Revenue Streams

• 1. Understanding Revenue Models

  2. Key Revenue Model Questions

  3. Establishing Pricing

  4. User versus Purchaser

  5. Forecasting based on the market (New, Existing, Re-segmented)

In this module, we will look at the various ways we are generating revenue, establishing a price, understanding the difference between the user and the purchaser, and how to forecast based upon the type of market we are entering. Lastly, we will be using mind maps to create a visual representation of our revenue models.

Watch the following videos and answer the questions to prepare for class discussion, online discussion (FB Group), and for your quiz. Each of the videos are between one to three minutes in length. While they may be short, it will take you some time to get through all of the videos and answer the questions.

All titles listed in GOLD represent the videos you will need to watch for the first quarter. It is recommended to watch and answer the questions prior to class to help facilitate instruction and develop a deeper understanding. You may choose to watch all of the videos listed below or the entire library in Udacity. See the course schedule for instruction dates.

Videos to Watch

Lesson 9.1 – How do you make money

• Revenue model

• Pricing

Lesson 9.2 – Common Mistakes

Lesson 9.3 – Revenue Streams and Price

Think About It: Revenue Streams and Price

• What is a revenue stream?

• What is pricing model?

• What value are customers willing to pay for?

• How do customers pay for products today?

• How much are they currently paying?

Lesson 9.5 – Direct and Ancillary Model

Think About It: Give three examples of each and explain (do not use the examples given in the video)

• Asset Sale

• Usage Fee

• Subscription Fee

• Renting

• Licensing

• Intermediation Fee

• Advertising

Lesson 9.7 – Pricing

Each revenue stream may have different pricing tactics.

Fixed pricing

• Cost + mark-up

• Value priced (based on customer segment features)

• Volume priced

Dynamic pricing

• Negotiation

• Yield Management

• Real-time markets

• Auctions

Think About It: Pricing

• • Using our Macaron business, write down how we could utilize each of the different Fixed pricing and Dynamic Pricing strategies.

Lesson 9.9 – Common Startup Mistakes

• Focus on value to customer segment, not the cost.

Lesson 9.10 – Market Types and Pricing

Lesson 9.11 – Single and Multi Side Markets

Think About It: Single and Multi Side Markets

• What is the difference between a single and a multi-sided market?

  • Think about one of your favorite brands or companies. Give an example of how they use a single and a multi-sided marketing strategy.

  • Think of a second company and give an example of how they use a single and a multi-sided marketing strategy.

Lesson 9.12 – Revenue First Companies

Lesson 9.13 – Market Type and Revenue

Think About It: Market Type and Revenue

• When forecasting, why do we want to be careful about our initial success?

• What is our goal when entering an existing market?

• What is our goal when we are attempting to re-segment a market?

• Why do our forecasts need to reflect the type of market we are entering?

Lesson 9.14 – Draw the Diagram

Lesson 9.16 – Key Revenue Model Questions

Think About It: Macarons

• What are my customers paying for?

• What capacity do my customers have to pay?

• How will we package our product?

• How will we price our offerings?

Lesson 9.17 – Market Size and Share

Think About It: Macarons

• What’s the market size and estimate of market share?

• How does our customer segment channels buy?

• How much will the channel cost?

• How do we get customer activation?

• How much will it cost to acquire a customer?

Lesson 9.15 – JerseySquare Pricing

Lesson 9.18 – JerseySquare Revenue II