The motivation behind extending your Business and generating more revenue is the only aim of extending online business. The ability to acquire customers distinguishes a successful business from a falling one.

In this post Matrix Marketers, a software development company explains five ways to increase business revenue by offering an API that third-party developers can use to build apps and consume information.

These are not the typical API business models. Instead, these are ways to make money with an API. Let us start by showing how you can increase your business revenue by acquiring more customers using an API.

1. As a Customer Acquisition Channel

As API adoption continues to grow. The perspective of using the Apis is changing. Most of the websites acquire new customers through referral traffic and affiliates, APIs need apps to do so. As the number of developers increases who use your API, the more third-party applications will be built and consumed. By considering this correlation to referral marketing, we can infer that APIs have the potential to provide around 26% more Customer Lifetime Value.

2. As a Way to Increase Retention

The success of your business is dependent on the CLTV ratio. It is a way to calculate how much profit each customer will generate over time. Retention is the number one way of increasing this key performance indicator.

As the use of the API increases, you share will have the proportional hike in the software market. After achieving critical mass, it will be hard for competitors to unseat you, or for those third-party app developers to migrate to another API provider. The user would always like to stick with you rather than moving here and there.

Though the effects are not as impactful, increasing ARPU also increases CLTV. ARPU can be increased easily without increasing overall prices to sell more to existing customers. An API can also help you do that, as you will see next.

3. As an Upsell Driver Interesting API integrations

The advanced features of APIs are available only after the purchase. To employ this strategy, your business must have a large user base and be well known in the market. The danger is that users might migrate to a competitor that offers the same features for free. The same features can be offered for free by the new market entrants.

4. As an Affiliate Channel

You have got the option to turn your users into the affiliates while they integrate their app with the API. An improvement by applying affiliate marketing can be achieved by increasing CLTV by nearly 8% compared to average acquisition methods. By making use of APIs to drive demand for other products has significant potential. Imagine if just one third-party app is successful in this. The number of customers will, similarly to what you would see on your website from a devoted affiliate.

In this way, third-parties help you with app development and co-marketing and even pay you to drive new customers to them.

5. As a Distribution Channel

If your business depends on the number of people that get access to your content and interact with it, you will want to maximize its distribution. Companies like Expedia and Booking follow this strategy and are having great success. When you are searching for a hotel on your favorite Web site, you are often served up results obtained from a bigger vendor’s API. These large providers take advantage of the fact that smaller companies do not have the resources to manage big data sets.

Conclusion

An API can definitely help you increase your revenue. The models defined in this post may or may not use API, but hopefully, you can see that using an API in one or more of these ways will maximize your chances of pushing your business’ top line to the next level. As you think about how to apply these, remember that APIs can be used:

Improving customer retention rates: To increase the customer retention, CLTV is the best way.

For upselling: You can create demand for higher-priced features by making them available through an API.

In affiliate marketing: you can either turn third-party developers into affiliates of your app, become an affiliate yourself, or both. In the end, you will always make more money.

To increase distribution: By making use of third-party apps to obtain your content or products, you are ensuring to increase your profit.