Businesses worldwide are facing tough times as we move into the second half of 2021. COVID-19 impacted almost every industry and every vertical at every level, from large corporations included, to small businesses.
According to McKinsey, 80% of UK SMBs reported increasing or stable revenue in 2019. However, one year later, the same percentage said that revenues are decreasing. The same McKinsey report showed that 60% of British SMBs were expected to close permanently by April.
Brick-and-mortar business owners and those who depend on their ability to provide services in person were concerned about infection and lockdowns. This made it more difficult for them to move transactions online. Consumers have had to adapt to remote service delivery. They can check their bank balances online and order takeout from apps.
It may have taken a pandemic for them to move online but consumers now enjoy the speed and convenience of digital services in Los Angeles. Braze conducted a global study and found that 29% would shop online more in the event of the COVID-19 pandemic. The main reason for this was convenience, not health issues. The study was limited to physical goods but people don’t expect to feel differently about the delivery of services.
Businesses are forced to diversify because they cannot keep up with a growing client base that is increasingly digital and a contracting economy. If you are an agency, diversifying services can strengthen your business proposition, make you more resilient, and open up new revenue streams. It also helps you provide greater value to clients.
Diversification can be difficult, however. These are the key points to remember to diversify and strengthen your market share as the small-business ecosystem recovers in 2021.
Be true to your strengths
Assessing your current skills and abilities is the first step. This will allow you to identify your strengths and weaknesses. You can map your strengths and weaknesses to help you identify areas where you are superior to your competitors. This will allow you to create a new service.
Also, you need to have a complete understanding of your assets so that you can find ways to use them differently. You can pivot some assets like data into a completely new service without major capital investment.
You can diversify into new services to increase your revenue stream. But focusing on the areas you excel in will allow you to do it more effectively, build a reputation and attract new clients.
Understanding Client Need
The next step is to analyze your market. Trends change at lightning speed, so it’s impossible to assume that your clients still have the same needs as they did a year ago or six months ago. New diversification opportunities can be found by analyzing client demand.
If your clients include lawyers, you may find that this sector is in demand of assistance with safety and health guidelines. These guidelines were not available before the pandemic. Simple improvements in customer experience are a strong diversification strategy that increases the value your clients receive and boosts their loyalty, thus increasing resilience.
PWC found that consumers will pay up to 16% more if the services are provided with better customer service. 77% of consumers would recommend a business that provides personalized service. 42% would prefer a warm and welcoming experience.
These are the things that you can offer clients, and you will likely see more demand.
Establish effective relationships
Reseller partnerships are a great way to diversify. They allow you to offer a whole new set of services to clients with minimal expense.
Partnering with value-add resellers could be a way to add your flair and improve white-label products before they are sold. You have the contacts and the expertise, and your partner sees increased sales. In return, you receive a portion of the deal.
Reseller partnerships can be a great way to diversify. They allow you to create new revenue streams and/or expand into new markets without the need to hire new staff or buy new equipment.
Don’t Overstretch Yourself
As you diversify, keep your core competencies in mind. Expanding is the key to successful diversification.
Marketing agencies could, for example, use a platform such as vcita’sxperts to offer education in lead nurturing automation, and other business management tools. This would be on top of their existing do-it-yourself services.
This diversification will help you provide better CX and increase client acquisition and retention. You’ll also be sharing the knowledge you already have, which will open up new revenue streams while maintaining your business stability.
Convert Services into Products
Also, New York digital service providers need to explore the possibility of converting their services into assets or products. Web designers in Miami might sell templates or offer online courses to help solopreneurs build their business websites. White papers could be created by business consultants to explain how to select the best data visualizations. This would complement their existing services, which guide SMB clients through their data.
This allows you to diversify and create new revenue streams, while also allowing you to move online. Service providers that are unable to communicate their services in person can now sell digital products online.
Diversification can not only open up new revenue streams but it can also help agencies stay afloat in times when their normal line of business is closed.
Smart Diversification is the Way to Recovery
Agency diversification is required in the new post-COVID world to increase revenue streams, expand markets and sometimes compensate for business models that are no longer feasible in a digital age.
Service agencies can increase their resilience and profitability by focusing on market needs and strengths, while also establishing new relationships and product offerings and retaining existing skills.
