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REVENUE SHARING

Revenue sharing takes many forms but often refers to the sharing of operating profits and losses among different stakeholders. Some companies do this by sharing operating profits with the company’s employees. Other companies do this by paying a percentage award to outside actors who send new customers to the business.

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Things to Consider

While there are many ways to implement revenue sharing, for small businesses, using this model as means to gain exposure, increase clientele, and establish community is the most suitable.

groupon
Groupon

http://www.groupon.com

Groupon is a global e-commerce marketplace connecting millions of subscribers with local merchants by offering activities, travel, goods and services in more than 45 countries. It is a platform in which businesses can offer discounted goods or services typically with the intent to attract new customers. Groupon uses a no cure no pay strategy. They guarantee that a minimum number of clients will take the discount that is communicated. When enough people take the massive discount, the deals goes on. Groupon takes 50% of the revenue resulting from the promotion.

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For The SME

For certain businesses, word-of-mouth is the best way to attract new customers. Therefore, small businesses can use this by partnering up with related businesses to collaborate and share revenue. This involves rewarding the partners whenever they refer a new customer that results in a sale.

This strategy is highly suitable for SME’s that have a local shop within a community, such as salons, boutiques, or niche shops.

However, it is important to partner with businesses or individuals that share the same customer service ethics and standards as you do.