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We've found these six models to be a handy way of thinking about the options you have for improving your profits online. They can be part of your analysis process when you set up a web site or check out the feasibility of online presence. They can help you formulate objectives for your web site. There's nothing sacred about these. Other folks, in fact, have suggested other models. But we know these work for us and for our clients.
The Transactions Model involves an exchange. A sale is an exchange of a product or service for compensation. There are also informational exchanges where you get information in return for demographic information or just a simple request.
The Subscriptions/Memberships Model
The Subscriptions/Memberships Model involves providing special benefits to a specified group on the basis of their membership in the group. Folks can belong to the group because they pay a subscription fee, because they are part of a particular industry or ethnic group, or because they express interest. The subscriptions model includes one of the most powerful things happening on the net -- the formation of commercial communities.
The Enhancing Other Business Functions Model
This includes situations where your net or web presence Enhances operations that occur somewhere else. It includes things like using email to improve communication in the sales process, or using a web site to enhance sales, customer service, product development or any other operation that doesn't actually occur on the web.
Advertising is an audience delivery process. You reach a particular audience. Others, who also want to reach that audience, are willing to pay you to help reach them. Going the other way, you may be willing to pay to reach a particular audience. The special power of the net is that the reaching can be done with hyperlinks.
The Net-Related Services Model
The Net-Related Services Model is about receiving income for providing services. For some companies, this is the primary business. For others, they may provide services to clients and customers, either for a fee or as part of an overall relationship. This is also the domain of the Intranet. That's an internal web, using the same hyperlink technology as the World Wide Web, but available only to a limited group, usually a company's employees.
One of the most powerful ways to increase profit is to cut costs. One of the most powerful models for using the net and web to increase profits is to cut costs. This model kicks in whenever using the net or web reduces your cost over other methods. This can involve transactions, customer service or a variety of other possibilities. The special beauty of this model is that the web often lets you increase service quality at the same time as you decrease costs dramatically.
Don't get caught up in worrying about which model is the right one for something you want to do. Instead use the models as a way to check out all the options, or to test ideas. The names of the models are important. The range of profit-building possibilities on the net is important.
Check out the examples we've included as links on the pages devoted to the individual models. You'll see that some links appear on more than one page. That's because most companies using these models use them in combination for greater power and synergy. You should, too.
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