Businesses across industries are looking at ways to extend and enhance their digital business and service offerings with the help of external APIs. However, for better revenues and digital collaborations, businesses must make the most of their API Marketplaces or in more technical terms the "developer portal", as part of their API management lifecycle.
A well-managed, robust API marketplace is a competitive advantage for enterprises to market their APIs. In this post, you will find three areas that will need your attention when building an API-driven digital ecosystem.
What is API Monetization?
It is the process by which a business can generate revenue by selling their APIs (Application Programming Interfaces). APIs are to be visualized as sellable products. Having well-established, marketable APIs help other developers to access and integrate your data and resources for their specific applications.
Most businesses are excited about monetizing their APIs. A word of caution here is to consider this monetization aspect in the context of your overall business objectives and your digital imperative.
Top three areas to consider for a successful digital strategy:
1. The Pricing
Simply put, APIs reflect the value of your business. Hence, the pricing strategy should be indicative of your overall business strategy. Consider where your APIs fit into the overall market, to identify the right pricing strategies.
Figure out whether you are using the APIs to generate awareness and increase user adoption, or if you are focused on boosting revenues. Depending on your goals, you can work out your enterprise API strategy, thereby helping to figure out the ideal pricing strategies.
Most companies use a mixture of different pricing strategies like:
Other pricing models include open-share, cost-savings, etc. Before you publish an API, you need to consider the pricing strategy you want to adopt.
2. Effective API Management – the Cornerstone for a successful Digital initiative
Generally, most businesses first publish APIs, then catalog and display these APIs using a developer portal. By doing so, the publisher of APIs can provide access to developers to explore the portal to find and discover appropriate APIs. The portal contains several APIs, and developers can filter APIs based on their type, category, and division.
An API management system is the foundation for a Digital Marketplace and consists of the following components:
Successfully building and implementing monetizable APIs, requires a strategic approach. It needs all the above components in place, along with the right organizational practices to make it a functional and profitable initiative.
3. Focus on API Analytics, expanding your Digital Ecosystem
Once you have figured out the basics of API management, you need to start growing your digital ecosystem. Having a robust marketing plan around your revenue-generating APIs is a must-have to bring awareness and increase usage.
API analytics help you identify the best performers, find out how partners and customers are interacting with your APIs. Use it extensively to gain insights so you can Upsell and cross-sell the right products at the right time.
By deliberating on the three key areas listed here, you can start building an effective digital strategy which drives expansion, creates new business opportunities, and helps you increase revenues.