The Critical Role of UX in Software MonetizationAn eBook for software publishers and intelligent device manufacturers

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IntroductionWe live in a world that is increasingly digital. Stop and think for a moment how that digital transformation has affected your personal life. From ordering a Frappuccino via Starbucks.com, to refinancing your home online or getting directions to a new restaurant on your mobile phone, the number and nature of your personal digital experiences has increased dramatically.

On the business front, the changes are even more profound. Driven by the desire to create efficiency, reduce costs and become more responsive, companies are on a headlong charge to digitize nearly every aspect of their business and operations. This digital transformation, referred to as digitization, is largely driven by software and supported by intelligent devices. The net effect of this radical change means that in today’s business landscape, nearly every company is reliant on software and intelligent devices to conduct business in some way, shape or form.

While digitization offers many tantalizing business benefits, it also comes with its own set of challenges. As the reliance on software continues to expand and deepen, every company has a vested interest in effectively managing and monetizing that software investment to maximize the benefits it can offer. Software Monetization can be defined as the adoption of any variety of measures an organization takes to increase the profitability of their intellectual property, in this case, software. These efforts can range from sophisticated anti-piracy techniques to creative pricing strategies, managing software entitlements and licenses and improving operational efficiency by automating and integrating the back office.

For software and intelligent device vendors, an effective Software Monetization strategy is a mission-critical business component. While the need for Software Monetization is obvious to most such vendors, a key component that can drive success is often over-looked, down-played or viewed as something that’s only required for companies marketing and selling products to consumers. In today’s digital world, offering a high quality, world-class User Experience is not just a nice to have—it’s an absolute necessity.

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Welcome to the Experience-Centric WorldIn the business environment, companies large and small are riding the wave of digitization—the conversion of paper-based, people-intensive workflows and processes into streamlined digital versions that improve operational efficiency and bottom line business results. This rush towards digitizing every aspect of business comes with a considerable challenge—how to make all those digital experiences meaningful, useful and valuable for the users they are intended to serve. Simply offering a digital experience is not enough. To be competitive, businesses must offer high-quality, world-class digital experiences that clearly and emphatically meet the needs of target users and customers. And delivering that kind of user experience is no longer the exclusive domain of B2C brands.

The Demise of B2C vs. B2BBack in the “old days” (which means less than 10 years ago in Internet time), most organizations bought into the logic that B2C and B2B products and services were entirely different. Engaging and marketing to consumers online required a thoughtful design, a compelling brand and a product that was clearly designed to meet the specific needs of target consumers. Ironically, the conventional wisdom at the time (which not all of us bought into) also believed that marketing to another business or to business users didn’t require all that “fluff” because business users were somehow “different” than consumers.

Dispelling this myth starts by asking yourself a few basic questions. Think about your online banking activities, paying bills electronically, conducting purchase research online, social media, email, mobile apps, etc.—are all of those digital products and services easy to use? No—the reality is that some are better than others.

When you encounter a digital product or service that’s difficult to use, what’s your typical response as a user? If you’re like most people, your response is to look for a competing product or service that’s easier to use and delivers more value. In other words, you search for a better digital experience. This behavior has migrated to the business space and it’s a trend that is critically important in terms of understanding how to develop effective digital solutions for business users in an experience-centric world.

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The Rise of ConsumerizationThe trend we see today—business users demanding better, more effective digital experiences from their vendors, suppliers and partners—is a form of “Consumerization.”

You, the reader, are not only a working professional, but also a consumer of digital products and services in your personal life. As a result of all of that “consumer” experience your expectation is that any legitimate digital product or service—be it consumer—or business-oriented—should be well-designed, easy to use and meet your needs. Do you leave those expectations at home when you head to the office? No, of course not. Because the line between success and failure is no longer about whether it’s a consumer or business product, it’s about whether the brand delivers what was promised in the form of a simple, effective and easy to manage digital experience.

The reality is that Consumerization is rewriting the playbook and upping the ante for organizations that are developing digital products and services for business users. In our experience-centric world, offering anything less than a world-class digital experience to customers, partners and employees is creating a business liability rather than a competitive advantage.

It’s easy to fall into the mental trap of thinking that your Software Monetization efforts don’t really require that kind of high-quality user experience because it’s a business application and business users are different. The irony is that given the complexity, scale, scope and level of investment required to develop a Software Monetization strategy there aren’t many areas in your business that need it more. In a recent poll, 93% of executives surveyed thought that improving the user experience of their product or service was a top strategic priority. What do they know that you don’t?

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Take the example of AirBnB which went from a failing start-up to a market-leading company with a $10B valuation. In the words of AirBnB’s Mike Gebbia “When we started talking to our customers and seeing how they used our service, it was a defining moment of success that turned the company around.”

The following KPIs help illuminate the business case on how UX can create a competitive advantage in our experience-centric, digital world.

> UX leaders outperform their peers financially: > The top 10 customer experience leaders outperformed the S&P with close to triple the returns, at a cumulative total of +43%

> UX can reduce development inefficiencies: > UX helps define usability and customer requirements up-front, before development begins and can reduce rework by up to 50%

> UX and its focus on user testing can help reduce adoption risks:

> 72% cite effective user adoption as the key to success (vs 16% who cite software functionality)

Forward-thinking companies recognize that there has been a shift from delivering products or services online to delivering experiences online. They have embraced the value of User Experience Design because it’s a logical way to develop digital products and services that businesses will actually purchase and customers will actually use. Market leaders like Google, Amazon, Apple, Ford and Charles Schwab recognize the value of creating a deep understanding of user needs and then converting that knowledge into a product that is simple, accessible and easy to use. Launching a product without adequate customer knowledge—whether it’s a consumer device or a Software Monetization component—is at best, very risky; at worst, it can be a total disaster.

Take Microsoft’s 2006 launch of its Zune MP3 player, intended to offer a compelling alternative to Apple’s market-dominating iPod. Unfortunately, Microsoft miscalculated badly and assumed that users were primarily interested in a richer set of product features and more on-board memory. This resulted in a technically superior but more difficult to use device. The market reality that Microsoft didn’t understand was that users appreciated the iPod for its simplicity and ease of use. The Zune failed because Microsoft produced a product that very few consumers were interested in buying.

While UX can help companies avoid costly product and service errors, it can also help companies realign their vision, products and purpose with the needs of actual customers.

UX will continue to grow in importance when it comes to developing digital products and services for business users. Whether your Software Monetization goals are big or small, the business case for UX is compelling. Let’s take a look at how to incorporate UX best practices into your own Software Monetization efforts.

User Experience Design: The Business Case

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It’s important to understand that there is no “one-size-fits-all” approach to Software Monetization. Therefore, the approach must be tailored to the unique needs of each organization. And more importantly, to the unique needs of the users that will interact with the system. Maximizing benefits, reducing costs, enhancing efficiencies—those are the benefits that every company who adopts a software monetization strategy stands to gain, however, the way in which each of those companies goes about converting that vision into reality will likely be different.

UX: The Hidden Software Monetization Requirement

The key to identifying your organization’s unique needs and developing a simple, effective and valuable digital experience for your target users can be found by incorporating UX best practices into your Software Monetization efforts.

As stated, the overall intention of UX is to convert a deep understanding of target users into a simple, effective and valuable digital experience that meets their needs. This can be challenging because user needs change and evolve over time. For example, a user who is accessing your product for the first time will have a different set of needs as compared to an experienced user who has accessed the product day in and day out for months. The new user will require features that help her get started using the system as quickly and effectively as possible while the more experienced user will place a higher premium on features that simplify day-to-day tasks and support her other operational responsibilities.

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Customer Lifecycle Stages: Your Software Monetization UX Starting PointFor many companies, a logical starting point for incorporating UX best practices into their Software Monetization efforts begins with developing a deep understanding of each phase of the customer lifecycle. This includes understanding not only what your customers need at each stage but also what your sales, marketing and support teams need in order to provide your customers with the best experience at each phase of the lifecycle. Looking at both external, customer-facing systems as well as internal, operations-oriented systems is critical in terms of developing experiences that will improve customer satisfaction while creating internal, operational efficiencies.

While the specific approach and solution for each customer lifecycle stage might differ from one organization to another, the stages themselves remain fairly consistent for software and intelligent device vendors. Let’s take a look incorporating UX best practices into the Sales, Registration and Renewal customer lifecycle stages to provide an illustrative example of how UX can help you convert your Software Monetization efforts into a competitive advantage.

For the sake of this example, we will look at a specific aspect of Software Monetization called Software Licensing Management (SLM) which can be defined as a tool used by independent software vendors or by end-user organizations to control where and how software products are able to run. This includes managing software licenses and entitlements, activating software products and features, tracking and managing software usage data and renewing software and device licenses.

1. Customization

3. Customer Intelligence

2. Onboarding

4. Renewal Process

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1Put your current solution to the UX test

> Product Information: are you providing simple, clear explanations of product features and pricing options

> Help Me Choose: are you delivering an interactive tool that helps users choose the most relevant software product(s) and features? Do you offer a self-service approach that offers the user a trial version so that they can arrive at a buy decision at their own pace?

> Sales Team Interface: have you given your sales or product team a simple, intuitive interactive tool that allows them to customize products and bundles by turning specific features on or off?

> Customer Insights: are you tracking and monitoring product usage data in order to enable your sales team to proactively identify opportunities to upsell or cross-sell logical features or products? allow you to make money on this license model and attract new end users?

Key UX take away: Integrating a Software Licensing Management system, will allow your product management team to accommodate segmented customer needs by creating specialized software packages nearly ‘on the fly’ without creating a new release and the accompanying development requirements - ensuring satisfaction and fast time to market.

Providing end users with anytime, anywhere, any device access to core enterprise systems, as well as the ability to interact with data to get work done, has become a key strategic imperative.

The sales process can be a tricky proposition for many software and intelligent device vendors in terms of their overall Software Monetization efforts. It represents a point in the business where sales, marketing, product development, customer service and any number of other internal, operational groups overlap. It’s an intersection that’s ripe for confusion, missed opportunities and lost sales. But only if you ignore some very basic UX considerations.

One of the biggest challenges during this phase of the lifecycle is the lack of customization available to customers. For many businesses, the traditional “one size fits all” approach that software vendors have taken in the past doesn’t work anymore. Looking back on the impact of consumerization with business users, it’s logical that your customers will want to pay for only the software products and specific features that are relevant to their business needs. Failing to deliver this kind of flexibility and customization can lead to lost sales and a reduction in revenue, longer sales lead times and internal, operational inefficiencies.

Sales had to leave $30,000 on the table because customer did not see the value in purchasing the full version of Product C.

Product A

Customer

Sales

Product B

Product C

Sales generated an additional $30,000 in revenue by customizing Product C.

Product A

Customer

Sales

Product B

Product C(single Feature) Product C

Lack of Customization Flexible Packaging

The Sales Process: Customization

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2The registration process is another point in the lifecycle that can be difficult to manage effectively because many things are happening at once for the customer. Purchasing, downloading and installing and finally, activating and using the product.

This is a critical point in the customer lifecycle and the supporting digital experience you provide your customers with can create frustration and confusion early in the relationship. Developing a streamlined, fully integrated registration experience that gets your customers up and running quickly and easily is a mission-critical goal at this stage.

The Registration Process: Onboarding

Systems are not streamlined so the registration process varies. The customer placed one order. It creates confusion when they are sent in two different directions with two different “look and

Order is entered and Sentinel EMS automates one email with one code to activate both products. Customers can activate products via a web portal to download directly.

Customer

EMSDefineEntitleControlReport

Order AdminProduct A

Product B

Product A

Product B

4

3

1

2

2 3

1

Order Admin

Web FormWeb Form Web Form

Delayed, Disjointed & Confusing Automated, Easy & Unified

Put your current solution to the UX test

> One-Stop Approach: do you provide customers with a single, consistent place within your SLM system to register, download, install and activate ALL their products? Are you avoiding creating different registration pages for different products? (this may mirror your internal company structure where groups or teams within the company “own” specific products, but it creates a significant amount of work for the customer).

> Visual Integration: are you ensuring that all pages within your registration flow look and feel the same? Are you sending users to different pages with different designs and/or branding that can be confusing and create a “junky,” unprofessional feel which has a negative impact on your customers’ perception of your brand and the quality of your product offering?

> Keep It Simple: are you delivering an extremely simple user experience that supports your customer’s goal of getting the software up and running as soon as possible? Note that while this may feel like an obvious consideration, a surprising number of companies miss the mark here and deliver cumbersome, frustrating and time-consuming registration processes that have a decidedly negative impact on

customer satisfaction.attract new end users?

Key UX take away: Leveraging a professionally designed, fully automated and user-friendly customer portal for Licensing Management is the optimal way to onboard and welcome your customers.

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3Customer insights are the new currency of business. Mining these insights and converting them into actionable business strategies is the goal of any savvy, customer-focused organization. The registration process represents exceptionally fertile ground for developing the kind of business intelligence that can create a competitive advantage.

While creating this kind of customer intelligence has obvious value, building a system designed to collect, report and inform your decision-makers can be challenging. The challenge typically comes in the form of a complex array of internal, siloed systems (and data collected by individual groups within your organization) that must be integrated to create a comprehensive view of customer behavior and usage.

Without an easy automated system in place, customers become disgruntled when suddenly their software stops working. It creates confusion, reflects unprofessionalism & makes it easy for them to switch to a competitor.

Sentinel EMS centralizes all customer data and easily generates customizable reports.

EMSDefineEntitleControlReport

Sales

Customer ServiceCustomer Customer

Updated data flowTime to renew

Customer Confusion Customer Retention

Put your current solution to the UX test

> Integrated Reporting: are you centralizing the collection of product usage data and reporting by creating a single place within your SLM system to view data and create reports? Remember—this feature is only useful and valuable to your organization if internal stakeholders use it and act on it so creating simple but highly informative reporting interface and user experience is critical

> Customer-Driven Pricing and Packaging Strategies: are you capturing product feature usage metrics that can inform your product pricing and packaging strategies?

Key UX take away: Use of a Software Licensing Management tool can simplify and integrate the collection of product feature usage and insights. This data can be converted into sales, marketing and product development strategies that reflect real customer behavior while nurturing and growing your customer relationships.

The Registration Process: Customer Intelligence

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4 The Renewal ProcessCompleting the initial sale and getting the customer registered and onboard were the primary focal points for the first two lifecycle phases. This phase involves keeping that customer and maximizing their lifetime value.

As with any license-based business model, some software licenses require renewal. Imagine your customer’s frustration when their software license expires and the product stops working. The goal of any effective SLM is to make it as easy as possible for your customers to continue doing business with your organization. Now imagine te peace of mind and assurance your customer has when you proactively remind her that it’s time to renew the license. This also creates an opportunity for your sales team to review the customer’s data and usage stats and proactively cross-sell or up-sell additional features or logical supporting products.

Without an easy automated system in place, customers become disgruntled when suddenly their software stops working. It creates confusion, reflects unprofessionalism & makes it easy for them to switch to a competitor.

Sentinel EMS centralizes all customer data and easily generates customizable reports.

EMSDefineEntitleControlReport

Sales

Customer ServiceCustomer Customer

Updated data flowTime to renew

Customer Confusion Customer Retention

Put your current solution to the UX test

> Deliver Transparency: are you proactively keeping users informed on all of their upcoming renewals? Are you delivering these renewal reminders via multiple channels (web, email, mobile) to ensure they are not missed or overlooked? Remember—delivering these reminders within your SLM system is a logical decision, however, not all customers will be visiting that system on a regular basis so supplementing that with email reminders can mitigate against the risk of the customer forgetting to renew their software products.

> Create Incremental Renewal Reminders: are you providing customers with incremental reminders about upcoming renewals at fixed intervals—i.e. 30 days prior to license expiration, 15 days prior and 5 days prior? This proactive approach will help customers better manage their renewal process while positioning your SLM system as a customer retention tool

> Offer an Automated/Self-Service Approach to Renewal: are you streamlining and automating the renewal process for customers to create a simple, effective way to remove friction from the process, reduce the load on your licensing support team and convert a potential business liability into a competitive advantage?

Key UX take away: With a Software Licensing Management tool, the system automatically updates customers when it’s time to renew. Additionally, the ability to offer a role-based portal means everyone within your company has full visibility to account information so inquiries are handled efficiently and effectively.

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Contact Us: For all office locations and contact information, please visit www.gemalto.com/software-monetization

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ConclusionIn today’s experience-centric world, delivering anything less than a world-class user experience is counter-productive. Digitization and consumerization have radically changed the business landscape. Savvy companies understand the value of UX and how that can create deeper customer relationships, improve bottom-line results and create internal, operational efficiencies that reward customers and create competitive advantages for software and intelligent device vendors.

No matter what approach you take to your Software Monetization efforts, keep the following questions in mind as you evaluate your options and shape your vision of the future:

Finally, it’s important to be realistic about your organization’s ability to execute and deliver a well though-out, effective Software Monetization strategy. Consulting with experts who’ve designed, delivered and deployed Software Monetization platforms can go a long way in terms of ensuring that your solution is designed to meet target customer needs and fully integrate with your internal, technical architecture.

About Gemalto’s Sentinel Software Monetization Solutions Gemalto, through its acquisition of SafeNet, is the market leading provider of software licensing and entitlement management solutions for on-premises, embedded and cloud-based software vendors. Gemalto’s Sentinel is the most trusted brand in the software industry for secure, flexible, and future-proof software monetization solutions.

To learn more visit: www.gemalto.com/software-monetization

About Stellar’s UX PracticeStellar is a full-service digital design agency with deep expertise in Software Monetization and Software License Management solutions. Stellar’s UX and Design teams have extensive experience working directly with clients to define, design and deliver world-class user experiences that meet the needs of target customers, internal stakeholders and partners. For more information visit us online: www.stellaragency.com/letstalk information

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1. Are we meeting customer needs in the most effective way?

2. Are we aligning our internal processes with the needs of the customer?

3. Are we constantly tracking, monitoring and analyzing customer data to continually optimize and streamline our internal structure and organization?