Business and Investment Center

The duration of the Knowledge Management (KM) life cycle is a function of the availability of the technologies that enable each phase and of the nature of the information, the difficulty of archiving the information, and other external factors. For example, some business information, such as tax information, must be retained or archived indefinitely to comply with federal, state, or local law. Other information may be critical to maintaining the value of the corporation, such as knowledge of core processes in the company.

Actually each phase of the KM life cycle is associated with issues, input data, support mechanisms, and output data. The difference between the input and output data depends on the processes involved in the particular phase of the KM life cycle. For example, in the archiving process, the output data are indexed according to a standard or controlled vocabulary, whereas in the translation phase, the format of the information is converted to a more useful form.

The issues relevant to each phase in the Knowledge Management life cycle depend on the phase as well as the type of knowledge involved. For example, for highly sensitive medical, legal, or financial information, security is a key issue. In contrast, for information that will be published on the web for general consumption, verifying ownership and copyright may be primary concerns. The primary issues in the KM life cycle, each of which is relevant to different degrees at each phase of the life cycle, include:

• Economics

• Accessibility

• Intellectual property

• Information

• Infrastructure

• Management

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The concept of lifetime customer value is an important factor in determining what your subscription prices are. You will not be able to accurately determine your lifetime member value until your site has been up and running for some time, but using educated assumptions to work out a potential lifetime customer value can be a very beneficial part of your business plan. In simple terms each member’s lifetime value is the average profit they will generate for you during the time they are a member of your site. Each of your members can create revenue for you in a number of ways:

· Initial subscription fee

· Repeat subscription fees

· Product purchases

· Affiliate purchases

· AdSense links

The more complex your site, the more factors there are to take into account. To calculate the lifetime value of a member you need to take the average initial subscription, plus the average revenue from further purchases (these include repeat subscriptions, purchases, click-throughs etc.), multiplied by the average number of repeat purchases in one time period (a month, a year etc.), multiplied by the average number of time periods a customer remains a member. Here is a simple example:

· Your members pay $50 for their one time subscription.

· They spend on average $20 twice a month on purchasing further products etc.

· Your average customer remains a member for 6 months.

· Your lifetime member value = 50 + 20 x 2 x 6 = $290

Don’t forget the power of loyalty. A loyalty scheme will encourage your customers to maintain their membership. Recognizing and rewarding your members’ loyalty is a great way to keep them subscribing to your site. If you choose to follow a loyalty scheme, you can publish details on your site, and you can enable your members to track their progress through your scheme in the same way as they can access their personal details.

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