(SEE UPDATE AND VIDEO*) FairPay presentation by Richard Reisman, Teleshuttle Coprporation at MIT Enterprise Forum of NYC "Better Strategies for Monetizing Digital Offerings" 12/1/11.
*FOR A MORE CURRENT VERSION OF SIMILAR PRESENTATION, SEE
Reisman FairPay Overview -- Adaptive Win-Win Relationships / Revenue Strategy - Latest Version
http://www.slideshare.net/rreisman/reisman-fairpay-overview
FOR VIDEO SEE
http://www.fairpayzone.com/p/blog-page_14.html
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Reisman on FairPay at MITEF "Better Strategies for Monetizing Digital Offerings" 12-1-11 (See Updated Presentation*)
1. Monetizing Digital Offerings âŚA Radical Re-thinking
FairPay
Customer Dialogs about Value
Richard Reisman, Teleshuttle Corporation
fairpay [at] teleshuttle [dot] com
âBetter Strategies for Monetizing Digital Offeringsâ
December 1, 2011
1
Copyright 2011, Teleshuttle Corp. All rights reserved. / Patent pending
2. Digital Problem=Opportunity #1
The Long Tail of Price Sensitivity
⢠Green revenue:
(capped at set price)
⢠Red head: lost
⢠Amber tail: lost
(less to more price sensitive)
âŚDynamic, context-dependent
2
3. Digital Problem=Opportunity #2
A digital âproductâ?
⢠Near-zero marginal cost
⢠Selling entitlements to access
â By time, volume, devices, users, âŚ
â Unlimited variations âŚall measurable
⢠âFreeâ as a selling tool
3
5. View Pricing Holistically!
A value discovery process
â Optimize price over the relationship
⢠Risk a few transactions
to seek a win-win relationship
â Re-integrate discovery and testing
⢠Continuous tracking
⢠Rich usage instrumentation
⢠Dialog
5
6. --Thanks to John Blossom, Shore Communications (ContentBlogger)
âPay as You Exit: FairPay Explores New Content Pricing Discovery Regimesâ
6
7. FairPay Dialog
Gated FP Offer Accept/buy/use Set âfairâ price
(before pricing) (after buy and use)
(Seller ) (Buyer) (Buyer)
Extend it Forward Price it Backward
(limit FairPay credit) (after trial)
Fair to seller??? Track price
(Seller) (Seller)
7
8. To Customers
⢠Pay only what seems fair to you -- after you try it
⢠Agree to set price fairly -- in your own judgment
âŚand explain why it is fair
â Predefined reasons (+ free-form comments)
⢠A privilege that is revocable
8
9. Seller Control and Predictability?
Frame/nudge and track
⢠Managed dialog -- âchoice architectureâ
â Seller
⢠reports usage
⢠provides a suggested price schedule
â Buyer
⢠sets FairPay prices, in terms of differential from suggested
⢠states reasons for their differential
â Seller
⢠evaluates fairness of reasons
⢠frames new offers -- manages FairPay credit and incentives
⢠Nudge buyers toward suggested prices
⢠Test/review value propositions, offers, framing, incentives
9
10. FairPay Value Discovery Engine
Frame/nudge and track
Offers Value/Fairness
Seller- High
gated -Fair
Premium
FairPay Buyer
Offer Buyer Buyer Seller
Accepts
Tries Sets Tracks Low-
FairPay
Product FairPay Fairness Fair
Offer
Seller- /Service Price of Price
?
gated Basic
FairPay Un-
Offer Fair
FairPay Zone (revocable privilege)
Seller Sets Price Buyer Accepts Buyer Uses
(take or leave it) Set-Price Offer ? Product /Service
Buyer Conventional Set-Price Zone
10
11. Engage Customers in Real Dialog
Real-time, Real-life Market Research
⢠Dynamic pricing and value discovery
â Real willingness to pay
â Specific to actual product/buyer/context
⢠Profile-based offer model
⢠Trials of mutual discovery
ď¨Higher margins + deeper market penetration
11
13. Platform and Database Opportunities
⢠Single vendor â internal process solutions
⢠Cross-vendor â added leverage
â Shared infrastructure and processes
= âPricing as a Serviceâ (PaaS)
â New: FairPay Reputation Database
⢠Across vendors and contexts (ratings + details)
⢠Use like credit rating database
ď¨ Database asset, first mover advantage
13
14. Usage/Value Pricing - Buyer-friendly
⢠No ticking meter / No usage shock
⢠Price âconsideringâ usage, butâŚ
â Buyer factors in
⢠usage
⢠volume discounts
(with seller guidance)
â Soften the extremes â averaging out
ď¨Price tracks to value
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15. Price Discrimination - Buyer-accepted
Economic optimum: price tracks to value
⢠Buyer âself-discriminationâ
⢠Engages buyers -- a rewarding process
⢠Infinite segmentation, in all dimensions
â Context, ability-to-pay, usage, time, devices, users, âŚ
15
16. Where to start?
(Examples for Music Subscriptions)
Acquisition =âFuzzy Freemiumâ versions, tie-ins, gamification,
membership âclubâ
Retention Low usage, low price
Premium âclubâ segments curated, early access, downloads,
added features
Usage /style segments Low/high usage, low/high cost, âŚ
Content segments: Long-tail / genre indies, back-list, genres
Device segments phones, embedded systems
âDeservingâ sellers compensation to artist
Trials, sampling, coupons, specials
16
17. FairPay Dialog
Continuing Feedback â Balance â Convergence â Inclusion
Gated FP Offer Accept/buy/use Set âfairâ price
(before pricing) (after buy and use)
(Seller ) (Buyer) (Buyer)
Extend it Forward Price it Backward
(limit FairPay credit) (in arrears)
Fair to seller??? Track price
(Seller) (Seller)
17
18. FairPay
Customer Dialogs about Value
Richard Reisman
Teleshuttle Corporation
fairpay [at] teleshuttle [dot] com
212-673-0225
Teleshuttle.com/FairPay
Blog: FairPayZone.com
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20. The Not-So-Crazy World
of âPay What You Wantâ
⢠Real Successes (mostly special offers, customer acquisition)
â Radiohead
â Humble Indie Bundle $6.2MM, $4.2MM funding
â Music, games
â Restaurants: Panera, Kish
â Hotels
⢠Emerging Behavioral Economics
â Social norms, fairness, reciprocity, altruism, framing, âŚ
FairPay expands on it (feedback/tracking, pay it backward),
to retain the benefits, and solve the problems
See: Resource Guide to Pricing
Wikipedia entry on Pay What You Want
20
21. Publicity Value
to Early Adopters of FairPay
⢠Pay What You Want offers generate
dramatic publicity
(Radiohead, Panera Bread, Humble Indie Bundle, âŚ)
⢠FairPay sellers can play the same card
(as a form of âPay What You Wantâ)
[Added 1/3/12]
21
22. FairPay Development Status
⢠Patent filings (published by USPTO 12/1/11)
â High level s/w architectures, rich functionality
⢠Public: June, 2010 â Web / Blog
⢠Many positive responses from varied sectors
⢠1st commercial use â ennovent.com (begun 4Q11)
⢠Free consults on use
22
23. Product / Service Category Examples
⢠Anything with low marginal cost
â Long-tail / low-demand products (expand market / gain revenue)
â Short-head / high-demand products (expand market / gain revenue)
⢠Digital content / products /services (by item or by subscription)
â News / information / magazines
â Music
â Video
â Games
â E-Books
â Apps / Software
â Other Services
⢠Real products /services
â Low marginal cost
â Sampling / trials /coupons
â Perishable excess
23
24. Process Automation and Control
Integration with existing systems
⢠Offer management / merchandising / CRM
⢠Gated PWYW offer â framing the terms
⢠Payment request / reminder â framing the terms
⢠Buyer pricing explanations â situational fairness
⢠Tracking prices ď¨ Fairness rating
⢠FairPay Reputation Database
⢠Value-at-risk management -- FP âcredit lineâ
⢠Seller guidance: Framing, framing, framing
(effective choice architecture to nudge behavior)
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