23 Revenue Tactics for Creating Value in Business

Revenue tactics

Creating value through innovative revenue tactics is essential for businesses seeking to diversify their income streams and enhance their financial stability. Here’s a guide on how to implement the 23 revenue tactics:

1. Add On

How-To: Sell a primary product at a low margin and generate profit through the sale of add-ons. Focus on selling a core product at a low margin and offer additional products or services that complement the core product at a higher margin.

Example: Razor companies often sell the handle cheaply but make a significant profit from the ongoing sale of blades. A textile manufacturer may sell a fabric at competitive prices but offers high-margin services such as custom printing, special finishes, or fast delivery.

2. Add on Financial Services

How-To: Beyond the product, offer financing options, insurance, or warranties.

Example: Car dealerships that offer financing options or extended warranties for vehicles at the point of sale. A carpet manufacturer could offer an installment payment plan or a stain protection service for an additional fee.

3. Advertising-Based

How-To: Provide a product or service for free and generate revenue through advertising.

Example: Social media platforms that are free to use but display targeted ads to their users. An online fabric store can offers free tutorials or pattern downloads, with the site featuring targeted advertisements from sewing machine manufacturers.

4. Auction

How-To: Allow customers to bid on your products, potentially driving up the final price. Let the market determine the price of your goods or services through bidding.

Example: eBay allows users to bid on items, often driving up the final sale price. A luxury textile company could auction limited edition fabrics to the highest bidder.

5. Broker

How-To: Create a platform to connect buyers and sellers and charge a fee for each transaction.

Example: Real estate websites that connect buyers with sellers and charge a fee for each sale.. Launch an online marketplace where independent designers can sell their unique fabric designs to buyers.

6. Bundled Pricing

How-To: Group products together and offer the bundle at a price lower than the sum of individual items.

Example: Cable companies that offer bundles of internet, phone, and TV services. Sell a sewing machine bundled with fabric, patterns, and accessories for a total price that’s lower than purchasing each item separately.

7. Cash Up Front

How-To: Collect payment before delivering the product, benefiting from the cash flow and interest.

Example: Annual subscriptions for software where users pay for the year ahead. Offer a pre-order option for exclusive fabric collections, requiring customers to pay in full before the collection is released.

8. Disaggregated Pricing

How-To: Break down products or services into individual components and allow customers to select and pay for exactly what they want. Allow customers to purchase exactly what they need, a la carte.

Example: Airlines that offer basic tickets with the option to purchase additional services like extra baggage or meals. Customers can choose specific features for technical fabrics, like water resistance or UV protection, and pay only for the selected features.

9. Flat Rate

How-To: Charge a single fixed fee for unlimited access to a product or service, regardless of amount or frequency of usage.

Example: A gym membership that allows unlimited access for a monthly fee. Offering a flat-rate subscription service for access to a curated selection of fabric swatches each month.

10. Dynamic Pricing

How-To: Adjust prices based on current market demand, time, or customer profile.

Example: Ride-sharing services that increase prices during peak hours. Using dynamic pricing for in-demand seasonal fabrics, raising prices during peak seasons.

11. Forced Scarcity

How-To: Deliberately limit product availability to increase demand and price. Limit the availability of a product either by quantity, time frame, or exclusive access to create urgency.

Example: Limited edition luxury goods that become more desirable due to their scarcity. Release a limited edition textile collection available only for a short time to create buzz and demand.

12. Freemium

How-To: Offer a basic product or service for free while charging for premium features.

Example: Software services that offer basic functionality for free but require payment for advanced features. Provide a basic online fabric design tool for free, with advanced features available to users who purchase a subscription.

13. Bait & Hook

How-To: Sell an initial product at a low cost and ensure that customers continue to make purchases through associated consumables or complementary products.

Example: Printers sold at affordable prices with proprietary ink cartridges that are sold at a premium. Sell a high-quality sewing machine at a competitive price, but the proprietary needles and thread that go with it are sold at a premium.

14. Licensing

How-To: Develop intellectual property and license it out for others to use. Develop proprietary patterns, technologies, or processes that others can use for a fee.

Example: Software companies license their programs to users, charging them a fee to use the software. A textile company creates a unique fabric design or weave pattern, which can be licensed to other manufacturers for their own product lines.

15. Membership

How-To: Offer memberships that grant customers special benefits, exclusivity, or discounts.

Example: Launch a club for quilters that provides members with monthly fabric selections, patterns, and access to members-only tutorials for a regular fee. Wholesale clubs that require a membership to shop at their discounted rates.

16. Metered Use

How-To: Charge customers based on the amount of product or service they use.

Example: Utility companies that charge for water or electricity based on usage. A fabric dyeing service could charge based on the amount of dye and water used, which varies with the customer’s fabric volume.

17. On-Demand

How-To: Provide fast, immediate or flexible service at a premium rate.

Example: Streaming services that offer movies for rent on top of a subscription fee. Offering on-demand custom fabric printing where customers can order prints of their own designs with a rapid turnaround time for a higher price.

18. Pay per Use

How-To: Similar to metered use, charge customers only when they use the service. Customers pay each time they use a product or service, often seen with consumables.

Example: Cloud services that charge businesses based on the amount of computing resources used. Selling smart fabrics that change color or pattern based on use, with customers paying for each change they initiate.

19. Pay What You Want

How-To: Allow customers to choose how much they are willing to pay for a product or service. Allow customers to choose their price, including the option to pay nothing.

Example: Independent artists or game developers that allow buyers to set their own price for digital downloads. Introducing a new fabric line and invite customers to pay what they want for the first yard as a promotional strategy to build interest.

20. Performance-Based

How-To: Waive basic fees, charging customers based on the performance or results of the product. Charge fees based on the performance or results delivered.

Example: Marketing agencies that charge clients based on the sales or leads generated from campaigns. Offering a textile that is guaranteed to last for a certain number of washes, with refunds or discounts applied if the product wears out prematurely.

21. Premium

How-To: Set prices higher than competitors for a superior product, service, or brand reputation. Offer products or services at a higher price point, typically for a perceived higher quality or status.

Example: Luxury car manufacturers that price vehicles significantly higher than average market value. Market a luxury fabric blend as being superior in quality and charge a premium price, emphasizing its exclusivity and craftsmanship.

22. Revenue Sharing

How-To: Partner with other companies or individuals and share the revenue generated from a joint offering. Enter into partnerships where revenue is shared between parties.

Example: App developers who share revenue with mobile platform providers from in-app purchases. Collaborate with fashion designers to create exclusive fabric lines, sharing profits from the sale of these fabrics.

23. Subscription

How-To: Charge a recurring fee for continued access to a product or service.

Example: Software as a Service (SaaS) companies that charge a monthly fee for access to their applications.. Implement a subscription model where customers receive a new selection of fabric swatches or sewing accessories monthly.

Implementing the Revenue Tactics

Each of these tactics can be tailored to fit the unique needs and circumstances of your business, enabling you to capture new value and drive revenue growth in the textile industry.

To put these revenue tactics into action, businesses should:

  1. Align with Brand Values: Choose tactics that align with the brand’s image and customer expectations.
  2. Customer Research: Understand what customers value and are willing to pay for.
  3. Market Testing: Pilot new pricing strategies in controlled environments to gauge customer response.
  4. Clear Communication: Make sure customers understand the pricing model and see the value in it.
  5. Technology Integration: Use technology to track usage, manage subscriptions, or facilitate auctions.
  6. Legal Compliance: Ensure that all revenue tactics comply with industry regulations and laws.
  7. Adjust as Needed: Be prepared to adjust strategies based on customer feedback and market changes.

By carefully selecting and implementing these tactics, businesses can create a diversified revenue stream that capitalizes on various market opportunities and customer behaviors. It’s all about finding the right mix that resonates with your customers and aligns with your business objectives.

Note: The above tactics have been drawn and adapted from Doblin and UNITE’s works.

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