One of the main reasons why the API Economy is spreading so fast in the industry, is because it is proving to be an effective model to achieve at the same time democratize the software solutions offered to third parties, and do it in a very profitable way for its owner. The monetization of your API is undoubtedly one of your main business goals, but like everything else, you have to be right with the strategy. In this article we give you 4 tips to effectively monetize your API for Health.
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The goal is to ensure that the largest number and variety of potential consumers of your API, subscribe to any of the pricing plans that you included when you published your API in Nubentos.
For this, we must be clear that the API Economy is committed to scalability, and for your API to scale a lot and quickly, you must make it very easy for your potential subscriber.
As we explained in the article where we told you how to monetize your API for Health, you have two ways to monetize your API in Nubentos:
- pay per use, with a very small fee for each request to your API, and that usually increases in the successive consumption tiers that you define; in this case, the monthly rate is 100% adjusted to the actual traffic received by your API.
- quota per tier, with a flat rate for each consumption tier, in which, regardless of whether more or less traffic is consumed within the subscribed tier, the monthly rate does not change.
With this in mind, let’s see those 4 tips to effectively monetize your API for Health.
OFFER A FREE PLAN
It’s a fact: the word “free” has a magnetic effect, and quickly attracts attention.
When you monetize your API for Health, think that the best way that a possible subscriber is willing to pay to integrate your API into their software, is that your own API will convince them.
And for that, nothing better than to offer a sample, that is, a small consumption plan at no cost, with a threshold that is reached too early to be able to use it in production, but large enough to learn how to use your API and understand its potential.
You have the option of leaving the tier open to exceed its threshold, and define a fee per extra request. But this can scare the prospective subscriber.
Our advice is that this free plan is a closed consumption tier. After all, it is not intended to be used in production, so you should not be afraid of the fact that above the consumption limit, your subscriber will receive an error because the limit of the subscribed plan has been exceeded.
But again, make sure that the limit does not prevent your subscriber from knowing your API well and appreciate the added-value it brings, its ease of use, etc.
THINK OF THE LONG TAIL
We all look for great customers. In a traditional distribution model, or in a digital model but not very scalable, it is logical that we are interested only in customers that make the cost of customer acquisition profitable.
But under the distribution model based on the API Economy, things are different.
In Nubentos, your acquisition cost drops drastically. In fact, your acquisition cost tends to zero. So it’s time to think about all those small and medium customers, who also make up the vast majority of the healthcare sector, and facilitate their access to your API for Health.
For this, although it is logical to start from your current price model, you must be able to leave your comfort zone and define ranges of consumption tiers and prices for all budgets.
It is probably not easy for you to sacrifice your margins, but think that those margins have been calculated on costs that do not exist in Nubentos.
With Nubentos you practically have a 100% margin, so do not be afraid to lower prices in a few consumption tiers, not very broad.
Remember that less is more, and in the API Economy, it is key to scaling your API for Health.
OFFER A WIDE VARIETY OF PLANS
The more plans you offer, the more likely a prospective subscriber will find the plan that interests them.
Also think that your subscribers are software companies, developers and integrators, who have among their clients different types of hospitals, pharmacies, laboratories, etc.
If you offer a wide variety of plans, you will be allowing your subscriber to choose even different plans for their different customer segments, with the consequent improvement in their management of development costs.
If you also offer both “pay per use” plans, and “quota per tier” plans, the prospective subscriber can choose the one that best suits their business needs. And for you, it will not involve any extra effort.
CAREFULLY PENALIZE THE EXTRA REQUESTS
For each paid tier, you must bear in mind that you can not define it closed. Nobody is going to integrate your API for Health, risking that in a certain month of high activity, the software stops responding for having consumed your consumption tier.
Therefore you must define a rate for extra request for each request that exceeds the limit of the subscribed plan.
But this rate must be defined carefully. It must be higher than the fee per request from the same plan (if it is a quota per tier, you must calculate it). It must be high enough for the subscriber to consider moving to a higher plan if the usage scenario is kept constant, but low enough so as not to excessively punish an isolated peak of consumption.
Nubentos is a distribution channel for your API for Health that offers you a very high capacity to scale your API. But a wrong monetization strategy can make it fail.
In the API Economy it is time to think about the long tail of the healthcare ecosystem. We are democratizing your solution, and it is in this enormous mass of small and medium-sized companies that there is a huge amount of health population that will benefit from the added value that your product brings.
Remember that if you offer a free sample plan, you will facilitate the engagement of new customers for your API.
And do not forget that in Nubentos we help you to define your monetization strategy. Take advantage of the enormous potential that we put at your disposal for free, and if you have not yet decided to publish your API for Health in Nubentos, do not hesitate and contact us. We will be happy to answer your questions and accompany you on the way.