Benefitly’s revenue model, work in progress (aren’t they all?)

Week 9 of Creative Founder: My Respect For Businesspeople Has Tripled

Making revenue is hard.

It seems that people are used to having their data as the product — which means they expect a lot for free.

What does this mean for revenue models? In a previous survey experiment, we asked consumers what they’d be willing to pay for the service of our benefits platform. Their response: nothing. Only one person said $10/month. Most explained that this service could be “supported by advertising, and businesses will pay for it.”

But pay for what, exactly? Do they even know? The obvious answer seems to be the data and the attention of a very specific market. Apparently, that’s what we’re actually selling. The more information we have about that market, and the more specific it is (especially surrounding behaviors and psychographics) the more businesses will probably pay. I say probably because we have to run a new experiment now with businesses and test this assumption.

Trying to think like Amazon — what are our assets and how can we make them work for us?

How does any advertising business become more valuable than the next?

Where do businesses choose to maximize their ad spend and why? If our company truly has to make money through advertising and brokering, we’re going to need to build the case for businesses on why us. Facebook doesn’t necessarily know your income. Neither does Google. But we will. We’ll know what kind of benefits you’re looking for, what services you want, what your health status is, what your needs are, and more — some pretty personal information that most advertising businesses don’t know.

We’ve had two experiments so far: one preliminary survey and one email testing a Freemium model for consumers. It wasn’t a large sample, but no one chose to pay for Premium features, and two chose the Free version. Yep, just as we expected — consumers won’t pay. So what do we do next? We’re going to approach businesses and government agencies.

Our company has the unique burden of being hard to imagine — so like Dropbox, we need to show, not tell.

The test for businesses and government will most likely involve a mockup — we need to show them we’re serious and what we’re selling. It’ll be hard to get people to buy something they can’t see. Does this constitute a customer segment pivot, or do we really just have more types of customers than we thought? We’re most likely going to end up with a mixed revenue model to offset each of our stakeholders’ interests: freemium from both customers, lead generation, and brokering, hopefully with a channel that controls a transaction. Time to develop the next test for businesses—while trying to stay ethical.