Revenue Model Innovation

Relying solely on traditional ad revenue simply isn’t enough anymore—sustainable growth depends on diversifying income streams. Ad revenues are under pressure, with CPMs declining 18% year-on-year (Reuters Institute, 2024) and stricter privacy regulations limiting traditional advertising’s effectiveness. A case study from The Guardian demonstrates that a strategic shift to hybrid revenue models can significantly boost performance. The Guardian transformed its approach by introducing tiered memberships that offer premium analysis and live editor Q&A sessions. This strategy not only tripled revenue in 12 months but also achieved a 32% membership uptake. Similarly, Forbes tapped into NFTs, providing over 10,000 subscribers with exclusive event access and early article previews—clear evidence that audiences are ready to pay for exclusivity. Even more telling, The New York Times now derives 64% of its revenue from subscriptions, while publishers like The Information have further strengthened their community ties by launching subscriber-only apps that reduce third-party dependencies. These initiatives reflect a broader shift in audience expectations. Consumers are increasingly drawn to high-quality, exclusive content and personalised experiences rather than generic, ad-supported material. Moving beyond an ad-only strategy isn’t just about following trends—it’s a practical move to secure your business for the future by building deeper relationships and ensuring long-term financial stability. Here are the key insights: 1. Diversify Revenue Streams: Embrace innovative approaches such as tiered memberships and NFTs to reduce reliance on declining ad revenues. 2. Enhance Audience Engagement: Offer exclusive, value-driven content that fosters deeper connections and builds community trust. 3. Future-Proof Your Business: Transitioning to hybrid revenue models is essential for long-term sustainability and resilience in digital publishing. The shift towards diversified revenue models not only strengthens financial performance but also cultivates a more engaged and loyal audience. Would your audience pay for exclusive content? Why or why not? Share with me in the comment section. #DigitalPublishing #SEO #RevenueDiversification #MembershipModels #MediaInnovation

There are companies that sell a product or a service.  And then there are the companies that quietly figured out they could sell twice. It starts with a simple idea : a second revenue line built on top of the first one. You sell something: a test, a device, a clinical service.  ↓  That activity generates a byproduct: data, insights, operational assets.  ↓  And that byproduct can be monetized to a different audience. It’s not diversification. It’s cumulative revenue architecture, a model where value compounds instead of splitting. To make it concrete: 23andMe  • Line #1: Consumer genetic tests ($100–150 per kit)  • Line #2: Licensing genomic datasets to pharma for research (multi-million-dollar deals with GSK, Almirall…) Flatiron Health (acquired by Roche for $1.9B)  • Line #1: Oncology software suite  • Line #2: Real-world evidence sold to pharma to accelerate clinical trials Why is this model so powerful? - Reverse economies of scale : the more you operate your primary activity, the more valuable your second revenue line becomes. Network effects, but flipped. - Two revenue engines = less fragility. If reimbursements tighten, the secondary line cushions the impact. - A structural competitive advantage. Competitors who only run a single revenue line struggle to match your pricing. You’re playing with a hidden margin. - Faster R&D. Revenue from line #2 funds improvements to line #1, which in turn produces more valuable assets for line #2. A self-reinforcing loop. But there’s one trap you absolutely want to avoid: don’t build the second line before the first one works. All these companies started with a primary product that created real value. The second line didn’t replace it, it emerged from it. Because if your core product isn’t valuable, it doesn’t matter how many times you try to monetize it. You can’t build cumulative revenue on top of an empty foundation.

Unlocking New Revenue Streams with SaaS Models A few years ago, I sat across from a startup founder who had built a brilliant product—an AI-powered analytics tool for eCommerce businesses. The problem? They were struggling to scale. Their high upfront costs and one-time licensing fees limited customer acquisition. “We have a great product, but revenue is unpredictable,” he admitted. I’ve seen this challenge time and again—companies with exceptional tech but outdated monetization models. That’s when I asked him, “Have you considered transitioning to SaaS?” Fast forward 18 months, and that same startup saw a 3x increase in revenue, higher customer retention, and expansion into global markets. That’s the power of Software-as-a-Service (SaaS). Why SaaS is Driving Business Growth The SaaS market is projected to reach $908 billion by 2030, growing at a CAGR of 18.7% (Fortune Business Insights). Businesses are increasingly moving away from traditional software licensing to subscription-based, cloud-enabled solutions, unlocking new revenue streams and market opportunities. At Devsinc, we’ve helped numerous clients transition to SaaS, and the benefits are clear: 1- Recurring Revenue Stability: Unlike one-time sales, SaaS provides predictable, subscription-based income. 2- Scalability: SaaS businesses grow exponentially with minimal incremental costs. 3- Global Reach: Cloud-based delivery removes geographic limitations. The Real Impact of SaaS: A Case Study One of our eCommerce clients, initially selling packaged software, struggled with declining sales. We helped them pivot to a SaaS-based model, offering monthly subscriptions and AI-driven customer insights. The results? A 42% increase in customer lifetime value and 60% higher user engagement. The Future of SaaS: AI, Verticalization, and Automation By 2026, 70% of software products will shift to SaaS-based models (Gartner). Emerging trends include: - AI-powered SaaS: Automating workflows and enhancing decision-making. - Industry-Specific SaaS: Tailored solutions for sectors like healthcare, fintech, and retail. - Usage-Based Pricing: Charging customers based on consumption, increasing flexibility. Building a Successful SaaS Business Transitioning to SaaS isn’t just about moving to the cloud—it’s about redefining how value is delivered. Companies that invest in customer-centric experiences, seamless onboarding, and continuous product evolution will lead the market. The conversation with that founder wasn’t just about switching business models—it was about embracing a new mindset. SaaS is more than software; it’s a strategy for sustained, scalable growth. For companies looking to unlock new revenue streams, the question isn’t whether to adopt SaaS—it’s how quickly they can adapt. The future belongs to those who can innovate, iterate, and deliver continuous value. Are you ready to make the shift? #SaaS #BusinessGrowth #RecurringRevenue #TechInnovation #DigitalTransformation

Short Sword story on how incentives drive behavior and how we've leveraged this principle to fix the biggest crux in healthcare: patient engagement. Before we entered the market, I used to have conversations with other founders in Healthtech/Digital Health to better understand the challenges they were facing. (Feedback is truly a gift.) I asked all of them what one thing they would immediately make better if they had a magic wand. The overwhelming response was engagement, specifically, the ability for patients to adhere to their care programs. This insight was eye-opening, but not entirely surprising. It was vastly known by then, and still true today, that the great majority of new healthcare solutions directed at members fail not because they're not clinically efficient, but instead because it's very challenging for members to engage with them long enough to see real and lasting benefits. As we delved deeper into this challenge, a piece of wisdom from Charlie Munger came to mind: "The only thing I want to know is where I'm going to die so I never go there." And we knew that lack of engagement in the Sword program would be how we would die, either now or in 5 years. If no one really adheres to our program, members don't recover and clients don't see the ROI they're expecting. We're dead. This realization led us to a crucial question: How do we ensure that everyone at Sword is maniacally focused on engagement and on innovating to excel at it? The answer lay in aligning our incentives with patient success. We designed our pricing model to ensure our revenue would be directly tied to member engagement. Under this system, we would only receive payment as members progressed through the program and completed their sessions. At the time, the industry standard among our competitors and other digital health solutions was to collect 100% payment upfront, before members even began the care program. This decision entailed significant short-term trade-offs. During 2020 and 2021, our revenue was approximately half of what it could have been had we followed our competitors' practice. However, our strategy proved immensely beneficial in the long run. We developed exceptional expertise in driving engagement, which ultimately enabled us to become the fastest-growing solution in our vertical. Our innovative approach didn't go unnoticed. Our innovative pricing model proved so compelling to clients that they began requesting their other digital health providers to adopt what became known as the "Sword pricing model," which is now increasingly becoming a new industry standard. In conclusion, this experience has reinforced a valuable lesson for us: When making decisions, it's always very tempting to go for the ones that lead to a maximization of revenue. But by definition, building a generational company isn't a sprint. It's a marathon. And easy choices now lead to a harder life in the future. And that future comes fast.

Are you leaving money on the table? Your revenue model defines what you monetize. But it’s your pricing strategy that decides how well you actually get paid. Right revenue model + wrong pricing strategy = underpaid, every time. Dropped a carousel breaking down the most common SaaS revenue models. But that’s just step one. Step two is to modernize how you price that value. And as AI drives down the cost of code, two pricing strategies are gaining ground: 🔁 𝗖𝗼𝗻𝘀𝘂𝗺𝗽𝘁𝗶𝗼𝗻-𝗯𝗮𝘀𝗲𝗱 𝗽𝗿𝗶𝗰𝗶𝗻𝗴 Used by 60%+ of B2B SaaS. → Charges based on actual usage, not seats. → Scales naturally with customer growth. → Lowers adoption friction. Twilio bills per SMS or call. AWS charges per GB or compute hour. Dispatch prices based on service jobs processed. 📈 𝗢𝘂𝘁𝗰𝗼𝗺𝗲-𝗯𝗮𝘀𝗲𝗱 𝗽𝗿𝗶𝗰𝗶𝗻𝗴 Still under 5% adoption, but growing in enterprise. → Tied directly to results like ARR, savings, or churn reduction. → Aligns your revenue with customer success. LinkedIn - applicant volume, hire rates, or response rates Snowflake - internal adoption and decision velocity Gainsight - business KPIs (NRR, churn) If someone bought your SaaS tomorrow, 99% of the time: → Pricing is at the top of the list of changes they'd make. It's a higher-leverage growth lever than doubling your pipeline. Still charging like it’s 2020? 💰 Packed a tactical bundle to pressure test your pricing. [check the comments 👇] #saas #startups #founders #revenue #pricing #strategy

If I told you: "Your business model has fundamentally changed, and now you're only paid when customers use your product..." What would you do differently? This isn’t theoretical. It’s the new reality for many companies navigating the shift to AI-driven, consumption-based pricing. What used to be a clean handoff from Sales to CS at contract-sign is now a blurred GTM flow: Usage, value, and expansion all living on the same timeline. → Sales incentives can no longer be tied just to bookings. If usage lags, revenue lags. → CS can’t afford to be the “everything department”. We must be proactive partners in driving sustainable usage and long-term value. → CS leaders are navigating a fundamental shift in how we structure teams, define success, and connect day-to-day work to revenue outcomes. → CSMs are no longer just managing relationships. They drive revenue by guiding usage, surfacing insights, and identifying expansion: part data analyst, part technical guide, part strategist. → Data isn't optional. You need real-time visibility into what features are being used, where customers are stuck, and when to intervene — or celebrate. → QBRs: Guiding your customer's strategy doesn't wait for a quarterly meeting. That’s too late. Customer guidance needs to be built into the product and shared wherever they are (Slack, email, in-app). Strategy is part of building the relationship. Without it, revenue suffers. → Cross-functional collaboration isn’t a nice-to-have. You need tight loops between Product, Engineering, and CS to unblock usage and iterate on feedback. AI's impact is more than just new tooling or dashboards. It requires a reinvention of go-to-market strategy itself. When your cost structure and revenue model change, your operating model has to follow. ---- Are you exploring usage-based pricing or integrating it into your GTM motion? How are you adapting CS, Sales, and Product around it? What challenges have you faced? and what did I miss? --- I write about these topics every week in my newsletter. You can find it on my profile. Jan Young, MBA, CSPO, CSM StepUpXchange JanYoungCX #customersuccess #innovation #GTMevolution #AI

🚀 Salesforce 𝐒𝐩𝐫𝐢𝐧𝐠 ’25: 𝐀 𝐏𝐫𝐨𝐝𝐮𝐜𝐭 𝐄𝐯𝐨𝐥𝐮𝐭𝐢𝐨𝐧—𝐀𝐧𝐝 𝐚 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐌𝐨𝐝𝐞𝐥 𝐑𝐞𝐯𝐨𝐥𝐮𝐭𝐢𝐨𝐧 Salesforce’s Spring ’25 release brings major AI and automation upgrades, but the real story might be 𝘩𝘰𝘸 𝘚𝘢𝘭𝘦𝘴𝘧𝘰𝘳𝘤𝘦 𝘪𝘵𝘴𝘦𝘭𝘧 𝘪𝘴 𝘦𝘷𝘰𝘭𝘷𝘪𝘯𝘨. Beyond product innovation, Salesforce is fundamentally rethinking how it sells, monetizes, and delivers value. The biggest SaaS company in the world is making a clear bet: ✅ Technical expertise belongs in sales, not just in support ✅ Pricing must shift from static fees to usage and outcome-based models ✅ Revenue teams must be as agile as the products they sell 🔄 𝐀 𝐍𝐞𝐰 𝐒𝐚𝐥𝐞𝐬 𝐌𝐨𝐝𝐞𝐥 𝐟𝐨𝐫 𝐚 𝐂𝐡𝐚𝐧𝐠𝐢𝐧𝐠 𝐒𝐚𝐚𝐒 𝐄𝐜𝐨𝐧𝐨𝐦𝐲 Traditionally, sales, solutions engineering, and customer success were distinct. Now, those lines are blurring: 1/ Sales is getting more technical. Sales Engineers are no longer just validators; they’re revenue drivers 2/ Customer experience is the new differentiator. Buyers expect deep product knowledge at every touchpoint. 3/ Compensation models must evolve. Success can’t just mean closing deals; ongoing customer value must be rewarded. 💰 𝐌𝐨𝐧𝐞𝐭𝐢𝐳𝐚𝐭𝐢𝐨𝐧: 𝐓𝐡𝐞 𝐄𝐧𝐝 𝐨𝐟 𝐅𝐥𝐚𝐭-𝐅𝐞𝐞 𝐒𝐚𝐚𝐒 The old model—low marginal costs, static pricing—is disappearing. With AI and cloud costs rising, SaaS companies must embrace dynamic pricing: 🔹 Usage-based and outcome-driven pricing is the future 🔹 Agile pricing strategies will separate leaders from laggards 🔹 Real-time experimentation is now a business necessity This is where tools like Orb Simulations come in. Companies that can model, test, and refine pricing strategies in real time will win in this evolving landscape. https://lnkd.in/g4WjAe4Y 🚀 𝐓𝐡𝐞 𝐒𝐚𝐚𝐒 𝐋𝐞𝐚𝐝𝐞𝐫𝐬 𝐨𝐟 𝐓𝐨𝐦𝐨𝐫𝐫𝐨𝐰 Salesforce isn’t just releasing new features—it’s reinventing SaaS economics. Those who embrace technical selling and pricing agility will define the next era of the industry. How is your organization adapting? Let’s discuss. ⬇️

When the economy wobbles, most businesses cut back. But the ones who really want to thrive get creative with their revenue. True financial resilience is about knowing when to shift, stretch, and strategically reinvent how you serve your customers.  True financial resilience is about knowing how to INNOVATE to create new revenue streams. The Doblin Institute outlines 10 types of innovation. Innovation is not always about inventing something new or building technology—it’s also about adapting and responding to customer needs. Some of the innovation types include: ✅ Profit model - how you make money ✅ Channel innovation – reaching customers through new avenues ✅ Revenue model innovation – repackaging and rebundling their offerings and changing what they charge CHANNEL INNOVATION EXAMPLE When I visited the Uncle Nearest, Inc. distillery, owned by Fawn Weaver, in TN, I went to the bathroom and saw the most interesting thing - an invitation, to help Uncle Nearest whiskey expand its market. A sign educated customers on how whiskey distribution channels is the primary form of how whiskey ends up in stores but its ability to drive demand is limited. To drive demand, the invitation asked customers/visitors of the distillery to go to our favorite local bars, restaurants and hotels and if they don't already carry the Uncle Nearest whiskeys, ask the manager to reach out to the distillery.  This is a beautiful example of how a business owner is leveraging customers' networks as a new CHANNEL to expand the reach of the brand and generate more revenue.  PROFIT MODEL EXAMPLE A dance studio owner had to close her dance studio due to the pandemic. Instead of shutting down her company, she pivoted—fast. In listening to her customers she realized there was a dire need for tights and leotards that matched the various skin tones of her black and brown dancers. So she collaborated with a tight manufacturer and started designing her own line.  Once the studio reopened, she continued selling the apparel line which eventually generated more revenue than the dance studio class registrations. She didn't just survive the pandemic—she adapted to the market and her clients' needs, looked at the numbers and made a strategic, profitable pivot - That’s innovating with financial cents! If you’re wondering how to be financially resilient, I’ve put together a guide to walk you through it step by step. 📘 Download my free Profitable Pivot eBook — a financial resiliency playbook for uncertain times: Link in the comments. You can build a business that’s both financially grounded and creatively adaptive. And you don’t have to do it alone. #entrepreneurship #smallbusinessfinance #CFO #fractionalcfo