization have considered deploying a Total Monetization strategy or elements of it.

Yours,

Dr. Petri I. Salonen

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