The document discusses key elements of developing a revenue model, including revenue sources, customer value, pricing strategies, target customers, and capturing revenue. It emphasizes that a revenue model is a framework for generating revenues and highlights important factors like revenue sources, the value provided to customers, determining appropriate prices, identifying who will pay, and methods for capturing revenue, such as subscriptions, licensing, advertising, and transactions. The goal is to develop a model that positions the business in the profit zone by balancing these factors.

1. REVENUE MODEL
BUILDING YOUR BUSINESS
Guillaume Balas - guillaume@tingslabs.com

2. REMEMBER?

6. -USD 120,000 LUMP SUM
-USD 150,000 LTV (4 YEARS)
-USD 70,000 LUMP SUM
USD 270,000 REVENUE
USD 225,000 SALARY COST (5 MAN-YEARS)
MIN USD 300,000 OPPORTUNITY COST
LOTS OF HEADACHES AND SUFFERING
USD 525,000 "LOSS"
1 “BIG" BRAND NAME
-VALIDATES TECHNO
-RAISE BRAND AWARENESS
-HELPS (A LITTLE) SALES

7. FOCUS ON YOUR
REVENUE MODEL!

8. WAIT !!!

9. REVENUE
SOURCE
A REVENUE MODEL IS A FRAMEWORK FOR GENERATING REVENUES

10. REVENUE
SOURCE
A REVENUE MODEL IS A FRAMEWORK FOR GENERATING REVENUES
VALUE

11. REVENUE
SOURCE
VALUE
PRICE
A REVENUE MODEL IS A FRAMEWORK FOR GENERATING REVENUES

12. REVENUE
SOURCE
PRICEPAYER
VALUE
A REVENUE MODEL IS A FRAMEWORK FOR GENERATING REVENUES

13. REVENUE
SOURCE
PRICEPAYER
VALUE
A REVENUE MODEL IS A FRAMEWORK FOR GENERATING REVENUES

14. REVENUE SOURCE

15. REVENUE MODEL
Product Service
Production
Commerce

16. VALUE

17. REVENUE MODEL
▸ Customer value is the value received by the end-customer of a product or
service.
▸ Customer value is conceived variously as utility, quality, benefits, and
customer satisfaction.
▸ B2B Examples (not exhaustive) of value provided by a product or service:
REDUCE COSTS
(DIRECTLY, INDIRECTLY)
INCREASE REVENUE
(DIRECTLY, INDIRECTLY)
IMPROVED BRANDING
(DIRECTLY, INDIRECTLY)

18. REVENUE MODEL
▸ Customer value is the value received by the end-customer of a product or
service.
▸ Customer value is conceived variously as utility, quality, benefits, and
customer satisfaction.
▸ B2B Examples (not exhaustive) of value provided by a product or service:
INCREASE # OF SALES
(VOLUME)
INCREASE ARPU
REDUCE COSTS
(DIRECTLY, INDIRECTLY)
INCREASE PERF.,
RELIABILITY
INCREASE SECURITY
INCREASE AGILITY
INCREASE REVENUE
(DIRECTLY, INDIRECTLY)
REDUCE PURCHASING
COSTS
IMPROVED BRANDING
(DIRECTLY, INDIRECTLY)
CSR ENVIRONMENTAL
FRIENDLY
CUTTING EDGE,
INNOVATIVE
FRIENDLY,
ATTRACTIVE

19. PRICING

20. REVENUE MODEL
PRICING IS HARD TO DO
AND EASY TO IGNORE.
Jay Goltz, “The price of Bad Pricing”, July 6th 2011, NY Times

21. REVENUE MODEL
AT LEAST MORE THAN 15 METHODS !
COST-PLUS / MARKUP
FULL COST
MARGINAL COST
TARGET RATE OF RETURN
COST DEMAND
SKIMMING
PENETRATION
WHAT THE TRAFFIC CAN
BEAR
VALUEDIFFERENTIATED
CUSTOMER SEGMENT
TIME
LOCATION
PACKAGE / FORM
PREMIUM
DISCOUNTED
PARITY
COMPETITION

22. REVENUE MODEL
COST-PLUS / MARKUP
PENETRATION
CUSTOMER SEGMENT
PACKAGE / FORM
DISCOUNTED
PARITY
COST DEMAND VALUEDIFFERENTIATEDCOMPETITION
FULL COST
MARGINAL COST
TARGET RATE OF RETURN
SKIMMING
WHAT THE TRAFFIC CAN
BEAR
TIME
LOCATION
PREMIUM
NO "ONE-SIZE-FITS-ALL SOLUTION"
example

23. REVENUE MODEL
example

24. REVENUE MODEL
#1 - Your price must be enough higher than costs to cover
reasonable variations in sales volume
#2 - You have to make a living
#3 - Your price should almost never be lower than your costs
or higher than what most consumers consider "fair"
MAKE EDUCATED GUESSES. EXPERIMENT.
ITERATE.

25. PAYER

26. REVENUE MODEL
Source: http://fakecrow.com/free-persona-template/

27. REVENUE MODEL
▸ 1 persona will have a different role depending on the company/sector
▸ Personas will evolve over time as your company, product(s)/service(s) or market
evolve and mature
▸ Your company will deal with multiple personas
decision maker persona evolution over time:
1. decision maker
2. economic buyer
3. recommenders
4. influencers
5. end users
API DEVELOPER INFRASTRUCTURE SENIOR SYS ADMIN
PRODUCT MANAGER
BUSINESS DEVELOPMENT
▸ 2 personas may have conflictual stated needs
Source: http://www.spikelab.org/blog/persona-development.html

28. REVENUE MODEL

29. ALWAYS PUT YOUR
CUSTOMERS FIRST

30. April 2014
Source: https://saatchixlondon.wordpress.com/2014/04/30/the-best-brand-experiences-make-it-personal/
“Dear Ms. Avins, your wish is my command … within reason. XO Jenna”
Creative Director Jenna Lyons

31. HOW TO CAPTURE REVENUE?
BUT ONE THING IS MISSING…

32. REVENUE MODEL
CAPTURING REVENUE
COMMERCE AND RETAIL
SUBSCRIPTION AND USAGE FEES
LICENSING
AUCTIONS AND BIDS
ADVERTISING
DATA
TRANSACTIONS / INTERMEDIATION
FREEMIUM
AND MORE…

33. REVENUE MODEL
REVENUE MODELS BASED ON "FREE"
Source: Chris Anderson, "FREE"

34. PROFITS
IDEALLY, TO MAKE

35. REVENUE MODEL
PROFIT
ZONE
THE PROFIT ZONE
▸ Customer Value (Value): This Profit Factor revolves
around how much value your product/service
generates for your customers. The greater the value,
the higher price you can charge.
VALUE
DELIVERY
PRICE TOUCH
▸ Pricing Strategy (Price): This Profit Factor revolves
around your pricing strategy – either premium pricing
with lower sales volume vs. discount pricing with
higher sales volume.
▸ Marketing/Sales Performance (Touch): This Profit
Factor revolves around: (a) how effectively you can
reach prospects/customers; and (b) how cost efficient
you can do this.
▸ Production Performance (Delivery): This Profit Factor
revolves around how effective (quality) and efficient
(cost) your company is able to deliver your product/
service and operate the business.
Source: http://www.gpsexecs.com/in-the-zone-profits/

36. RECOMMENDED RESOURCES
SOME HELP

37. REVENUE MODEL
▸ https://hackpad.com/Web-And-Mobile-Revenue-Models-final-EgXuEtSibE7#:h=Commerce
▸ http://entrepreneurs.about.com/od/salesmarketing/a/pricingstrategy_2.htm
▸ http://www.womenunlimitedworldwide.com/pricing-strategies-the-top-10-mistakes-you-dont-want-to-make/
▸ http://blog.sotechmedia.com/how-much-can-bad-pricing-cost-you/
▸ http://www.spikelab.org/blog/persona-development.html
▸ fakecrow.com/free-persona-template/
▸ http://www.bmnow.com/revenue-models-quick-guide/
▸ http://www.bmnow.com/revenue-models-quick-guide/
▸ http://www.freemium.org/
▸ http://www.gpsexecs.com/in-the-zone-profits/

38. THANK YOU !GUILLAUME BALAS - GUILLAUME@TINGSLABS.COM