I’d like to open this blog post with a question stemming from the results of our major marketplace survey of the French market with APIthinking: 37% of respondents say they have defined a monetization model for their digital products.
The question of API monetization goes back at least a decade now, and I’m very surprised, as an observer of this market since 2012, at this 37% figure.
It should be pointed out that, of the 37%, a good third has defined a monetization model based on free access. Despite this, the fact remains that this figure seems a little far from reality.
For the past four years, we’ve been encouraging our customers not only to identify monetization models, but also to study the value of APIs and digital products more broadly.
In fact, we’ve had a lot of feedback from customers who have found either indirect monetization or service-based monetization opportunities.
An example of indirect monetization can be illustrated by the case of DBS (Bank of Singapore), which has opened up its relationship onboarding (a process that can cost several hundred euros) to the fintech ecosystem. The bank saves on this costly step by opening up free APIs to its partners, thus making an indirect gain with each onboarding.
When it comes to enhancing the value of services, some banks, for example, open up their services free of charge so they can offer their customers the innovations provided by the ever more ingenious fintech ecosystem. This innovation helps to reduce customer attrition.
In the industrial sector, enterprises like Bosch show that opening up APIs, even free of charge, can be a real win-win situation. This openness has enabled Bosch to gain a unique position: by exposing APIs for the electric motors of their bicycles, startups can create accessories and services that form an ecosystem which builds customer loyalty (geolocation, training, sports, connection to Strava, etc.).
So, it’s vital to think of all the possible ways of adding value when building your API strategy, rather than stopping at a simple exploration of monetization, which could quickly show its limits and hamper any project.
From API platform to the Digital Service Marketplace – are you ready?