Earning income, producing profits, or generating higher Returns on Investment is a challenge best solved by working smart, not hard. If you thought money was what makes the world go round, you were wrong: it’s revenue models. Let’s get cracking on which one is the right fit for you.
One of the most common questions we get at Board of Innovation is ‘How can my company generate new revenue?’ Armed with the right knowledge, anyone can unlock new revenue models that have a direct, substantial impact on their bottom line. It starts with having the right toolkit.
LinkedIn is a business and employment social networking site. It’s a great place to find potential employees or employers, but unless you set your profile to private, you will be able to see who’s looking at your profile, and they’ll know when you look at theirs. For the privilege of browsing anonymously, users and companies can pay for LinkedIn Premium.
Freelancing can be risky business, but Broodfonds (Dutch for ‘bread fund’) takes some of the worry away while connecting users to a community of people in the same boat (or bakery?).
Each ‘bread fund’ is a community of 20-50 entrepreneurs who each pay a premium. When a person in the fund is ill for a long time, the funds will be used to help them out. You choose how much you want to contribute, but the more you contribute, the more you get should you get ill yourself.
Bugattis are expensive as it is, but the La Voiture Noire ups the ante. The company will only be making one of them, so while other cars depreciate in value, the exclusivity of this model means it will only go up over time. In that way, it’s more like art than a vehicle.
Zalon by Zalando
Do you find shopping tedious? Do you end up wearing the same thing all the time? Personal shopping services like Zalon by Zalando take the pain away. They’ll match you with a stylist who will pick complete outfits for you. The completed look will be delivered to their door and you can return what you don’t like. The service is free, but you pay for the clothes, of course.
Some people love surprises, and they’ll pay for the experience. Srprs.me capitalizes on that. If you tell them your preferences (the dates, where you’ve already been, what kind of weather you like), they will plan a holiday for you! You won’t find out where you’re going (including the country) until you get to the airport.
When referring your customers to another company, you are driving their sales. Depending on the product and program, 5-10% of the product price is a good indicator of the lead or sale fee you’ll receive.
These days, it’s hard to trust product reviews. The poster could secretly be getting paid to promote a dodgy product. Wirecutter solves the problem. The company tests and independently reviews products from Amazon. In exchange, they simply ask that you purchase said products using their affiliate link so that they can get paid.
Sometimes you want to target a user segment that simply can’t afford your product in any way. The decision to make another segment pay double has been made for charity: laptops, flash lights, etc.
Pampers + Unicef
Pampers is not the cheapest diaper brand on the market, but every year they incentivize users to buy their product by partnering with UNICEF. For each pack sold during their annual “1 Pack = 1 Vaccine” campaign, Pampers funds the purchase of a life-saving tetanus vaccine to ensure pregnant women and newborns in need are protected. 300 million vaccines have been donated to date and because their target audience (new parents) changes all the time, the campaign still feels fresh after almost 14 years.
GoFundMe crowdfunding platform that allows people to raise money for events ranging from life events such as celebrations and graduations to challenging circumstances like accidents and illnesses. The platform is free to use in most countries. Campaign donors may choose to give GoFundMe a voluntary tip during the donation process to support the platform.
Customers choose the price for a product. It works well with high fixed costs and low variable costs, and when there is a long-term customer relationship (e.g. services like restaurants, museums, or electronic products like music, games, or software)
Simbi is an online bartering platform. The idea is that everyone has a service that they can offer and Simbi presents them with the opportunity to trade that service for something that they want or need, in exchange for credits. The credits system leaves open the possibility that Simbi could charge users to buy credits if they don’t want to put up a service to swap.
Rehashing is a way to swap your clothes with others. Others can see your items and offer you their items in exchange for something you have that they like. Rehash makes money with their “Verified Rehasher” program where users pay a one-time $5 fee to get verified. Once verified they become more trustworthy and have an easier time making trades.
A subscription is a pricing tactic with which you sell access to a product or service for a certain period of time. The service can be the periodic delivery of a product (newspaper), using a cloud-based software, being able to call assistance, etc.
This is a results-based pricing tactic: some products are only used a limited amount of times (a car is idle 97% of the time). Paying only for the time you need a product/service creates flexibility and increases the value per use.
This involves offering a product/service/right for sale before it is fully developed. This is mostly used as a means of funding or to receive proof-of-customer interest before launch. This should always be combined with another pricing tactic!
Revenues are spread over the lifetime of a product. After paying a flat fee, customers have recurring expenses they can’t refuse (e.g. razor blades, coffee pads, updates of GPS devices, etc.). Similar to the freemium model.
Sony and Microsoft also employ the razor-blade model with their gaming consoles. They’ll even sell their consoles at a loss, earning their money back when the customer buys games. Game developers have to pay royalties to allow them to publish the game on consoles.