Strategy
Revenue Models
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Designing Revenue ModelsProduct leaders must focus on revenue models as much as the product and customer experience, as they contribute to the ability to create a flywheel for businesses, according to Giff Constable. How a company makes money can also create or limit customer behavior. Constable refers to Axial, a fintech marketplace, as an example, and how its revenue model affected its ability to create efficiency for buyers and sellers. Examples of revenue models include: • One-time purchases • Rentals/subscriptions • Advertising • Pay per use/transaction
MBA Mondays: Revenue ModelsFred crowd-sourced a somewhat exhaustive list of revenue models, and digs into each one with its own article: • Advertising – the service is free to use, marketers pay to reach your users via advertising • Commerce / one-time transaction – sell something to your users, keep some or all of the proceeds • Subscription – charge your users monhtly or annually for the opportunity to use your service • Marketplace / Peer to Peer – connect people together in a network, take a small piece of the activity that ensues • Transaction Processing – settle transactions and take a small piece of the transaction for doing so • Licensing – charge users once upfront for the opportunity to use your technology • Data – sell the data your service generates