Monetization strategies by industry

August 2024

Hey Growth Designer 👋

Have you ever wondered why some products skyrocket in revenue while others struggle to stay afloat? It often comes down to choosing the right monetization strategy.

In this edition, we’ll be diving into the best monetization strategies tailored for specific industries. Whether you’re working with SaaS products, e-commerce, or content platforms, understanding the right monetization approach can make all the difference. Ready to find the perfect formula for your industry? Let’s dive in.

Kristina Volchek

Freelance Senior Growth Designer & Design Mentor

SaaS / Freemium Subscriptions / Slack

Monetization Strategy:

Freemium Subscription with Reverse Trial

Why It Works:

The freemium model in SaaS offers a free tier with basic features, encouraging widespread adoption. Users can upgrade to paid plans for advanced features, integrations, and support. Topping this with a reverse trial lets customers access paid features initially, then downgrades them to the free plan when the trial ends. This drives the conversions inspired by trials and the product usage typical of freemium plans.

Real-World Example:

Slack, a popular team collaboration tool, uses this model effectively. The free plan offers essentials like message history, basic integrations, and support. Initially, users can try Slack’s paid plans, like Slack Pro and Slack Business, for free (during the limited trial period). These plans offer enhanced features such as unlimited message history, more integrations, advanced security, and priority support. After experiencing the benefits, users are more likely to convert to paid plans. This approach helps Slack build a large user base and convert more free users to paid plans, driving revenue through subscriptions.

E-commerce / Transaction Fees / Gumroad

Monetization Strategy:

Transaction Fees

Why It Works:

Transaction fees align the platform’s revenue with its users’ success. By taking a small percentage of each sale, e-commerce platforms can generate significant revenue without imposing upfront costs on sellers. This model is particularly effective for marketplaces and platforms facilitating transactions between buyers and sellers.

Real-World Example:

Gumroad, a platform for creators to sell products directly to their audience, charges sellers a transaction fee on each sale. This fee structure allows creators to join and start selling with minimal upfront costs. Gumroad takes 10% of each sale, which scales with the seller’s success, making it a flexible and accessible option for both new and experienced creators. Additionally, Gumroad manages complex international taxes, simplifying the selling process for creators around the world.

Content Platforms / Advertising / YouTube

Monetization Strategy:

Advertising Revenue

Why It Works:

Advertising allows content platforms to offer free access to users while generating revenue from advertisers who pay for exposure to the platform’s audience. This model works well for platforms with large user bases and high engagement, making them attractive to advertisers looking to reach specific demographics.

Real-World Example:

YouTube leverages advertising as its primary revenue stream. By displaying ads before, during, or alongside videos, YouTube monetizes its massive user base and extensive content library. Additionally, YouTube offers a premium subscription service to users who prefer an ad-free experience, providing a secondary revenue stream.

Mobile Apps / Multiple Models / Sweatcoin

1. In-App Advertising

Why It Works:

In-app advertising generates revenue by displaying ads to users, particularly in a high-engagement app like Sweatcoin. Advertisers pay for exposure to the app’s active user base, making it a lucrative revenue stream without charging users directly.

Real-World Example:

Sweatcoin displays ads to users, generating revenue from advertisers. Users can watch ads to earn additional Sweatcoins, with the process gamified to provide an unexpected amount of coins each time. This makes the ads feel like a part of the app’s reward system rather than an interruption. By integrating ads into the earning process in an engaging way, Sweatcoin maintains high user engagement while effectively driving ad revenue.

2. Marketplace Partnerships

Why It Works:

Marketplace partnerships generate revenue by allowing third-party partners to feature their products in the app’s marketplace. Partners pay to access the app’s large user base, providing users with goods, discounts, and promo products. This not only provides value to users but also helps partners hook new customers for future purchases.

Real-World Example:

Sweatcoin partners with various brands and companies that offer products, discounts, and services in the Sweatcoin marketplace. Users can use their earned Sweatcoins to purchase these items, often at a significant discount. Partners pay Sweatcoin to be featured in the marketplace, leveraging Sweatcoin’s large user base to promote their products and attract new customers. This model benefits all parties: users get valuable rewards, partners gain exposure and potential new customers, and Sweatcoin generates revenue.

Online Education / Courses / Growth Design School

Monetization Strategy:

Course Sales

Why It Works:

Selling courses individually allows education platforms to monetize their content directly. This approach is effective for platforms offering high-quality, in-depth courses on various topics, catering to learners willing to pay for valuable, specialized knowledge.

Real-World Example:

Growth Design School, organized by GrowthDesigners.co Community, offers an in-depth online course with live sessions twice a year. And, by the way, the next 5-week cohort starts in September. 😉  The course is priced at a flat fee of $950 USD for the entire experience with discounts for teams. This model benefits both the community and the instructors by providing an additional stream of revenue and incentivizing the creation of high-quality, interactive content.

Concluding Thoughts

Be the designer who embraces monetization. Use these models to strike the perfect balance between successful business growth and happy users. Be the designer that founders highly value and recognize (AKA the one who earns more 😉). More recognition, more impact, more pay – it’s a win-win.

If you liked this content and are interested in learning more, join our upcoming Growth Design School Fall Cohort.

Together with other top-tier instructors, I’ll be teaching a deep-dive on Monetization & Referrals. In the class, we’ll unpack more strategies, tools, and real-world examples to boost your product revenue streams and drive growth.

See you there!

Kristina

About the Author

Kristina Volchek is a Freelance Senior Growth Designer, Growth Design & Product Design Mentor, and one of the instructors at GrowthDesigners.co school. Connect with her on LinkedIn or subscribe to Designer’s Coffee Newsletter where she shares valuable learnings and insights about product design & freelance.