Diversifying Revenues: Boost Income by Offering One Product or Service Multiple Ways
Often times when we think about growing and scaling our businesses, it’s tempting to expand them by offering more things. But when ill-prepared to do so by increasing your offers at the wrong time, expansion often costs more than you think instead of making you more money.
So if it seems you’ve hit a ceiling, try this expanding the ways that you sell one offer. The wonderful thing about this is that it allows you to refine your craft (think mastery because this is where the profits are), cater to a wider client and customer base, has little to no cost to deliver in addition to what you’re already doing, and is simpler to grow.
When it comes down to the numbers, I don’t recommend people expand their offers until the business is generating approximately 25-30% in net operating profit so that you can finance expansion from growth without needing debt (or less of it) and avoids you getting into a cash flow quandary.
In this weeks blog, I discuss in more detail 10 different ways that you can sell 1 product or service. This helps you not only diversify your income streams, but will allow you to be more profitable (keeping more of what you make).
1. Subscription Services
Example: If you sell a product, consider offering a subscription model where customers receive the product regularly (e.g., monthly or quarterly). This not only provides consistent revenue but also fosters customer loyalty.
Benefit: Recurring revenue streams and increased customer retention. It’s like getting a sample of the cake… they’re gonna want the whole slice eventually.
2. Bundling and Packages
Example: Combine complementary products or services into a bundle. For instance, a med spa could offer a package that includes a series of treatments at a discounted rate compared to purchasing each treatment individually.
Benefit: Encourages higher spending per transaction and introduces customers to additional offerings.
3. Tiered Pricing
Example: Offer different pricing tiers for your services, each with varying levels of features or access. This could be basic, premium, and VIP levels, catering to different customer needs and budgets.
Benefit: Attracts a broader customer base and allows upselling to higher tiers.
4. Add-On Services
Example: Provide optional add-ons that enhance the main product or service. A software company might offer additional features or premium support as an add-on to their basic package.
Benefit: Increases average revenue per customer without significant additional marketing costs.
5. Customizable Solutions
Example: Allow customers to customize their product or service. A bakery could offer custom cakes where customers choose flavors, decorations, and sizes.
Benefit: Meets specific customer preferences and can command a higher price point.
6. Training and Workshops
Example: Offer training sessions or workshops related to your product or service. A med spa could provide skincare workshops (parties) that introduces clients to the full suite of skincare they need to achieve elevated results and how to use in them and what order.
Benefit: Generates additional income and positions your business as an industry expert.
7. Digital Products
Example: Create digital products such as e-books, online courses, or webinars that complement your main offering. A fitness trainer could sell workout plans and nutritional guides online. If your business normally sells to consumers, what is something you could offer B2B (business to business). You’re already doing the work, why not record it and make it a product?
Benefit: Low production costs and the potential for high profit margins.
8. Licensing and Franchising
Example: License your product or service to other businesses, or offer franchise opportunities. A successful café could franchise its brand and business model to other locations. Knowing your numbers is important here as people want to make sure they’re buying a lucrative opportunity so data needs to support the offer.
Benefit: Expands market reach with minimal direct investment.
9. Seasonal Offers
Example: Develop seasonal versions of your product or service. A retailer might offer limited-edition products for holidays or special events. Or a chiropractic office may make a special offer for football moms during hectic practice seasons where they’re sitting on bleachers for long periods of time with bad posture.
Benefit: Creates urgency and boosts sales during specific periods.
10. Affiliate Programs
Example: Create an affiliate program where others can sell your product or service for a commission. A software company could allow bloggers and influencers to promote their software for a share of the sales. A med spa can partner with local businesses such as a yoga studio to promote holistic care practices.
Benefit: Increases sales without additional marketing expenses and everyone wins.
By offering your product or service in multiple ways, you not only diversify your income streams but also cater to a wider range of customer needs and preferences. This flexibility can help your business thrive in changing market conditions.
The most ensuring businesses evolve and not just by offering more, but by making their offer better. Growth isn’t always about more, it’s about better.
Work with your team to explore these strategies and find the one that is the best fit for your business to enhance profitability and ensure sustained growth.