In the digital economy, products and services can become commoditized or obsolete almost as fast as they are introduced. Because what’s hot one day often is not the next, it’s important that businesses anticipate, recognize and respond to the dynamics of their customers — which makes it critical to develop personalized relationships that can be monetized.

Communications service providers (CSPs) are a very good example of how businesses can successfully manage people’s changing circumstances and preferences, while keeping a focus on driving up Average Revenue Per User (ARPU) and minimizing churn. In their brutally competitive industry, not only do CSPs have to manage their infrastructure, service location issues, terrible regulatory burdens and complex taxation, but they also have to continually innovate to monetize their networks with an ever-changing product and service catalog.  This means adding new revenue streams, each of which needs to be driven by their rating/metering and billing back-end.

Infonetics Research recently cited broadband operators as a good example of how an industry can go outside of its comfort zone to devise new services and hence new revenue streams. In addition to telephony and high speed data, they are looking at areas such as home automation, home monitoring equipment, and seeking partners, such as wireless and satellite offerings for up-sell and cross-sell opportunities.  All of these activities can only be monetized by rating and metering the usage – something we call Activity-To-Cash™ as opposed to simply Order-To-Cash.

It is through diversity in the type and number of touch points with customers that businesses get sustainability, drastically cut churn and increase ARPU.  These new Dynamic Revenue streams cannot be realized by a simple subscription billing platform or a recurring payment engine.  They must support Activity-To-Cash™.  All major CSPs support Activity-To-Cash™.

So the lesson to be learned by verticals that admire the sophistication of the telecom subscription model is to do two things:

• Trigger the types of usage and activities that create multiple, combined revenue streams for each customer

• Rate, charge and bill for these new Dynamic Revenue streams, anywhere so you actually capture revenue from the activities they trigger.

Whether a SaaS provider, a Cloud company, an online retailer, an app developer or any other type of business, the goal should be the same: know your customer, and more importantly, respect how your customers’ activities will inevitably change, and how the world around them will change, thus always opening up new opportunity for monetization – even if it comes through partnerships with other companies that fill in the gaps where you do not have an offering.

To succeed, your business should be based on platforms robust enough to accommodate the Activity-To-Cash™ cycle that allows for rapid change, and real-time rating and charging capable of handling the number and complexity of different events and activities so that appropriate rating, metering and billing can take place.

After all, what is the point of creating services if not to ultimately generate more revenue?

Thankfully, the cloud has opened up Rating and Charging, and Activity-Based Billing components to the entire playing field, as software-as-a-service (SaaS) makes even the most sophisticated of technologies available and usable by all businesses in some form.

Now, companies of all types have the opportunity to dig into “events” and “usage” information and to monetize services by opening customer activity to “measurability.”  They can even go beyond Rating and Charging by accessing a blend of Analytics and Business Intelligence, Connected Device Management and Dashboards to achieve true “Dynamic Revenue Management.”

In his State of the Union Address, President Barack H. Obama Tuesday night made several references to technology innovators and individual entrepreneurs as critical to the country’s future.  At Transverse we work with a lot of entrepreneurs and innovative companies that have unique ideas they are striving to bring to life.  Some of these ideas will grow to be the next big thing, others will languish in obscurity.  With that said, our job is to monetize them.

Innovation is indeed key, but we sleep well at night knowing that we are enabling companies of all sizes to monetize their innovation without the risk and cost of having to build infrastructure or pay expensive maintenance, licensing and integration fees. This is a good time to be an Activity-Based Billing company, capable of helping businesses of all types dig into “event” and “usage” information so that all customer activity becomes “measurable”  for monetization.  It’s not enough to just support Order-To-Cash (you might as well just get a payment gateway), but rather it is critical to support this “Activity-To-Cash” cycle.

The fact we’ve had so much traction the past year shows a growing entrepreneurial spirit, and we hope in 2012 to continue to be an “enabler” to the “next Steve Jobs” as referenced by the President Tuesday night, and to be an enabler to companies that could possibly rise up to be the next Apple.

Regardless of their focus or scope, all businesses have a better chance at innovating if they can concentrate on their core competency while leaving the logistics of how to rate, charge, bill and collect payments for their services to those who already have done decades-worth of work to figure the complexity of not only Rating and Charging, but also Analytics and BI, Connected Device Management and business-friendly Dashboards. They all have to come together to help businesses collect and interpret data pertinent to orders, customers, products, usage, invoices, payments and subscription types.

Each of these components are associated with a complex array of interrelated processes that manage everything from the initial contact with a customer, to the placement of an order, to the provisioning and activation of a service, to the billing and payment, and then “beyond” to the capabilities that keep the customers hooked and that trigger new activities over time – as customers evolve in their circumstances and preferences.

Abstracting that complexity for many businesses is the cloud, as companies can leverage the expertise and infrastructure capable of handling those interrelated processes in a SaaS model. The ability for businesses of all sizes to leverage  a carrier-grade rating engine and sophisticated software architecture means they can be up and running with critical functionality right away (i.e., updating account balances, allowing specific usage allowances, informing customers of entitlements, offering promotions, couponing, etc).

At Transverse, we would like to hear about any questions you may have about billing in a subscription economy, and any queries about what you need to leverage to succeed.

By CEO James Messer

CES is a forum for companies to showcase their innovation. But if companies can’t monetize their innovation, they become irrelevant.  That is why there is no shortage of news from this week’s CES convention around companies focusing on “Dynamic Revenue” – the ability to meter, rate, charge and bill for virtually any type of activity, thus leading to combined and sustainable revenue streams from each customer. It is clear that whether you are competing in the digital world or in the brick-and-mortar landscape, “Activities” are the key to ensuring that your business can generate sustainable revenue – regardless of changes in the markets or people’s preferences and behaviors.

With this in mind, these innovators are embracing their new-found ability to dynamically build different promotions + coupons + sign-up/activity/event fees + bundles + add-ons + incentives + upsells/cross-sells, payment options and other monetizing activities built around Activity-To-Cash.

Simply put, they have found the key to getting more money out of each customer by using the tools and features of Dynamic Revenue and making a nearly infinite number of “price levers” available.  Enterprises of all types – whether established or greenfield – are able to create innovative and compelling subscriptions with personalized usage components, each tailored to the the desires of their customer base.

TRACT was built to exploit this mission-critical Activity-To-Cash cycle necessary to cultivate and expand your relationship with customers by increasing their propensity to engage in more and more activities over time.  It is more than just a recurring payment engine or subscription billing service, it is true Dynamic Revenue Management.

By Susana Schwartz, Director of Communications

I read with interest an article in the E-Commerce Times today—particularly the author’s opinion that “sustainability” is hard for a business to attain if “human nature” isn’t taken into account. If rigid “markers” are set to represent creatures as dynamic as humans, then new and innovative business models will not be possible.

Though I agree with his contention, Mr. Pombriant misses the boat in terms of the companies he names as examples as subscription billers capable of bringing companies into more sustainable business models.

Zuora, for example, does not provide the real-time rating and analytics, nor the tools and features necessary to convert customer activity – an ever changing thing – into cash and sustainable business models that constantly monetize and trigger existing and new activities: the key to “Sustainability” and something we at Transverse know as “Dynamic Revenue.”

Success depends on the ability to meter, rate, charge and bill for virtually any type of activity. To do so requires the expertise and technology to break down “activities” into measurable components that can be rated/metered and charged. Companies like Zuora and Aria do not have the background to do cost-effective Usage-Aware Charging, Activity Management or Entitlements — all of which a company like Transverse has innately in its SaaS environment.

You need real-time capabilities such as Entitlements to verify and authenticate individual subscribers. If you cannot determine in real time if and how subscribers can execute activities and access content, products or services, then you cannot accurately rate and charge subscribers based on those activities.

You also need a platform capable of giving you an infinite number of “price levers,” created through combinations of limits and usage, and shaped by subscriptions, promotions, coupons, discounts, bundles, add-ons, and incentives.

Only Transverse makes that all affordable through a SaaS environment, as Pombriant is right in that Oracle and other monoliths are no longer desirable by the bulk of SMBs.

We walk the walk. Check us out and request a demo a demo@gotransverse.com.

Think about it. If you had the power to monetize every download, every authorization, and every transaction, what would that do to your business? And what if, over time, you had the power to trigger additional customer activity – increase loyalty and drive incremental sales?

Where some companies talk about subscription billing or recurring revenues, they tell only half the story, as the key is really “Dynamic Revenue” – described in our blog last week as the ability to create multiple, combined revenue streams from each customer by tailoring goods and services (and pricing and payment options) to their actual usage patterns and preferences.

The more customer touch points you can cultivate around product/service usage and behavior, the less likely it is customers will churn and the more likely it is that they will consider you a trusted provider over a longer period of time. That’s the key to a sustainable business model.

Some vendors out there talk of building subscription + activity-based business models, but they talk as though it’s as easy as setting up a recurring transaction. That is not the case!

To realize the benefits of Dynamic Revenue in the same way Skype, Ft.com, MailChip and  others do, you need “Dynamic Revenue Management,” which comprises four key elements:

• Subscriptions
• Activity Management
• Entitlements
• Personalization

These elements map to what we call the “Order-To-Cash” and “Activity-To-Cash” cycles – the first of which establishes the customer relationship, and the second of which nurtures and expands the customer relationship. The Activity-to-Cash cycle is critical to the sustainable business model, and the processes and functions that support it include:

• Activity Processing
• Entitlements
• Rating (aka Metering) & Charging
• Payment Processing
• Collections

“Activity Processing” enables companies to monitor, collect and validate customer activities. Once collected activities can then be monetized.

“Entitlements” enable companies to build advice-of-charge or balance notification features, into their services. Think of how you feel about your cell phone provider’s ability to inform you instantly of the need for an account top-up, and the way in which that provider authorizes and authenticates who you are as you use services. And think of how that provider tailors bundles and plans to your usage habits.

“Rating & Charging” help companies manage the activities (“events”) in which customers engage, such as rating an event, reversing it, voiding it…or, updating allowances or pending charges.

“Billing & Invoicing” helps companies re-evaluate all activities at billing time, and if needed to re-rate activities, as well as create and distribute the invoice to customers and denote whether activities are invoiced or not. It can even handle “roll-overs” of allowances.

“Payment Processing” enables auto-payment, voucher redemption and balance updates to take place.

And the process of “Collections” enables companies to levy penalties for late payments or suspend services and other actions.

This is just a snapshot of the functionality needed to move beyond simple recurring services that do little to engage customers on an ongoing basis by constantly building on the current relationship.

To learn more, request a demo.