what is revenue model?
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What is Revenue Model ?
• key component of a company's business model.• It identifies which revenue source to pursue, what value to
offer, how to price the value, and who pays for the value.• With a clear Revenue Model a business can focus on a target
audience, fund development plans for a product or service, establish marketing plans, begin a line of credit and raise capital.
• A revenue model is an exchange of value.
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Point to Remember :-
• Your customer may not be your consumer• Revenue model does not equal business model• Revenue model impacts all areas of business(brand,
sales, operations, finance).• Each model has advantages and disadvantages.
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How to Develop Revenue Model :-• Identify target customer • Determine value proposition• Evaluate revenue model options• Select revenue model• Adapt and adjust
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Types of Revenue Models :-• Advertising model - Examples include Google and Taobao Mobile
applications also use this specific revenue model to generate revenues. By incorporating some ad space, many popular apps such as Twitter and Instagram have strengthened their mobile revenue potential after previously having no real revenue stream.
• Commission model - Brokerage companies or auction companies often use it as they provide a service as intermediaries and generate revenue through commissions on the sales of either stock or products.
• E-commerce model
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Types of Revenue Models :-• Fee-for-service model - unlike in the subscription model, the
business only charges customers for the amount of service or product they use. Many phone companies provide pay as you go services whereby the customer only pays for the amount of minutes he actually uses.
• Licensing model - the business that owns a particular content retains copyright while selling licenses to third parties. Software publishers, Media companies use this model.
• Subscription model - the business provides a product or service to a customer who in return pay a pre-determined fee at contracted periods of time to the business.
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Types of Revenue Models :-
• Production model - the business that creates the product or service sells it to customers who value and thus pay for it.
• E-tail - an increasing amount of retailing is e-tailing, done online using electronic payment and delivery via a courier or postal mail.
• Wholesale - it is the sale of goods to anyone other than the end-consumer.
• Markup model - the business buys a product or service and increases its price before reselling it to customers.
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Types of Revenue Models :-• Freemium model - the two aspects of the business model: "free"
and "premium". It has become a highly popular model, with notable success.
• Nagware - type of shareware that persistently reminds (nags) the user to register it by paying a fee.
• Donationware - a licensing model that supplies fully operational unrestricted software to the user and requests an optional donation be paid to the programmer or a third-party beneficiary.
• Shareware - users are encouraged to make and share copies of a software product, which helps distribute it.
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References :-
• https://www.cmu.edu/cie/images/connects/workshop-material/revenue-models.march-2015.pdf
• http://www.1000ventures.com/business_guide/revenue_model.html
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ThankYou!!!