Business leaders have big ambitions when it comes to their companies’ digital offerings. According to a new Accenture survey, the majority of executive respondents—60 percent—view digital as an important way to open up new sources of revenue.
Our research finds, however, that almost three out of four organizations (70 percent) report that digital accounts for less than 15 percent of their current revenues. For now, that 15 percent represents a “digital ceiling.”
How to break through the ceiling? The answer is in creating distinctly digital monetization strategies—new ways to turn digital resources into revenue.
Launch a new monetization strategy by recognizing the focus of current digital investments. Continue core-enhancing strategies, reaching new customers and markets with new experiences. Then look beyond the core to identify resources and needs, as well as the mechanisms connecting them.
Breaking through the digital ceiling to achieve sustainable or accretive growth requires new ways of thinking about monetization. A monetization strategy considers digital implications for five key areas:
Customer/market needs: Who would be interested in your offer and why?
Resources: What is on offer?
Value: Why is it relevant?
Mechanism: What are the means used to capture the value of resources to drive revenue?
Company capabilities: What is required to bring the offer to market?
Taken together, the changes digital brings to these five components of the monetization model create opportunities for new revenue streams.
An action-oriented monetization strategy concentrates on developing new combinations of resources, value and mechanisms.
Change the resources involved in your offer to create new markets, products and services. For example, consider the information-intensive products resulting from blending sensors and analytics to create new service platforms. Technologies connecting cars and their sensors across networks enable a range of new services at the margins, from embedding insurance protection to providing streaming media services.
Change the value intensity to generate a premium or induce direct purchasing by creating exclusivity and extending branding. Digital can raise revenues and reduce churn by increasing customer intimacy.
Change the way you generate revenue by reorienting the value chain. Digital technology can change commercial terms and mechanisms, turning product purchases into service subscriptions.
Differentiation through monetization is key. Re-imagine the utility and value of digital resources to create new offerings and reach new customers.
Managing Director—Accenture Strategy
Mark McDonald is a Managing Director in Accenture Strategy concentrating on Digital Business strategy and development. He advises top executives and their teams in the development and execution of digital business strategies defining how technology drives growth and results.