Intangible capital is monetized in a number of ways. In all cases, the company’s brand and reputation is a crucial foundation that influences the success of monetization efforts. Avenues to monetization that we help our clients explore include:
SELL KNOWLEDGE PRODUCTS
Many knowledge products are provided free of charge in today’s world. Yet, there are also many opportunities for selling reports, books and software. Pure knowledge has next to no marginal cost which makes for a profitable business-as long as there is demand and you have priced the product appropriately. Are you selling the right products at the right prices? What should you sell versus give away
LICENSE KNOWLEDGE PRODUCTS
Knowledge products can also be monetized by licensing them to competitors or partners to use in their own businesses. What makes a good product for licensing? One that meets market needs. One that enjoys intellectual property protection such as patents, trademarks and copyrights. And one that provides clear monetization alternatives to the licensee.
Services are basically bundled intangible capital. When someone buys a service, they are paying for some combination of competencies, processes and relationships. Pricing models can link to the process itself, the time of the employees supporting the process or even access to a relationship (think advertising). The price of a service can be maximized when it connects directly to the customers needs and they can “see” the benefit. Is the value of your services clear enough to your clients to demand a premium price?
Intangible capital is critical to the creation and value of products. The story of manufacturing in recent decades has been one of process innovation and improvement. Significant value also comes from having the best perceived design (think iPod), as long as the customer can “see” the value. The same question applies here: Is the value of your services clear enough to your clients to demand the best price?
BUILD CORPORATE VALUE
Corporate value is created when all of the above monetization approaches lead to profitable growth. Continued value is dependent on the buyer or analyst’s estimation of the likelihood of the continuation of profitable growth. This is a smaller leap of faith if they can see a physical production process, such as a factory. It is a bigger leap for an intellectual capital business. The value of many companies is discounted because buyers and analysts cannot “see” the underlying path to profitability. What information could/should you provide to maximize your corporate value?