5 Most Popular Revenue Models

VenturX
9 min readApr 12, 2021
Man bringing in new ideas and receiving revenue
Man bringing in new ideas and receiving revenue

Your product is ready to be sold. However, to ensure it goes into the hands of the right customer, there are countless factors that have to be taken into account to ensure your product can be bought out into the market. For example, the industry you are in, whether you are selling a web-based product or physical hardware, the channels you use to attract your customers, etc. One of these factors is picking the best revenue model that fits perfectly into your business.

What is a revenue model? A revenue model is a framework used by businesses to generate income from sales. A company’s revenue model determines everything from their value proposition, which revenue source to prioritize, and how to price their products. Revenue models help business owners manage their income stream and are key to a complete business model. Without a good business model, your business will incur costs it cannot sustain. The different types of revenue models are

  1. Subscription Business Model

Subscription business models are based on the idea of selling a product or service to receive monthly or yearly recurring subscription revenue. The best way to describe a subscription model is when customers will only keep paying for your products as long as they see value in the products your company provides them. This model leads to higher revenues and stronger customer relationships. Through subscription, customers become more valuable as long as they keep using your product.

Some tips for having a good subscription model are

  1. Determine your goals early — Adopting this business model requires you to define these goals early on. This helps ensure you are building the best pricing strategy possible for your specific goals. These goals will then help you define how you build your buyer personas and structure your pricing tiers.
  2. Boost acquisition with a better experience — Provide an amazing customer service. It will improve your customer acquisitions over time. A key metric to focus on is the onboarding journey.

Advantages of the subscription model include high predictability. The company’s income can be easily predicted on a month-to-month basis. It is easy to bring in disruptive innovation. Netflix disrupted the DVD renting industry by bringing in their

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