How to Convert User Value into Revenue?
Monetization Case Study: Google Maps
Today’s Internet-based service businesses fascinate me. Companies like Facebook, Google, and Snapchat are shipping their products for free, ramping up their user base first, and then using their data to get people hooked on their platforms and products. But how do they finance their product so that they can offer it for free, where does the money come from? It’s mostly through ads and selling data but I was curious to find out if there were other approaches.
I came up with a process of understanding what value we provide for our users and how might we convert that into revenue.
How Google Maps Monetized their Platform
Most of my findings and analysis come from informal interviews with users and secondary research. I am going to dive deeper into this concept using Google Maps as an example.
The platform side of Google Maps is already heavily monetized with ‘subscription’ or ‘pay by usage’ based models. I was more interested in their consumer side, which I broke down into three segments, based on user type.
NOTE: I am sure Google would have identified more than three user types, especially with the pool of data that they collect from their ecosystem of applications. However, for the purpose of this example, let’s consider only three.
Type 1: the Regular Commuter
Now that we have some understanding of what this type of user would want, let’s have a closer look at his experience on the app.
At this point, we outline our monetization goal for this particular user:
How might we add value to the Regular Commuter without slowing him down?
Once our goal is established, we go through the user journey and list the aspects where value could be added. We then think of what feature or functionality could be augmented that we can potentially be monetized.
I would like to emphasize that the placement and frequency of these new additions should be carefully considered to preserve the experience. The Regular Commuter, first and foremost, wants to get from point A to B quickly. New product features and additions are welcomed, if they add some value along the journey, as long as that doesn’t hinder the main purpose of the app.
NOTE: I am evaluating Google Maps as a standalone product. They could most definitely capitalize on the interplay with other products in their ecosystem. In addition to that, these features or functionality may or may not be currently in use, these are just recommendations from a monetization perspective.
Type 2: the Explorer
The Explorer is more concerned about the destination and how they get there is of a lower priority. The monetization goal for the Explorer is:
How might we add value to the Explorer to create an experience that allows them to enjoy events, food, drinks, places and more?
Type 3: the New Commuter
The monetization goal:
How might we add value to the New Commuter without making things too complex?
Summing up, I’d like to say that through this process of diving deeper into value-based monetization, both new and existing businesses could enhance their revenue streams. This is also a good approach for Product Managers to get an idea of what to build next.
It is only when we put ourselves in the user’s shoes, go through their journey that we get a better understanding of what value our product really provides and how can we improve.
