Commercializing Your Internet of Things (IoT) Offer: Key Questions to Address
In business-to-business (B2B) markets, we are seeing an overabundance of trend setting technology platforms—from eCommerce to the Internet of Things (IoT) with data analytics. This has resulted in a crowded field of emerging ideas, new players, and creative applications. B2B leaders are challenged to navigate in this environment while implementing new digitally enabled offerings that contribute to top line growth.
As you undergo this digital transformation and begin to implement IoT initiatives at a rapid pace, it is imperative that you understand how to effectively commercialize these new ground-breaking offers to generate revenue and stay ahead of the competition. Often, the commercial aspect of successfully launching, selling, and establishing an IoT solution is just as challenging, if not more so, than building the underlying technology.
The challenge emerges from different dynamics that are at play when compared to selling a traditional product/service. In working with business leaders, we have identified key questions that you need to address when commercializing an IoT offering. These include:
- Which customers benefit from your IoT offer?
Your traditional customers may not be the same as the ones who can benefit from your new IoT offer. For example, data streams from newly digitized equipment is focused on delivering outcome benefits (e.g., enhanced fuel savings, better equipment uptimes, etc.) for your customer’s service and data analytics teams. In this example, you need to reach beyond your traditional engineering and procurement buyers to understand the needs and purchase decision factors of new customer stakeholders, ensuring that you bring the right people into the discussion.
- How can you reach these customers with the right channel partners?
After determining which customers would use, influence, and pay for a digital offer, you must learn how to access and reach these individuals to successfully sell the offering. If the IoT offer demands that you change your selling approach to IoT customers, it is just as important to ensure that your sales teams and channel partners understand and adapt to this shift. Your channel partners, for example, must be prepared to expand their roles and responsibilities to include handling 24/7 emergency breakdown services, or providing online service information for the customer’s review and approval. These are just a few examples of how your channel partner can contribute to your IoT success.
- How should you choose the right monetization model?
When creating value for customers through unique service offerings, you need to ensure that your monetization model captures value either at the initial launch or at later upsell stages. Choosing the right monetization model to use involves trade-offs and has short-term and long-term implications. A preferred monetization model reflects how the supplier expects to capture value from the digital offer. This is especially true if you aspire to move from a revenue model involving lumpy, large-win revenue patterns (such as those based on tracking project backlog and order rates), to a model that monetizes recurring revenue based on SaaS data-analytics, insights, and/or outcomes.
Organizations need to ensure that they understand all the different aspects of commercializing their digital offering before going to market. Effectively commercializing a digital transformation offering is a challenging effort which, if done correctly, can yield strong rewards.
In our recent white paper, Digital Transformation: How to Commercialize Your Breakthrough Internet of Things (IoT) Offer, we explore in detail the key elements and questions to be addressed and explain in depth how B2B companies can apply them.