5 Tips For Recovering Revenue With APIs
Recovering revenue is an important part of running a successful venture in the modern API economy. With an API product it can be easy to undervalue your services and, ultimately, your business. This is why many API providers turn to billing customers for their usage, but which API monetization method is best for your product stack? Moesif enables you to make smart, informed decisions around your customers and maximize the monetization of your business model. Here’s how to approach your API monetization structure to minimize churn risk, and maximize API revenue and customer satisfaction.
1. Monitor Customer Behavior and Usage to Create Guidelines
Understanding the business value of your API and how to structure monetization and usage guidelines starts with data. Be informed about what your users generally do and how many calls they normally take or receive over your API. Benchmark user behavior with analytics on your user-base with data collected and stored over your API. It is important to note that users behave differently depending on what your API is meant for, but understanding the base needs and wants of your users will help your developers set up meaningful internal protocols for dealing with customer issues.
Setting up informed internal protocols and alerts for flagging outliers allows you to contact customers more quickly around possible usage or billing concerns or manage support needs before customers are aware of possible issues.
2. Direct Monetization with Usage-Based Billing
Deciding on an invoicing strategy is no easy feat, but monetizing your APIs is one way to recoup monetary resources without extending your product line. Moesif can empower your business needs with easily integrated API monetization support. Determine the right API monetization strategy for your product by examining your current users - what features do they rely on most? What metrics do they base their business on? Understanding your user’s top needs will enable you to implement revenue generators.
Usage-based billing enables you to achieve the real business value of your APIs. If you’re following the traditional way of billing for API usage (a tiered subscription model), then you’re leaving money on the table. Whether you implement a prepaid or postpaid model, monetization allows you to select the most relevant metrics (API call count, active users, gigabytes sent, etc.) to capitalize on, bringing value to your customers while allowing you to charge for their API access. Pricing out your rate plan structure begins with a look at all the features your API platform or product offers. Look at the most necessary tools and the cost to the business to offer them to build your pricing options, leading to direct revenue.
3. Appeal to Developers
APIs are used by developers, so it makes sense to take a developer-first approach to documentation and messaging. Creating revenue opportunities starts with happy users, which starts pointed API resources. Your API may be the quickest, smartest way to solve a given problem, but if integrating it is too convoluted, users will move on to the next option. Documentation should be clear and straight to the point to avoid confusion during implementation. The more straightforward your initial documentation is, the more likely developers will be to successfully stand up and use your API - developers value ease of use. When considering how to attract users, consider messaging dedicated for the individuals who will use your API in earnest. After all, attracting stakeholders begins with developer advocacy.
Be sure to take advantage of API users willing to test your product, as it will be easier to make a sale when developers have had a chance to test and advocate for implementing your API. Offering trials and flexibility around feature exploration is one way to push companies to make informed decisions around increasing API usage and create extra monetization opportunities.
4. Personalize to Your Differing Users
Different users will behave differently because they use your API product for differing purposes. The behavior and usage of a developer in fintech, for example, is vastly different from one in healthcare. Understanding how your API is used is one thing, but who is using it? Data offers insight into consumer patterns, ideal follow-up frequency, even how often to retry a payment method. Personalize these insights to the different companies and business sectors utilizing your app. As more businesses undergo a digital transformation, make sure your messaging is true to different customer’s API needs.
Building a comprehensive understanding of your users is not easy, but Moesif makes it simpler with real-time data and advanced user usage analysis. Understand your user journey down to the individual user and make smarter, data-driven decisions around your API monetization model.
5. Give Customers Leeway Within Reason
Nothing speaks to users the way patience and nudging can. When payment fails, do not be afraid to contact your customers. When it comes to subscriptions where customers payment methods fail to complete a transaction, you may choose to:
- Keep the subscription active,
- Terminate the subscription, or
- Pause or temporarily deactivate it
Customers are valuable and important to the ecosystem of an API company, but so is trust and revenue. This is why it can be better to pause the subscription, withholding future services while giving the customer the benefit of the doubt to correct a failed payment method. To resume API consumption, a digital business will rectify their payment issue after being alerted to the problem. Unless abuse occurs, air on the side of alerting your users to possible issues rather than jumping straight to subscription cancellation.
It is important for your customer success team to balance your business needs with customer desires by maintaining regular communication around account status. This could be as simple as [setting up an external alerts with Moesif’s behavioral emails to let customers know their usage is exceeding their quota to avoid surprise charges, or an email nudge around failed payment and timeline to subscription deactivation.
Building a winning business strategy for your product starts with using data to make informed decisions around API monetization and customer communication. Learn more about how Moesif can help your APIs generate further revenue and support your customer solutions to scale.