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Revenue streams are the building block that represents the cash a firm makes from each customer segment. Where the company generally considers it clients as the heart of the business, its revenues automatically associated with the business arteries. The company must assess the worth of the value it provides to each customer segment. A precise assessment of the business worth contributes to various revenue streams generated from one customer segment. Various companies emphasize only on their customer policy leading to incomplete canvases in which revenue streams are totally overlooked. It’s critical to differentiate that revenue streams only represents the cash and rather not profits which most businesses are currently flowed in. Revenue streams must be clearly defined and specify the pricing and projected lifestyle of each source. This will help the business to evaluate whether the source is profitable for the business to decide whether or not to opt for the revenue stream.

Caply Company being new in the market, it does not have various revenue streams. The primary revenue stream is through customer subscriptions through referral programs (Kickstarter, 2018). The company uses Backer Referral Program to entice customers subscribe by giving back credit and Caply items. This is currently the main stream the company generates its revenue from online customer segment. Participation in the referral programs increases the loyalty of the existing customers thus making them able to influence their friends to subscribe to the company’s services (Garnefeld, Eggert, Helm, & Tax, 2013).

A business model describes the way a company creates and conveys value to clients. It characterizes services or products that the business provides and how the organization is compensated for them. The most crucial characteristic of a business model is the distribution approach that the business utilizes in providing a service or creating a product for clients. Caply can adopt one of the three distribution approaches including hybrid, cloud or on-premise. The best distribution approach to improve Backer Referral Program for subscription is hybrid software distribution approach.

The rationale for Choosing Hybrid Software

This distribution approach combines both on-premise software and SaaS solution. On-premise software involves installation of Caply software and running it within the in-house infrastructure of customers. It allows the company to customize Caply Camera based on customers’ needs. On the other hand, Caply can use Software as a Service (SaaS) which will enable it to host its applications and avail them to clients through the internet. SaaS generally distributes created products through a term-based subscription thus Caply will be able to receive revenue so long as its customers use the software regularly. Since high-speed internet connections have become commonplace in the current business environment, Caply can adopt hybrid software to improve customer subscriptions (AltexSoft, 2018). Furthermore, hybrid deployment allows clients to choose between an on-premise solution and a SaaS service and give them the opportunity to switch from one approach to another if needed. Hybrid software distribution encourages the existing customers the flexibility to move referral information between the on-premise data center and third-party clouds where interested subscribers can easily access the information.

Caply Company can also generate revenue from secondary revenue streams. The first secondary revenue stream is advertising fees. The company can allow site owners to display their ads on the Kickstarter page and charge them fees. Such ads may be served through third-party networks or by the site owners. The revenues usually value depending on the types of ads, i.e., cost per thousand (CPM) or cost per click (CPC) (Bhalla, 2016). The second secondary revenue steam could be affiliate partnership whereby Caply Company partners with other third-party website and serve as its affiliate partner. Through this, Caply will redirect some of the website visitors to the third party website and earn the commission in case its redirected website visitor purchases from the third party (Bhalla, 2016). For example, Caply may partner with GoPro Hero 5 and redirect visitors who need cameras with larger megapixels. Gopro Hero 5 will pay Caply a certain percentage if the redirected customer buys a camera. This is the painless and steady way of earning revenues because Caply will not worry about shipping and storage costs.

The most effective distribution paths for affiliate partnership is referral program. Here, Caply uses its website where visitors search for the camera product based on their desired specifications. If customers’ specifications would not match Caply camera’s features, the company would automatically redirect the customer to its partner who can provide the product based on customer’s demand. Furthermore, customers can add the camera items they need to a cart on Kickstarter page then Caply Company emails its partners specific customer orders to be effected then follow up to ensure the order is availed to the customer. On the other hand, cloud-based distribution approach would be useful for advertising because potential advertisers will be able to access Caply website through cloud service such as software as a service (SaaS).

References

AltexSoft. (2018, January 17). Software Business Models, Examples, Revenue Streams, and Characteristics for Products, Services, and Platforms. Retrieved from https://www.altexsoft.com/blog/business/software-business-models-examples-revenue-streams-and-characteristics-for-products-services-and-platforms/

Bhalla, M. (2016, September 1). 6 Possible Revenue Streams For Entrepreneurs in E-Commerce Business. Retrieved from https://www.semrush.com/blog/6-possible-revenue-streams-for-entrepreneurs-in-e-commerce-business/

Garnefeld, I., Eggert, A., Helm, S. V., & Tax, S. S. (2013). Growing Existing Customers' Revenue Streams Through Customer Referral Programs. Journal of Marketing, 77(4), 17-32. doi:10.1509/jm.11.0423

Kickstarter. (2018). Caply ? Ultra Lasting Action Camera. Retrieved from https://www.kickstarter.com/projects/1592252142/caply-the-worlds-most-durable-action-camera?ref=discovery%20