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27

B2C

Revenue Model Options


curated by @arnevbalen

boardofinnovation.com

flickr cc 59937401@N07

Why did Board of Innovation


make a tool to explore ways to find new revenues?
As an agency specialised in business model innovation, we support
our clients to develop sustainable new revenue streams. By asking
the right questions, different options to cash in on your new idea will
arise. Unfortunately, we cant be everywhere at the same time. Thats
why we made a flowchart to help you and your team to discuss the
alternative monetisation tactics & pricing options.

Step 1: Flowchart

Find new revenue models for your idea


Cool! You just

it for free!

Maybe

Of course! How

No!

It's not about the

Do you want more than one


contact moment with your
user?

everyone will pay!

Not relevant

for my product!

High chance that you'll

devastated if

their user data


was lost!

High chance that you'll

7. Loss/Aversion

Absolutely!

Don't forget

to check this
one as well!

Yes, they

Solution

the money!

Does your product need a critical


amount of users to show it's value?

Definitely!

Is it your goal to have


direct revenue from this
product/service?

mass needed!

Of course!
2.Tip jar/donation

3. Barter

Is the variabel cost per extra user


non-existent or negligible?
not living in the

faster, stronger!

we make

software!

We do have some

Middle Ages anymore!

Harder, better,

That's why

Seriously? We are

Charity?

No thanks!

5. Pay-what-youwant

You can probably

Afraid that you

make even more

won't receive

extra costs...

money on this! Just

enough donations?

give it a try!

Not knowing

No, it would

what's coming

lower the

Can you think of features that only


part of your user base would pay for?

is always kind
of exciting!

10. Convenience/
Shortcuts

Sounds like

You won't

gambling!

than the smell

regret this!

F*ck off!

of fresh money

Yes!
4. Freemium

Didn't I say I don't

Your journey requires

want them to pay?

Hmmm...
Making money on your product seems to be a tough one.
Get out of your comfort zone! It's innovate or die.

in the morning...

11. Helping peers/


Gifts

For example:
10. Convenience/ shortcuts

Integrated

It's not about

1. Early Exit

No...

value!

Yes!

Nope, no critical

What about offering a


box without telling
what's inside?

Hell yeah!

6. Vanity/
Reputation

would love it!

this road once!

17. Matchmaking
platform

Yes,

Do you want to have an


integrated solution that seems
to be your own offering?

My product is all

One Laptop Per Child


13. Get one Give one

Nothing better

You can only walk

trusted

partner

Are there any complementary


services/products to your offer
that your users expect?

In fact, yes!

use everything they have!

Did you develop a feature/product


significantly more convenient than
the best alternative users have?

No! Amongst everyone!

Would users value the possibility to


share the product with their peers?

Remember:

Advice to
16. Data Resell

they need!

Not at all, they already

Nope!

Would the status only be relevant


amongst the user base of your product?
That's how

advantage!

is fine!

Do your users have non monetary


resources the company (or other
users) normally would have to pay for?

Can the user receive a higher


status by using the product?

a teleportation! Find
the exit...

Ever played Monopoly?


Go back to start!

Close...

12. Exclusivity/
Limited Availability

#Awesome! You have some


options that your users
might be willing to pay for.

Do you want the user to own the


product once they pay?

Yes!

Would you like proof of


interest from your users
before you launch?

Damn right

about that!
23. Crowdfunding

Not really!

Will the user have the


exclusive right to use
this product?

Not

We will launch

nessecarely!

anyway!

Do your users want to


pay every time they use
your product/service?

Do you think the user might


have trouble paying the entire
product at once?
No!

Yes!

Monetization driver
(How to cash in)

Always come together

Free!
For the user.

Third party
pays the bills

Nope!

Yes!

No, but we do

have a recurring
cost in mind!

Crowdfunding is

only the beginning...


Can one product
be shared amongst
different users?

Yes!

Could you introduce physical


consumables to be used
together with the product?
No!

What would that mean !


for your idea?

What would that mean !


for your idea?

Try to imagine

Try to imagine

What would that mean !


for your idea?

What would that mean !


for your idea?

Try to imagine

Try to imagine

but yet so far...

9. Mystery/Surprises

What about these colours?


Paid!
The user = Client

Step 3:
Brainstorm template

15. Affiliate/
Referral

is our competitive

No!

be useful!

users to pay!

it works!

Do you want to offer a


product/service to people
that can't afford it?
Exactly!

Yes, that would

Not relevant!

find more reasons for

14. Advertising

How to cash in on your ne

Ads, are

Shht... user data

Do you generate user-data


relevant for others?

Not

Does your product/service


remember previous use of a
user? (eg. memory card)

Note: This is not a scientific tool. Dont expect the ultimate solution.

you crazy?

just not sure if

necessary!

users to pay!

They would be

Do you dream of
making even more
money with this idea?

Check!

Not really...

ability to pay. I'm

find more reasons for


8. Privacy/
Anonymity

Do you believe other companies


would have interest in targeting
your user base?

Will users have to give their


personal details in order to use
your product/service?

can I let them

pay otherwise?
Do you think your users could
feel uncomfortable if all their
friends know that they use
your product/service ?

This flowchart will be most effective in one of the following 2 use cases:
You have a new idea and you are wondering if you can monetise it.
You already developed your business model and you would like to
challenge your current monetisation strategy.

Step 2:
Revenue Cards

Hint >You might find gold at

the other side of this tunnel

No, let's give

Yes!

teleported

yourself here!

Obviously...

Start here!

Answer quick! What comes to mind


first is the right answer. Here we go:
Will the majority of users pay for
your product?

When should I use it?

What wou
for yo
Try to

Yes!

Nope!

22. Fractional
Ownership

Good
idea!

Always come together

25. Razor-blade
19. Subscription
(time related)

20. Leasing

21. Pay-per-use

18. Flat rate


(one-time-fee)

Do you see the


option to sell
something extra
to part of your
customer base?

24. Add-ons

Rules of the game:


Start from a concrete idea
Continue until you are at a location where
you have been already (vicious cycle!)
Check all answers before choosing a path
Dont judge yet, seriously!

Rules of the game:


Check cards to understand the
monetisation principle if you need some
clarification or examples.
Its totally ok to peak into the revenue
cards that you didnt have as an outcome
from the flowchart ;)
Download all files for free:
www.boardofinnovation.com/FindNewRevenue

What wou
for yo
Try to

Rules of the game:


Take all outcomes into consideration
For example:
Translate10.
the
theoretical
outcome
Convenience/
shortcuts
into concrete ways to earn money
Ask all team members to come up
with
their own translation
What would that mean !
What would that mean !
What wou
for your idea?

for your idea?

Try to imagine

Try to imagine

for yo

Try to

#1 Vanity/Reputation

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

Allowing customers to distinguish themselves from other customers will make


them feel important. Often used in gaming!
2 Examples to turn theory into practice

1. Windows 8 Pro

2. Reputation in games

Pro and Business versions of Windows do not differ that much in features,
while Pro is priced much higher than the basic version. But wait Do you
want to be the one opening your Windows Home Edition with a new client?

Gamers of World of Warcraft often pay to fit in, for exclusivity, to show
commitment or simply to show off to the starters (aka .#noobs) in the game.
Its all about perception!

#2 Loss/Aversion

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

A technique used by drugs dealers for many years and also known as locking-in
customers: give something for free (or cheap) and provide lots of hassle ( or
effort) when they want to change to a different alternative.
2 Examples to turn theory into practice

1. Dropbox

2. Seven

Dropbox is the most expensive player in the cloud storage market, but they
were first and everyone integrated 3rd party services with their dropbox
account. Who knows what might stop working once you switch to an
alternative?

Seven is a fitness app with a goal to workout each day for 7 months. If you
miss a day, you lose a heart. Once you lose your 3 hearts, you have to start
again from zero. Expert tip: Extra hearts can be bought ;).

#3 Privacy/Anonymity

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

When you dont want other people to find out who is using the service, users
might want to pay for this matter.
2 Examples to turn theory into practice

1. DateMeKenya

2. Vanilla Visa

Anonymity is crucial when you want to hide what you are doing.
DateMeKenya has the anonymity feature only available for their paying
members. You dont want your husband/wife to find out that you are dating,
right?

Vanilla Visa is a gift or reward card that works the same as a normal
creditcard but without identification. Fees are higher than regular credit
cards but the money is untraceable.Expert hint: Extra hearts can be bought ;).

#4 Mystery/Surprises

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

Giving people a reason to believe that they might win a lottery creates customer
experience. Not knowing whats coming can often be exciting!
2 Examples to turn theory into practice

1. Birchbox

2. Mystery in Gaming

Birchbox is a subscription service that sends you (or someone that received it
as a gift) a monthly box full of cosmetics. You wont know whats inside until
you open it and thats why its so much fun to find in your mailbox.

No payment trigger that the gaming industry doesnt use! In this mystery
crate you have a (small) chance of finding rare items (eg. crystal sword). You
might call it a virtual lottery.

#5 Convenience/
Shortcuts

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

Delivering a product/service that is more convenient/easy to use compared to


existing alternatives is worth paying for!
2 Examples to turn theory into practice

1. Shyp.

2. Zynga Games

You want to send a camera to your brother abroad but you hate the hassle
with sending? Shyp will be your best friend! You simply take a picture of the
camera, choose the destination and Shyp comes to pick it up within 30
minutes.

The power of Zynga-like games is the simple choice e.g. when you want to
grow a plant you can: grind (click 5000x), spam (invite 50 friends for double
speed) or pay (#coins).

#6 Helping Peers/
Gifts

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

Think about this as paying a round of drinks in a pub with your friends. You will
get instant social status as a result. Giving something valuable to someone you
care about creates satisfaction.
2 Examples to turn theory into practice

1. A Small World

2. Baekdal Plus

A small world is a social network for the #UltraRich. If you are not part of it,
you wont be one of them. To get access, you need an invite. To get an invite,
you need to pay. Get it?

You check Baekdal Plus, a website full of in-depth research articles and you
find a highly relevant article for your colleague. Baekdal Plus lets you share
that $20 article for free if you have subscription ($9/month). Great deal, isn't
it?!

#7 Exclusivity/
Limited Availability

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

Having something with a certain exclusivity is a certain show-off. It has always


been like that and it will always be the case. The more people have access to the
product, the harder it gets to use this as a value perceiver.
2 Examples to turn theory into practice

1. Vertu

2. Wu-Tang Clan

Vertu offers a phone for a stunning 12 000 and you know what? People pay!
The reason: its your key to exclusive services (e.g. a concierge to call in any
circumstance) and events.

Instead of selling copies to all their fans, Wu-Tang Clan released just one copy
of its secret Album. Musea can rent the album to offer fans to listen the
album once for $40/time.

#8 Non monetary

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

2 Examples to turn theory into practice

There is no such thing as a free lunch! Apart from direct revenue, companies
launch products/services for other reasons: user base, prestige, contact details,
etc.

How it usually works - General visualisation


1. Whatsapp
Mobile messaging with friends all over the world is becoming
more popular than social media. WhatsApp had 450Mio users
(and their address book) when acquired by Facebook for
$16Bio. Fact: WhatsApp had no revenue model at that time.

Service
HQ
Inc

MyStartup.com

Consumer

Lower price than service cost


(often free)

Data, the right to use data or something else


non monetary and valuable for the MyStartup.com

2. Thunderclap
The world's first crowd-speaking platform. At time of writing
(March 2015), over 3 million people have donated their social
reach for ideas and causes that matter. The service given to the
users in this case is reputation.

#9 Tip jar/Donation

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

2 Examples to turn theory into practice

Some products need a lot of users to function appropriately. Some people will
highly appreciate what they get. Giving these people a chance to show this
appreciation in a gift () is a tip jar/donation.

How it usually works - General visualisation


1. Wikipedia
Wikipedias sole revenue stream is donations from users that
love the online encyclopedia. When you have (and need) a huge
user base, some of these users will be willing to help.

HQ
Inc

MyStartup.com

Information

Consumers

Donation

2. Amazon Smile
Amazon uses donations as a sneaky loyalty scheme. With every
purchase, Amazon Smile donates 0.5% of the purchase price to
a cause of your choice.

#10 Barter

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

2 Examples to turn theory into practice

Receiving products/services you want in return for another good or favour.


Most barter are triangle deals!

How it usually works - General visualisation


1. homeexchange.com
Home exchange is a website that allows you to exchange your
own home with other travellers for a limited amount of time
(aka. your holiday period) in return for a $9,95/month
subscription fee.

Consumer

HQ
Inc

Platform
Product

Product

MyStartUp.com
5

Commission

Consumer

Consumer
Product

2. Swap your car


The government of Murcia (Spain) encouraged their
inhabitants to swap their car for a free lifetime tram pass.
Note: this is not a triangle deal!

#11 Freemium

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

2 Examples to turn theory into practice

Segmenting your user base in users that get the service for free and users that
pay, is called a freemium business model. The paying customers usually have
access to superior features.

How it usually works - General visualisation


1. Spotify
Free users of Spotify receive advertisements every 20
minutes, paying users dont. Nothing more nothing less, it
doesnt have to be complex all the time.

2. Dropbox
Dropbox gives more online space to their PRO users that paid
for the service. Meanwhile, Business users have unlimited
space and extra services for teams to collaborate.

#12 Pay-what-youwant

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

2 Examples to turn theory into practice

Similar to donation but with a stronger focus on revenues, not users. Here you
get to choose what you pay for the product. Only works when variable costs are
negligible (e.g. music, games, virtual books, software, etc.)

How it usually works - General visualisation


1. Humble Bundle
Humble Bundle offers book and game bundles for a price that
you choose yourself. If you are one of the top payers, you
receive limited bonus books/games.

HQ
Inc

MyStartup.com

Information

Consumers

Money

2. 8k design agency
Offer what you want for their services and they pick the offers
they like. Apart from money, value drivers for 8k could be:
availability of their designers, big brands for their portfolio, etc.

#13 Get one-Give one

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

2 Examples to turn theory into practice

Sometimes you want to target a user segment that simply cant afford your
product in any way. The decision to make another segment pay double has been
made for charity: laptops, flash lights, etc.

How it usually works - General visualisation


1. One Laptop per child
For every laptop bought in the US and Europe, one of these
laptops was sold to charity organisations for highly deducted
prices. Fact: the low tech of these laptop triggered the
notebook trend (9 laptops) in the US and Europe.

2. Starbucks campaign
For every coffee bought, Starbucks donated 25 cents to Oasis,
an organisation helping locally based family organisations
worldwide.

#14 Advertising

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

2 Examples to turn theory into practice

The user becomes the product. Companies pay to reach the customers of your
service. The desired result is to drive consumer behaviour with respect to a
commercial offering.

How it usually works - General visualisation


1. Metro News
Metro is free around the world. Their goal? To reach as much
commuters as possible. The more eyeballs they keep rolling,
the more companies will pay for ads in these newspapers.

2. Pinterest
Pinterest is a great way to integrate advertising in behaviour
that people choose to keep doing: finding inspiration - clothes,
furniture, moodboards, etc.

#15 Affiliate/Referral

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

2 Examples to turn theory into practice

When referring your customers to another company, you are driving their sales.
Depending on the product and program, 5-10% of the product price, is a good
indicator of the lead fee youll receive.

How it usually works - General visualisation


1. FindGift.com
FindGift helps people to find the right gift. Once the service
guided you to what you want to buy, you will be directed to the
website of their partner. If you buy, FindGift gets paid.

2. ASAP54
ASAP54 is the Shazam for fashion. If you see something you like,
the app will tell you what it is and where you can buy it. Often
you will even get a direct buying link. Well, thats convenient
(and #smart). Good integration is the key!

#16 Data Resell

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

2 Examples to turn theory into practice

Selling customer data is a lucrative business for many purposes:


targeted advertising, medical research, personalised services, etc. Being
transparent is one of the keys to success!

How it usually works - General visualisation


1. PatientsLikeMe
PatientsLikeMe offers a valuable (and free) P2P service for
people searching for the best treatment of their disease.
Anonymous data is sold to Pharma, so they can come up with
better treatments.

2. Data Coup
The money saved by not providing a free service could be given
to the users willing to share their data. Thats exactly what
DataCoup is doing. You can earn up to $9/month, providing
them all data you already give to other companies.

#17 Matchmaking
Platform

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

2 Examples to turn theory into practice

When matching 2 relevant parties to each other, both value your service and
might pay for it. Dating platforms are the best known example of matchmaking
platforms.

How it usually works - General visualisation


1. Jobr

Money

Jobr is a Tinder for jobs matching companies with open


applications (and looking for the perfect applicant) with
applicants searching for their perfect job.
Consumer
Service

HQ
Inc

Experience

My organization

Experience

Service

2. Babelverse
Consumer
5

Money

Babelverse is P2P translator for spoken communication


available on-demand in any language and remotely on any
device. Fact: Launched as a business service but envisioning a
tool that will helps bridging the language gap at overseas
nature disasters.

#18 Marketplace

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

2 Examples to turn theory into practice

A marketplace always has clear supply and demand. Bringing these 2 sides
together might require a platform (marketplace) or a serviceprovider (broker)
The one delivered most value to is mostly the one that pays the commission fee
(buyer, seller or both).

How it usually works - General visualisation


1. Airbnb

HQ
Inc

Airbnb is a travel service that links people with space available


to people searching for a good place to stay (with locals).
Commissions charged are 6-12% of the listing fee.

MyStartUp.com

Platform

Commission

Money

Consumer

Consumer

Experience

Product

Community

Service

2. Ebay
Ebay is a well known auction platform for second hand goods.
Apart from commission on listing fee, sellers are also charged
to keep their offer on top of the page.

#19 Flat rate

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

2 Examples to turn theory into practice

This is how most products are sold. You pay a one time fee and you own the
product or you receive access to a lifetime service.

How it usually works - General visualisation

1. A banana
You buy it. You draw a face on it to extent its lifetime for 3
more minutes. You eat it. Youre done.

HQ
Inc

Service

MyStartUp.com

Product

Consumer

One-Time Fee

2. VPN Unlimited
VPN Unlimited is your one-stop shop for protecting your WiFi
connection, securing your online activity, and bypassing web
content restrictions. You pay 40 for a lifetime subscription.

#20 Subscription

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

2 Examples to turn theory into practice

A subscription is a service you sell in a certain timeframe. The service can vary:
receiving a newspaper every day, using a cloud service (software), being able to
call car assistance when needed, etc.

How it usually works - General visualisation


1. Adobe Creative Cloud
Adobe Creative Suite has had a single purchase for life for a
long time. Now they switched to a cloud service: you only pay
for what you need for the time you need it. According to Adobe
its cheaper. Disclaimer: They are lying :).

HQ
Inc

Service

MyStartUp.com

Consumer

Subscription

2. Dollar shave club


Every week you receive fresh razorblades in your mailbox for
$1/month. Thats convenient! Apart from razorblades, you
might find this kind of services for socks, fruit, candybars, etc.

#21 Leasing

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

2 Examples to turn theory into practice

Customers receive a physical product for a limited period to fulfil their needs.
Within the leasing period, a product can only serve the needs of one customer
(exclusive use).

How it usually works - General visualisation


1. LeasePlan
Leasing of cars is a service used by all companies worldwide.
Leaseplan is one the leading providers of this service.

HQ
Inc

Inc

Service

Flat Fee

Company

MyStartUp.com
Product (bought)

Consumer

Fee/Time

2. Lease a Jeans
Not much people think about it, but leasing is a revenue model
used for other goods as well: diamonds, bags, jackets and yes,
jeans as well. Hint: check www.mudjeans.com

#22 Pay-per-use

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

2 Examples to turn theory into practice

Some products are only used a limited amount of times per customer (a car is idle
97% of the time on average). Paying only for the times you need a product/
service creates flexibility and increases the value per use.

How it usually works - General visualisation


1. Blendle
Do you read the entire newspaper? Exactly, me neither.
Blendle is an aggregator of most Dutch newspapers. It sells the
articles separately for 10-20% of the newspaper price.

HQ
Inc

Service

MyStartUp.com

Consumer

Fee per use

2. Car vending machine


Did you know that the average car is idle 97% of the time?
Paying only for that 3% does makes sense! Our world would
need 30 times less cars. Here: a car vending machine in China
where you pay $3,5 per hour.

#23 Dynamic pricing

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

2 Examples to turn theory into practice

A pricing strategy with highly flexible prices for products or services based on
different variables: demand-based, time-based , profile-based, etc.

How it usually works - General visualisation


1. Qatar Airways
Airlines change prices depending on the day of the week, time
of day, and number of days before the flight, number of seats,
departure time and average cancellations on similar flights

HQ
Inc

Price based on
one or multiple variables

My organization

Consumer
Service

2. SF Park
Parking spaces are provided with a sensor, detecting parking
availability. To help achieve the right level of parking availability,
SFpark periodically adjusts meter - and garage pricing up and
down to match demand. Fact: 14 pilot project in San Fransisco

#24 Fractional
ownership

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

2 Examples to turn theory into practice

When customers are not able to pay for the entire product, you can allow them
to buy it together with peers. Another variation of buying together with peers is
group buying to achieve a discount on everyones product or service.

How it usually works - General visualisation


1. Elite Destination Houses

Consumer

Always nice to go on holiday to your own villa. Elite Destination


Houses sells to groups of people and maintains the villas
during the year.

HQ
Inc

Shared Product

MyStartUp.com

Consumer
5

Total price divided by


# consumers

Consumer

Product
Owners

2. Share a car
This could be your car-sharing calendar: brown is your
neighbours holiday in Spain. Red are your important meetings
in Paris. The rest of the time the car is available.

#25 Pre-Sales

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

2 Examples to turn theory into practice

Pre-sales is a way to offer a product/service/right for sale before it is developed


entirely. Mostly used to fund a project or to receive proof of customer interest
before launch. Always to be combined with another pricing tactic!

How it usually works - General visualisation


1. The Dash
HQ
Inc

The Dash (by Bragi) are Wireless Smart Headphones launched


on Kickstarter. Bragi used a crowd funding platform for raise a
development budget and to receive customer feedback before
investing in production facilities.

MyStartUp.com

Service

% Commission

Small Reward

Small Micro-Funding

Community
Member

Large Reward

Fund Seeker

Large Macro-Funding

Community
Member

Funding
Crowd

2. Pave
Pave is a service to fund students for expensive universities. As
a student, you pay part of your wage to the investors once your
start earning.

#26 Up-selling

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

2 Examples to turn theory into practice

aka. Add-ons. Some customers might have deeper pockets than you think.
Always allow them them to spend all the money they have! The gaming industry
understands this aspect, the music industry does not.

How it usually works - General visualisation


1. Audi
The entry level Audi R8 has a modest price tag of 120k. By
requesting a more luxury interior, extra options or some extra
horse power, you will have to pay extra. An Audio R8 full option
would cost you more than 250k.

HQ
Inc

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2. Wordpress Support
5

Fee

Wordpress is a free open-source DIY website platform. If you


need a more custom solution or if you do have some trouble,
you can pay for a support service.

#27 Razor-blade

Free!
For the user.

Value
Proposition

Third Party
pays the bill

Pricing tactic

2 Examples to turn theory into practice

Revenues are spread over the lifetime of a product. After a flat fee, customers
have recurring expenses they cant refuse. (e.g. Razor blades, coffee pads,
updates GPS devices, etc.)

How it usually works - General visualisation


1. Nespresso
Nespresso doesnt earn (much) on their coffee machines (they
dont even make them themselves). All of the money comes
from the pads. Interesting fact: Dyson chose for the opposite
strategy by taking away vacuum cleaners bags.

2. Tomtom GPS updates


An update is still cheaper then a new GPS system, right? This
is exactly how Tomtom and Garmin made big money for years.
Users choose to either pay or use outdated maps.

Avoid your Kodak or Nokia moment


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if
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e sta
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10. C
onv
Sho enience
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ts

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ey a
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Lapt

op P
e

ly!

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yste
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ises

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ur u of featu
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ase es that
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ata R

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-exis
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tent t per ex
t
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eglig ra user
ible?

14. A

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ser
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omp
etitiv
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13. G
et
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s
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?

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t th
y to
e
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just
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not
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ure
ever
if
yone
will p
ay!

Do y
o
res ur use
user ources rs have
no
th
s) no
rma e comp n mone
lly w
a
t
ould ny (or o ary
th
have
to p er
ay fo
r?

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yo
sign u deve
ific
lop
the b antly m a featu
or
re
est a
ltern e conve /produc
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s ha
ve?

No,

12
Limit . Exclus
ed A ivity/
vaila
bilit

Not

Can
th
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us b
y us eceive a
ing t
he p higher
rodu
ct?

Wou
ld
hare users v
alu
the p
rodu e the po
ct w
s
ith t sibility
heir
t
peer o
s?

nt
t mo more th
men
an o
n
t
user with yo e
?
ur

onta
c
Doe
s
rem your pr
emb
odu
user er prev ct/serv
ic
? (eg
io
. me us use e
mor
o
y ca f a
rd)

2.Tip

Afra
id th
won
't re
enou
gh d
ona

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