What Would You Pay $1 Per Month For?
1 January 2020
I follow analysts in the industry regularly, both topical to our domain and those that have a financial focus in the applications markets. One of my favorites is Scott Berg of Needham & Company out of New York. His latest on 11/30/15 was titled "Industry Checks Indicate 3Q Strength More about Replacement Cycle than ACA".
Now I was pleased to hear that Scott sees strong market results as a fundamental pillar in our industry (I do make my living here), but buried in that note was a very interesting tidbit. Namely that the new reporting requirements that the ACA is generating around compliance such as forms 1094-C, 1095-C and maybe even the additional 1095-B are driving companies to purchase these from their providers for a fee. If they are required to do so, this could be as much as $1 per employee per month according to Scott’s research. Scott sees this representing a 3% - 5% revenue growth driver for our market in 2015.
All well and good, and I am glad to hear that the market is rapidly adapting to this new requirement, but this really got my mind churning. What else might be an "optional subscription" in the future? After all, there is tremendous innovation going on in the Platform as a Service (PaaS) market, Cornerstone Edge is a great example. According to GigaOM Research, the PaaS market is predicted to reach more than 20 billion dollars in 2015.
Manufacturers have rapidly been adopting this mindset as well, according to Michael E. Porter of the Harvard Business Review in "How Smart, Connected Products Are Transforming Competition". Extended capabilities and the ability to provide this wrapper of services is not just a market opportunity, it is how you develop that deep relationship with your customer that keeps them with you. Just like our industry, the "hardware" may be commoditized, it is the software and services that will be their differentiator offered through this concept of a system of systems.
Cornerstone has long understood this approach, software which uses a common baseline – always has and always will, but can be considered purpose-built at the same time. Cornerstone has always coupled this with a set of human services which don’t just complement but literally extend the value our customer receives. Software AND people, a "system of systems" who help you #realizeyourpotential
A La Carte Services for HR
So, I started to do a thought experiment (just my thoughts) about where an a la carte approach may make sense to an HR customer in our industry. Not just additional software but expertise that I might want to purchase from my supplier. These aren’t premium services in the classic sense but embedded services which I might "subscribe to". This would presuppose things that I might not have even contemplated a few years ago. Thoughts that spring to mind include:
- Value Realization (baseline and point in time measuring of improvements)
- Benchmarking myself deeply against my industry peers in specific process (step by step)
- Internal net promoter scoring through point in time asks as my employees use the software
- Coaching requests embedded mid-learning where one could get advice real time
- Access to a library of libraries of user contributed content
- Review of the output that my predictive analytics is providing to ascertain what is "next"
Cornerstone developed Edge to open our platform to innovative ideas which we may never have thought of, those ideas can take a myriad of approaches; products, wrappers of services or just plain human contact. Pricing models for this, "buckets" versus "by the drink", remain to be sorted out, we’ll leave that to the market to determine – but I would leave you with this question ...
"What would you pay $1 per month per user for?"