Monetization Law Number #10

Monetization Governance and Control will drive consistency and profits in your organization.

Monetization is a Discipline.

Review pricing on at least a monthly basis as part of your financial review and amend prices every six months 

This chapter is about how monetization should be treated as a discipline. A core functional role within your success stack alongside marketing, product, finance, people etc.

The Rule provides a quick monetization heuristic i.e. a rule of thumb in operation, a kind of —do this— and you’ll be 80% of the way there.

Rationale explains why the rule works with deeper insights and its use in practice.

Rabbit hole provides more in-depth resources and recommendations for anyone wanting to spend more hours researching each topic.

⓵ Rule 📖

⓶ Rationale 🧠

⓷ Rabbit Hole 🐇

⓵ Rule: Monetization Law #10 📖

Review pricing on at least a monthly basis as part of your financial review and amend prices every six months

⓶ Rationale: Monetization Law #10 🧠

Monetization As A Discipline

Monetization discipline functions should align with other corporate functions.

We introduce the concept that monetization is itself a discipline.

We, along with many other pricing commentators, offers proof that monetization matters.

Establishing a framework for dealing with the governance process of monetization is the question we address here.

The ontology design aids the process of governance by focusing on the eight core building blocks that monetization policy, management, and governance should cover.

Monetization Governance

Treat monetization as a discipline and create the controls that would be present in all other revenue and cost-saving functions.

Monetization Execution Levels

The overarching levels of monetization execution can be simplified into policy, coordination and operation. Here we explain the role and guiding principles from each:

Policy level - this is the most crucial part of the governing process. Monetization policy forms the foundation in establishing your monetization culture.

Firstly, fundamentals such as growth, revenue, and profit ethos should be a core part of this section.

Secondly, the policy should set out how the oversight committee or board review will be carried out and on what basis success is measured.

Lastly, who is responsible for the execution of the monetization policy.

Co-ordination level - is where the key stakeholders are identified and mandated certain functions within the overall monetization process.

Monetization will involve product, marketing, finance, engineering, sales, and customer service/relationship functions in most companies.

The broad involvement ensures that maximum knowledge acquisition of all customer and market landscape elements fall into the decision making process.

A set schedule including all eight sections of the ontology forms the agenda.

Operational level - this is where the rubber meets the road, the responsible function formally is authorized to execute the monetization policy and report progress.

⓷ Rabbit Hole: Monetization Law #10 🐇

Monetization Governance & Control

Like all other core functions, monetization governance and control should adhere to the same principles that are set by your organization.

Review cycles, oversight mechanisms, and responsibility matrices need to be defined and communicated.

The monetization policy should set the tone of what the company is trying to achieve. And the code of conduct for these objectives.

The map & the territory

To explain monetization governance for the critical roles in which it interacts, we have set out our high-level role objectives for each function. 

The map, is not the territory itself, in that it doesn’t attempt to explain the intricacies of every organization and every pricing action or responsibility lines.

However, it does set out an understanding of how we have positioned this book to indicate that monetization is not yet a function in most organizations.

As such, we have attempted to reflect on how each relevant function could interact in terms of their core objective outcome as indicated below:

- the product function optimises the quality and quantum of products/services

- the marketing and sales function optimises the quantum and flow of customers

- the monetization function optimises the quantum and flow of ave profit per unit or customer (arpru/arprc)

- the finance function optimises the quantum and flow of capital - earnings, liquidity and investment

-the customer operations function optimises the quantum and flow of customer satisfaction.

The broad stroke definitions are useful because, as with any organization, the lines are often blurred between responsibility and accountability.

Governance Model

The Governance Model divides into three sections; Principles, Policy & Procedures.

The principles section covers the core elements of your monetization including product or service psychology, orientation and overarching monetization strategy i.e. anchor or value-based.

The policy section works along the ontology covering the remaining sections including, monetization models, monetization packaging, monetization pricing tactics, monetization channels and monetization execution.

The policy should lay the rule framework, which can be followed by the appointed function or responsible person.

It sets out the boundaries of the remit, the process, and control requirements, including authority limits, system controls, record keeping, review periods, extraordinary procedures, discount authorization, research budgets, currency management, and pricing base rates such as CPI.

The procedures section is designed to allow a user to operate the monetization policy within the guidelines.

This includes authorized technology, task explanations, and other standard operating procedure details.

🐇 Additional Research 🐇

Monetization as a discipline is a new approach. Although championed by many of the leading lights within the pricing arena, little research is available on the governance and functional roles within this area.

I believe this represents a huge opportunity to create and mould monetization functions that drive maximum profitability. That function will be run by Monetization Architects.

Take a look at the disciplines below that have emerged in the last two decades for inspiration.