Following on from my introduction to the four types of sales revenue, I want to share with you one of the stupidest revenue stream models you'll ever come across.  It represents an extremely short-sighted approach to business development and fails to take into account that the big money in business is on the back end.

Funny thing is, so many businesses use this model in their business-building efforts.  What about you?  Here is the model:

I think the visual explains it quite well:

1.  A business creates brand awareness for itself and its products

2.  From that brand awareness, the business generates sales prospects/opt-ins which – if the business owners has half a brain – go into the business's database.

3.  The prospect is then converted into a customer.  KA-CHING, a sale is made!

4.  That new customer then falls into a black hole, never to be heard from the business ever again. 

5.  The business misses out on additional revenue from that customer. Instead it focuses on getting more new prospects and customers.  In essence, the black hole represents a wasted opportunity.

Why do some business owners operate such a dumb model?  Two reasons:

1. Mental and behavioral.  Some business owners just couldn't give a stuff about the back end and so their whole mentality is about getting new business.  They operate a dumb model because they themselves are dumb.

2. Strategic.  Many business owners understand the concept of the back end, but don't really know how to put it in practice in their business.  So, in this respect they need to know how to strategically develop and implement a sound revenue stream model. In particular they need to know how to create a focused product portfolio, develop the right price points, position their products to the right target markets and develop a proper sales process.

If you have a mental and behavioral block towards developing a back end in your business, it's unlikely that I can help you.

However, if you want to develop a back end, then continue to read the next few posts as I go through some other, more effective revenue stream models you can create and implement in your business.

Remember these key points.

1. The black hole revenue stream model is for dummies. 

2. The big money is on the back end.

In the next post we'll look at a basic back end revenue stream model and I'll also introduce some model variations for you to consider.