Consumer surplus is an economic measure of consumer benefit, which is calculated by analyzing the difference between what consumers are willing and able to pay for a good or service relative to its market price, or what they actually do spend on the good or service. A consumer surplus occurs when the consumer is willing to pay more for a given product than the current market price.
- Additional licenses – This one is common in today’s SaaS companies – selling based on licenses or “seats”. As a team grows, more seats may be required to gain access to a product/ service.
- Cross-sell – This type of sale captures cross-functionally opportunities within an organization. For example, a CRM may first be sold to a sales team to manage pipeline. Then, marketing may buy access to the CRM to understand lead and prospect-flow. And so on…
- Up-sell –Many products and services have tiered business models (packages). Tiered packages allow for companies to address a market’s consumer surplus – sell packages that capitalize on differing price considerations, typically. Think: silver, gold, platinum packages with options that are locked for specific packages.
- Additional products/ services – Up-selling largely occurs with tiered packages. However, packages are typically within the same product. This sell-on type is about selling a different product/ service. These tend to be complementary offers. For example, a product seller may sell professional services. This can also include things like accessories or service plans (think: cellphone cases or insurance plans).
There are many ways for businesses to continue to sell to existing customers – plenty of latitude to supplement the company’s business model. These are the opportunities that give investors excitement to grow a market beyond its existing.
- Good partners are those who will not only raise the difficult questions, but will help you to address them.
- If you’re not ready to answer the tough questions, then you’re not ready to raise funding. Investors WILL CALL YOU OUT.
- Take a step back from the day-to-day, and assess the strategic to-do’s and milestones you must satisfy.
- Tough questions… tough challenges… they can be seen as walls never to be overcome, or they can be seen as great opportunities. Up to you which way you address them, if at all.
- Get savvy with the numbers. Several entrepreneurs and business leaders have advised me in the past, “the best leaders knew their ‘numbers’.”
- If you don’t have a good answer, it’s okay to say, “I don’t know, but I’ll find out”, and actually follow up.
- A business plan can be time-consuming to put together, but can be a great way to structure and think about your business holistically. Consider investing the time to put one together, or in the least, use a One-Page Strategic Plan. Update this intermittently.
- It’s so important for any relationship, especially in an early-stage company, for each party to assess each other’s fit. Too often, partnerships are started absent of a strong foundation which leads to difficult divorces later. (New employees/ team members included!)
I remember so many people asking my Body Boss cofounders and I if we were thinking about presenting to Shark Tank or asking for funding. I tended to laugh at the questions not just because of the comedy of us being on national television, but because I knew we didn’t have good answers to tough questions.
A gamification-like strategy, where company-sponsored rewards (i.e. discounts towards food, clothing, etc.) are earned when users complete specific educational tasks. This can motivate users to stay on track and supported throughout their journeys towards the high-point.
The entrepreneur can monetize based on reward redemption or sponsorship careful not to dilute sponsorship dollars for the sake of revenue. Meanwhile, sponsoring companies will be able to market their products and services, while also supporting a positive cause.