Last Updated: December, 2023
Your business runs on the revenue that you make. The products and services you deliver are essential, but the revenue you generate on top of it is equally important. In this article, let us boil down the different ways for IoT monetization and how you can adapt to them to boost your numbers!
Traditional IoT business models vs. IoT monetization
Traditional models for IoT businesses are more centered around selling a particular IoT solution or a set of services that support the IoT ecosystem. While this model is easier to understand and implement, there is a major gap when it comes to unlocking the potential of monetizing the data usage.
Here are several characteristics of a traditional IoT business model:
- Tangible offerings
IoT solution providers commonly generate revenue by pricing tangible offerings such as products, solutions, or services.
- Data usage as a mere by-product
The significance of data usage as a valuable asset is often overlooked, with data being treated merely as a by-product.
- Limited growth in revenue
IoT monetization, tied to one-time product sales, limits growth and becomes exhaustive in competitive markets.
- Struggles of a competitive market
Without data usage monetization, revenue generation may be limited, impeding expansion and competitiveness in the market.
The characteristics of revenue streams generated from IoT monetization:
- Amount of data usage as a fundamental revenue stream
IoT monetization revolves around data usage consumption as the primary element for revenue generation. It can help businesses earn more money through the IoT solutions offered at the same price.
- Recurring revenue collection
IoT solutions are often on-time purchases, and some may need maintenance or activation after a while. But with IoT monetization, this can change into a recurring model where users subscribe monthly for continued services.
- Everything from traditional revenue models and more
IoT monetization retains the benefits of traditional business models while enhancing them. It’s a smarter and more modern way to generate revenue.
- Reinvestments, R&D, and expansion
Through monetization, you can leverage IoT data usage to unlock new opportunities. Increased revenue and profits can fuel reinvestments and R&D efforts, facilitating rapid business expansion.
- Data monetization forecasting
With subscriptions, brands know the precise number of active users in the market. The number of subscriptions translates into a forecast of future revenue through data usage monetization. This feature enables businesses to have a steady and predictable income.
- More revenue at the same pricing
Your customers won’t face extra charges for IoT monetization solutions, despite the manufacturer earning additional income. This advantage makes adopting IoT monetization a straightforward choice for businesses.
3 Strategies for Successful IoT Monetization
You can monetize your IoT offerings in various ways, depending on the services connected to your IoT network. Here are some strategies you can use to leverage IoT monetization for your business:
- Monetizing IoT subscription services
This is probably the most scalable and high-volume approach to revenue growth. You are generating more revenue from every single IoT device you provide once you leverage data subscriptions to users. It is recurring, flexible, and scalable for any business.
Freeeway is an example of a partner that can assist with your IoT monetization requirements. In this collaboration, device manufacturers can earn a designated percentage of data monetization revenue without concerns about global connectivity, data visualization, billing, taxation, or other related aspects.
When executed effectively, it can also bring added value to end users by offering ready-to-connect hardware solutions. A trustworthy provider can seize this opportunity to enhance their product while generating revenue from it.
- Personalization services surrounding user data
User data offers valuable insights into behaviors, patterns, choices, and activities. Brands can ethically collect and analyze this information, enabling them to tailor a personalized approach for clients.
For example, a sleep tracker can gather data and offer personalized coaching or insights through a mobile app. This becomes a high-value offering for brands, providing significant benefits to users as well.
- Providing IoT consultation
IoT consultation services involve IoT solution providers assisting users in implementing IoT technologies. Brands offering their IoT data subscriptions gain access to users’ device data consumption patterns.
Users can seek consultation from these providers to access insights and enhance their IoT networks based on the collected usage data. This process helps identify network challenges and device failures through IoT data consultation.
Modern IoT enterprises experiment with combining various IoT monetization approaches in their businesses. Depending on your client base and IoT application, you can determine the most efficient and fruitful IoT monetization strategy for your business.