Diversification of service offerings is a buzz phrase at the moment, and for good reason. Businesses are expanding their range of products and services so their attractiveness to customers is retained and their customer service proposition is strengthened. Expanding their reach also helps to ensure the business owner benefits from additional sources of income to help see them through the challenging years ahead. So how can you diversify your business to survive the downturn?
There are three very important benefits of diversification that you must first be aware of:
- It broadens your offering, making your services more attractive to more customers;
- It mitigates lost revenue streams and allows continued involvement in business; and
- It creates annuity streams and provides you with an asset that you can capitalise on when selling your business.
Diversifying allows your business to better cater to your customers’ needs while helping to guarantee its ongoing success.
In a volatile economic environment (granted, it is slowly improving), assuming that your industry and your customers will return to the ‘normalcy’ of previous years can be dangerous. Some businesses have emerged as new leaders, while some have downsized, consolidated or disappeared altogether.
At the same time, Australians have become more cautious about how they spend their money, especially when trusting it with new players. This gives established businesses an advantage with both current and existing customers.
What every business owner should consider carefully is consumer sentiment. How are your customers feeling about their current situation and their future needs and wants, and how can you capitalise on this?
If you can adapt and expand your business to provide more solutions – becoming more of a ‘one-stop-shop’ – and you do it well, you should see growth and the potential for more to come. In an increasingly time-poor society, customers greatly appreciate convenience. Isn’t your duty of care to customers to give them the knowledge, support and range of quality choices they need to make a number of informed decisions? Who better to help them than you? Of course, you need to take the time to educate yourself on your business’s additional products and/or services then continue to keep your skill level at prime.
At Mortgage Choice, one of the major goals we have with the recent diversification of our offering to include ‘non-core’ products such as risk insurance, asset finance and commercial loans is the potential for extra income for our franchisees – each of whom are small business owners – and for the company as a whole.
Our customers benefit because they can access a wider range of services all from the one contact point and often within the one meeting. This, in turn, demonstrates our commitment to the duty of care we have to customers as their provider of financial solutions. The importance of this should not be underestimated.
Of course, any new product or service must be a good fit with your current offering. Your goal by diversifying should be to provide add-ons that make sense, and complement your current customer service proposition.