No matter what your business, it’s all about bringing in revenue. Whether you do it with one great product or service or a diverse set of offerings, your bottom line is what counts. Let’s take a look and the top 5 revenue streams for agencies working in today’s complicated market.
Perhaps you have a terrific product or service that’s meeting sales expectations. That’s great, but margins on sales of goods can still prove weak, so it’s important to diversify your revenue streams.
First, we’ll touch on the different kinds of revenue streams, then we’ll give you the list of the top five that work best for many agencies. Brainstorm and think about which ones might work for your business.
Types of Revenue Streams
Basic revenue streams come in two forms: operating and non-operating.
Operating revenue is tied to sales of goods and services, and there are four categories:
- Transaction-based: a one-time or regularly occurring payment for a tangible product.
- Service: payment for time spent providing a service.
- Project: derived from larger tasks that customers pay for at specific milestones or upon project completion.
- Recurring: subscription services, rental agreements, advertising fees, or any income that flows in regularly over time.
Non-operating revenues represent activities unrelated to the core business objectives. These include interest earned from bank accounts, dividends from stock transactions, or rent on a building.
Successful companies need a mix of recurring and non-recurring revenue from different sources. If one revenue stream falls below standard, another can pick up the slack.
The Importance of Diversified Revenue Streams
Steady revenue is a key performance indicator for any business. It helps determine the health of your business and whether you’re a good investment for loans or capital. And it ensures you have working capital and can pay employees and professional dues on time. It allows you to grow your business to keep up with the market.
Steady revenue can be difficult to maintain, and that could hurt your stock price if revenue decreases even a little. It’s critical to keep revenue consistent so that you can forecast excellent dollars.
Diversifying your revenue stream makes sense from many standpoints. Deciding on a revenue stream depends on your current portfolio and the direction your business plans to take. Consider the following as you start brainstorming:
Your Customers’ Needs
The first thing you need to determine before you offer a product or service is to understand what your customers need and want. If you’re selling shoes, dig deeper to find out the specific attributes your customers value, like comfort. You can build on that concept.
As an agency, you can focus on customers’ needs by providing services that advance their business and minimize their costs. Surveys and reviews tell you what your clients consider important. Listen carefully and brainstorm solutions.
Be Proactive, Not Reactive
Solving your customers’ problems before they even know they have any is a great way to add a product or service. Put yourself in their shoes and anticipate questions or issues they might have.
Check out the services your competition offers, and put your own spin on them. Say a client wants to reduce downtime. You might have just the idea for this. Develop the solution and propose it to your current client base.
Don’t pigeonhole yourself into thinking you provide ABC and that’s it. XYZ might fit well into your mix with minimal effort. Build upon what you have; don’t be afraid to branch out.
Top 5 Revenue Streams
OK, so you’ve done the research and listened to your customers. Now you’re ready to tackle new revenue streams. While this list isn’t exhaustive, it will get you started on a more diversified portfolio:
Develop a course, guide, training manual or an e-book to teach your client valuable new skills. These detailed guides expound on the information offered free as lead magnets.
If companies lack the budget to hire you full time, they still could benefit from initial guidance to get started on their own. Be sure to outline other professional services an expert can offer as their companies grow. You ultimately want to be hired to help them take their business to the next level.
Marketing Strategy Services
Many companies have no idea where to start with a marketing plan. Offering strategic planning services opens the door to endless revenue possibilities.
Recognizing marketing trends and making forecasts is your forte. You devise plans for other clients and your own company, so why not offer this as a service?
Businesses can’t overlook social media, either. Many companies could use extra help in this area, with everything from creating messages and scheduled posting to analyzing the effectiveness of social media advertising.
You can advise clients on where to post, how often, and at what time of day. Whether you teach clients how to maximize social media or take on their social media strategy from start to finish, this niche isn’t going away.
If your agency has specialists who work in advertising, web page development, or marketing design, think about them as potential sources of additional revenue.
Offer services to create digital ads, banners, or brochures. This gives you the option of not only creating the ads, but also combining them with marketing strategies and executing them.
In our diverse society, companies sometimes get in trouble for poor word selection, advertising messages that don’t come across as intended, or inappropriate management behaviors. Your agency can offer creative services that help a company navigate the tricky waters of political or societal correctness to ensure their campaigns send the right message without offending.
If the damage has already been done through bad press, your agency can still help the company repair its reputation and regain customer trust through effective damage control. Design and execute a campaign that sends the right message.
Create case studies and testimonials for promotions. If a company doesn’t have a public relations firm or budget, offer strategic moves that slowly rebuild trust in the brand.
During the course of doing business, your agency may have developed a great solution that could benefit others. Maybe it’s software or an app that can be revamped and marketed on the App store.
If you haven’t agreed to exclusivity for the software or app, you could tweak it for sale on the general market.
Another unique solution is to partner with a complementary business. Affiliate links have proved popular and profitable even on a modest scale. Using affiliate links lets you advertise another company and its solution on your website, while the other company does the same for you. Some businesses provide nice bonuses for the opportunity to link on your site.
Effectively using affiliate links can help you reach an infinite number of potential customers. If that link results in a lucrative sale, the small percentage you share from that link is well worth it.
Creating productive affiliate links is an art form in itself. In addition to traffic, you can entice customers with well-placed leads, such as the educational material mentioned above; helpful links; and blogs that draw people to your page.
Take some time to review your product portfolio. Ask yourself what would happen if one of your revenue streams were to underperform or disappear. Do you have enough additional revenue sources to quickly adapt, or would it take some scrambling to make up the difference?
Even if you aren’t too worried and think you have a good variety of resources, it doesn’t hurt to open your eyes and ears to other possibilities. Some of the revenue streams mentioned are easy to implement.
Perhaps there are extensions of work you already perform for a customer. If so, you can be a one-stop shop for clients.
Additionally, if you gain a set of clients from a new revenue stream, you can cross-sell them on your tried-and-true product line. Regardless, diversifying product lines and revenue streams is an excellent strategy.