Building Diverse Revenue Streams

The Power of Diversity

Diversity in your product and service offerings provides your potential customers with more choices. When you offer a range of related products and services, customers are more likely to find something they want to purchase. Furthermore, diversity can increase the average order amount. By offering a variety of items, customers are more likely to purchase multiple items, thereby increasing the average profit per order.

However, it's important to note that diversity can sometimes confuse customers. Therefore, it's wise to test different approaches to find what works best for your business. Some marketers find it more effective to focus on making a single sale initially, without any other offers that might confuse a customer, and then follow up with related offers at a later time.

Maximizing Customer Lifetime Value

Many marketers are content to sell a single product to a customer once and then forget about that customer, focusing instead on acquiring new customers. However, this strategy overlooks the potential profits that can be gained from additional sales to existing customers.

The best customer is one that already trusts you and is satisfied with their previous interactions with your company. Since people prefer to do business with those they know and trust, additional sales to existing customers meet with less resistance.

You've invested valuable resources to acquire your customers, and likely had to overcome some initial distrust when they first purchased from your company. If you continue to deliver solid value through related offers and maintain their satisfaction through excellent customer service, many will be happy to continue purchasing from you.

Reducing Costs and Risks

Diversity can also reduce marketing and fulfillment costs. Many marketing costs are the same, whether you promote one product or several. As you add new products or services to your line, each shares the marketing costs with all the others, reducing per-item marketing expenses.

There is no customer acquisition cost involved in selling to existing customers, making these sales more profitable than initial sales. Processing an order for multiple items involves nearly the same amount of labor costs as a single-item order. Additionally, per-item shipping costs are reduced when you ship a multiple-item order in the same shipment.

Diversity also reduces business risk. If you diversify your line instead of putting all your eggs in one basket, a dip in sales in one area of your business will have less of an impact. You won't be totally dependent on a single income stream.

A Proven Method for Rapid Diversification

While it's always recommended to market at least one of your own core products or services that you have exclusive control over, acquiring or developing your own products usually takes time.

One way to diversify rapidly is by reselling quality products or services from other suppliers. These should be related to the specific interests of your existing clients and prospects. You could set up drop shipping arrangements with suppliers, or join affiliate programs, which are the online equivalent of drop shipping, without many of the usual hassles involved.

In conclusion, once you've struck "Internet gold" with one profitable product or service, you can extract more gold from the same mine shaft, so to speak, by diversifying and expanding your line of products and services around your chosen theme.