Second-order revenue

Second-order revenue is sales that come from existing customer referrals, as well as from customers changing employers and buying the product again at their new employer. This represents a significant increase in the lifetime value of a customer. A business can encourage second-order revenue by creating an in-house team that works on the improvement of products specifically so that they contribute to the success of customers; this means monitoring how products are used through constant customer interaction.

It is easier for a company to build second-order revenue when it has invested in branding activities over a period of time, and has built a reputation for quality and ease of use. Once these issues have been addressed, a business will find that its customers have, in effect, become an ancillary sales force for the company.

Related Courses

Revenue Management 
Revenue Recognition