What is a revenue stream? What are the two types of revenue streams? A revenue stream is simply a source of profit for a business—where the money comes from. Defining your revenue streams is one of the key elements of designing a business model for your company. There are two types of revenue streams in Business Model Canvas: 1) profits from single transactions, and 2) profits from ongoing payments such as subscriptions. We’ll discuss both of these elements below.
What is the long-tail business model? How does the long-tail business formula differ from the conventional business wisdom? The long-tail business model is where a business sells a wide range of niche products/services instead of selling large numbers of high-demand products/services. The long tail formula seems to fly in the face of the common advice to focus on one niche product (in other words, to prioritize one thing and do it exceptionally well). Further, expanding your offerings according to the long tail formula could be the key to disrupting the market and winning big. In this article, we’ll take a
What is the freemium business model? How do freemium products generate revenue? The freemium business model is where a business gives away a limited suite of services for free and charge for a premium or additional features. The revenue from paying customers supports the costs incurred by the free users. In this article, we’ll take a look at the concept behind the freemium business model and explain the difference between freemium and free trial.
What is the bait-and-hook business model? How do bait-and-hook businesses make a profit? The bait-and-hook business model is where a business sells the main product (for example, coffee machine or printer) at a low cost in order to generate profit by selling complementary products/refills/top-ups (for example, coffee capsules, printer ink) at a high price. In effect, businesses choose to initially make a loss in the hope of making a future profit from ongoing purchases. In this article, we’ll take a look at the concept behind bait-and-hook business models and how they generate revenue.
How do you communicate with your customers? Does your business have a customer relationship strategy? Customers expect businesses to understand the relationships they want and to respond appropriately. However, despite spending billions trying to understand customer relationships, businesses often don’t understand these expectations and end up undermining their interaction efforts. There are two steps to designing your customer relationships strategy: 1) define your touchpoints, and 2) define your interactions. We’ll discuss both of these concepts below.
According to marketing experts Al Ries and Jack Trout, how should you get started with a competitive marketing strategy? What should you consider before you position your product? In Positioning, Al Ries and Jack Trout lay out a competitive marketing strategy to position your product, your brand, or yourself in a crowded marketplace. They urge you to consider three things before you execute your strategy. Continue reading for marketing insights from Al Ries and Jack Trout.
What is a free business model? How do companies finance the provision of their product/service for free? A free business model is where one or more customer groups receive value at no cost (e.g. a software company offering a limited suite of features for free). Free users are always financed by another part of the business model or by another customer segment. In this article, we’ll look at the different types of free business models, and how they generate revenue.
What is the open business model? How do companies with open business models create value for their customers? An open business model is where a business creates value through collaboration with external partners. There are two main ways to do that: 1) integrate their internal resources with the partner, or 2) supply their resources for a fee. We’ll break down both of these principles below.
Have you read the marketing book Positioning? What wisdom does it hold for you and your business? In the book Positioning: The Battle for Your Mind, Al Ries and Jack Trout discuss what it means to successfully position your product in a competitive marketplace. They also share three guidelines for influencing how your customers perceive your product. Keep reading to learn these marketing concepts presented in the book Positioning.
What is the advertising revenue model? How do digital businesses make profits from advertising? The advertising business model is where a business makes revenue from selling advertising space to other businesses. This model is particularly common amongst digital platforms and popular websites because this model requires high traffic volume to generate meaningful revenue. In this article, we’ll take a look at the advertising revenue model and how it generates revenue.