REVENUE MODELS

Without sales a business can’t function

The Revenue Model has to be Responsive, Agile, and Fairly Robust
 SHOW ME THE MONEY
 Its about the amount of money business generates from services and
products it sells

WHY GENERATE MONEY?

 It’s about earning revenue, generating profits, and producing a
superior return on invested capital
 Revenue models & pricing tactics
Customers pay for a solution to a problem.

Be specific! Tailored strategies Fail, learn, and iterate

 Focus first on solving a pain points
Tactic: Lure your customer in with free + lock-in.
REVENUE MODEL STRUCTURE
Annual Subscription Fee

Plain Subscription
Physical Store-
P/S
Service Fee (One-off)
Pay as you go
Digital Store -
P/S

Advertisement
based
Advertising

Commission 4
service
Commission
Revenue Model

X
Revenue - Expenses = Profit
Revenue and sales - expenses and costs
TYPE OF REVENUE STREAMS
Revenue streams can be divided into two categories:

These revenues are earned from the customer making a one-time payment
for the product or a rendering of a service.

1. Transaction Revenue

The recurring revenues are earned from consistent

ongoing payments rendered to the company for
Recurring Revenue
either the delivery of the value proposition of after
sales care for the customer.
 CUSTOMER ACQUISITION COST

Customer retention is the best indication of revenue. Don’t worry

about making money until you have costumers staying.
 Drivers of Revenue Growth / Top Customer Segments

Retail 18%

Business Services 10%

Technology 8%

Banking/Insurance/Finance 7%

Manufacturing 6%
Make sure the Cost to Acquire a Customer which is how much they
are willing to pay your for S/P is less than the monetization Life Time
Value of customer.
 WHICH REVENUE MODEL
No matter which model you start with remember that is just a….

• Do you have access to unique • Do you have unique content

products and services? people are willing to pay for?
• Better price than others? • On premises/ online as they both
sell goods that help speed the
revenue stream.
 REVENUE STREAMS
Strategies a company uses to generate cash from each customer
segment
Asset Selling Products (Car, Store, #2
#1 Sales: Computer or Property)

Ownership stays with you Multiple Revenue Streams

Usage Fee:
Multiple Customer Segments (Hotel, Airlines, and Amazon)

Subscription
: Monthly/Weekly (SAAS/GYM)
Fee

Leasing: Fee 4 temporary access/ usage

Professional
Support, Training, Consulting
Services

Intermediati Deals finalization between 2

on Revenue more individuals/transaction
$6.6 B
Fee paid by brands and companies
Advertising
 • What values and
PRICING MODEL features are
your customers
care about?

• How do
customers pay?
•

• Products/service
s today

• How much are

they paying
currently

• The tactics used

to set the pricing
in each
customer
segment
Day 2
Continued
HOW DO WE PRICE THE PRODUCT?
PRICING MODELS WORDS WE USE IN THE PLACE OF PRICE
Fee
• Product-based pricing Commission
• Competitive pricing Subscription
• Volume pricing Toll
• Value pricing Interest
• Portfolio pricing Rent
• Subscription Tax
• Time/Hourly Billing Shipping
• Leasing
MARKET REVENUE FORECAST

New Market Sales Curve Existing Market

“Direct” revenue models
Sales: Product, app, or service sales
Subscriptions: SAAS, games, monthly subscription
Freemium: use the product for free: upsell/conversion
Pay-per-use: revenue on a “per use” basis
Virtual goods: selling virtual goods
Advertising sales: unique and/or large audience
“Ancillary” revenue models
• Referral revenue: pay for referring
traffic/customers to other web or mobile sites or
products.
• Affiliate revenue: finder’s fees/commissions
from other sites for directing customers to make
purchases at the affiliated site
• E-mail list rentals: rent your customer email lists
to advertiser partners
• Back-end offers: add-on sales items from other
companies as part of their registration or
purchase confirmation processes, or “sell” their
existing traffic to a company that strives to
monetize it and share the resulting revenu3
 REVENUE CHANNELS
Does 20% of your channel drive 80% of your revenue?

Channel Channel
Partners Revenue

Social Drives
80%
Or
20%
Physical
Or 20%
Affiliate 80% Drives
 Targeted
Buyers
(SEO, Blog &
Social Media) Landing Pages
(conversion-
Traffic
optimized)

Typical g ROI Managed Funnel

$2,500/month Revenue Generated Segmented Database

36 months Contract Term
$90,000 Contract Value - Suspects
50% Gross Margin - Prospects
Leads
$1,250/month Gross Profit - Opportunities
$2,500/month Marketing Expense
2 months Payback Period
$42,500 Return on Investment
$$$ Incremental Revenue
 REVENUE CHANNEAL ENGEMENT

We begin with deep discovery, content development and campaign design

Then you start building traffic, optimize conversion, nurture buyers and drive deals
Revenue solutions
By 2017, a company’s digital strategy will ultimately influence at
least 99% of a consumer’s discretionary spending. What can Data
Driven Marketing do? %99

 Integrate digital and traditional information

 Understand consumer actions across multiple channels
 Engage with customers with relevant, consistent experiences,
regardless of channel
 Send customers personalized offers based on behaviors
 Provide marketers with rapid insights that reveal who to contact, when,
and with what offer
 Reduce the costs of point solutions