Not for free : revenue strategies for a new world

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  • 作 者:Saul J. Berman
  • 出 版 社:Harvard Business Review Press



'Not For Free' will not substitute for a top-level MBA; however, it does update thinking on important marketing dimensions utilizing recent examples. Author Berman contends that nearly every industry is susceptible to widely available low-cost disruptions originating from low-cost communications, data-processing, rapid innovation, and great increased consumer expectations. For example, record companies lost 40% of their revenues since 2000, newspapers 85% of their classified revenues from print editions between 2005-2009, and long-distance telecommunications revenues dropped 80% in the first decade of the new millennium. Further, markets have become increasingly fragmented recently, thanks to increased choices (eg. # of channels), new options - via new technology (eg. Netflix offering both mail and Internet delivery of movies, kiosks are another new option).

Berman then continues by proposing how companies can grow revenue organically in the near term using segmentation, pricing, payer, and packaging innovation. Segmentation groupings have become more useful through technology - rewards cards that accurately track customer actions, and more accurate analyses/predictions via software (eg. Amazon, Netflix). Pricing innovations include new rental offerings (eg. prom dresses), pay-for-performance (some cancer drugs in Britain), selling by parts (eg. individual songs from a disc), and bundling (car options, cable options). Unlimited mobile phone data plans have run into problems via video streaming (projected to be 56% of traffic by 2013). Verizon's not charging for calls to/from fellow Verizon customers encourages existing customers to recruit for the company.

'Spotify' is an English music service funded by 20 second ads for each 30 minutes of music. Hulu intends to offer 'hour-long' programs with only 4 minutes of advertising. Other innovators offer eg. free airtime in return for personal information that contributes to improved advertising focus. Progressive Insurance takes this a step further, sort of - insurees that install a GPS/acceleromter unit get discounted pricing, assuming they're not driving like idiots in the wrong side of town.

Social media click-through rates average 0.04%, vs. a Web average of 0.1%, and Google's 1-2%.

Berman's final category, packaging innovation, turns out to be a very minor mutation (if even that) of bulding. Examples cited include Google Analytics (allows users to make the product more useful), G.M.'s 'OnStar - a product that no longer makes any sense, given today's prevalence of mobile phones. Then there's Best Buy's buy of Geek Squad, taking advantage of the fact that most electronics returns are caused by software installation problems - so it both lowers the return rate and builds revenue by charging buyers for Geek Squad installation. (Sounds like a rip-off, prima facie.)

Finally, readers should beware to putting excess emphasis on Berman's thoughts, good as they are, if that means missing opportunities through slower than possible innovation. Eg. the first Kindles generated far more revenue/unit than those today.