HOW TO GO ABOUT IT

When considering the options for new revenue streams for the company, there are a number of common areas to consider:

• Maintenance contracts and service fees – performing regular maintenance and service operations can help to ensure optimal performance of a product and that it will reach its design lifetime. As the manufacturer of the product, the Company should have the right skills and knowledge to o er this service (although being able to deliver these services cost-effectively to the customer is likely to involve a new set of threats and so requires careful consideration and planning).
• Training – helping the customer to get the most value out of their product by providing training courses can lead to higher customer satisfaction and at the same time can provide a useful revenue stream for the company.
•  Licensing – for companies that hold significant intellectual property, the option to license the use of that intellectual property to a third party can be a low effort way to generate new revenue streams. Careful consideration must be given to the strategic implications of licensing partnerships. For instance, could it lead to new competition within the company’s core customer segments? Could it involve a loss of control of the brand leading to loss of brand value?
•  Advertising – the communications channels that the company has built with their customers can be valuable to third parties if they can be used for advertising. This is the foundation of the ‘multi-sided platform’ business models discussed in the activity BM.4 Generate business model concepts at the big picture level. Again, careful consideration needs to be given to the impact
  of advertising on the overall business to avoid unintended consequences. For example, will the presence of adverts annoy or alienate the company’s target customer segments?