There are two types of businesses, those who sell products and those who monetize everything.
Monetization is a relatively new term or at least the use of it to signify turning a regular activity into a revenue stream is rather new.
The term was initially popular for banking and trading operations and while it has been used to signify the conversion of business operations into money, it hasn't been used with a broader meaning and as often as it is today.
It was first popularized in YouTube marketing circles and primarily denotes the action of turning something regular you are doing into a money stream for yourself or your business.
Vloggers, or people who capture their daily lives in video form and share it on the internet, are the biggest culprit of the "monetization" of every aspect of your life.
However, the mindset is starting to shift in the business circles as well.
Although the examples of businesses implementing the strategy successfully are only a few, it's becoming obvious that marketing and revenue generation can go hand in hand.
If you are still rather confused, let's get a bit more in-depth about how a business in 2020 can diversify its revenue streams via monetization and achieve its marketing goals AT the same time.
Before we dive into the topic of revenue stream diversification, we need to tackle the generic structure of revenue streams in a business today.
The most common meaning of the term is as simple as it sounds.
A revenue stream is a source of revenue for your company. Simple and concise.
This stream can often be recurring, such as in subscription-based models, transaction-based, as in a B2C transaction, or project/service-based, such as in digital agencies and construction firms.
Usually, within the broader business model, a revenue stream is a rather obvious part.
In fact, when most people think about starting a business, they often consider the revenue stream as a starting point.
"I'm going to sell X."
Here, the sale of X is the action that the business takes. It becomes the main operation of the business.
The money that comes from the sale of X is the actual revenue stream.
Shifting your mindset to consider the action to be separate compared to the revenue stream often helps business owners and founders focus on the importance of bringing money to the company separate from the main operations as a whole.
It also helps you separate the main activities and ensure that they are properly tracked and optimized.
The revenue stream composition is part of the revenue business model. It usually consists of three main portions.
By understanding the composition of your revenue stream better, you'll be able to focus on the most important aspects of the revenue generation process related to that particular stream.
Now, it's time to talk about diversification of that revenue.
Now that you are familiar with the general idea behind what a revenue stream is, it's time to get actionable.
Let's go through the steps you need to take in order to diversify the revenue streams for your business.
If you don't have a business structure, now would be the time to build one.
For the purpose of this exercise, we need to focus on the main operations of the business.
Anything that would fall into a category where you do an action that has a specific audience of customers, it would be an operation.
Here are a few examples.
All of these operations considered touchpoints across the customer journey, have one main thing in common. Yes. I'm talking about the customer.
Some businesses become so involved in optimizing their customer journey that they often forget that each of these points is also the opportunity to do something new.
How to do it?
This step is one of the simplest to do.
Open up a Google Docs file and start listing all of the action your business and employees do on a daily basis.
Be as granular as possible.
Once the list is complete, go through each action and cross it out if it doesn't have a direct impact on what your customer or prospects interact with. Focus only on things they would see, hear or read.
Based on your judgment, write out anything you would deem reasonable as an operation that has an impact on the customer.
Once you have outlined the actions, write down the products that those actions are creating.
Make sure you are as granular as possible.
For example, a CTA is a product. An email is a product.
Don't think about a "product" in the sense of something you are selling, but rather an element that stands on its own.
This will help you achieve a more consistent follow-through on your categorization and the diversification of the revenue of your business.
Once you have written out the operations of your business that have a direct impact on the customer, consider the audience's interest or intent during each specific action.
Don't think about the purpose of the business for that action.
Rather than focus on the customer's goal.
Here are a few examples.
Make sure to focus on the direct benefit that the customer receives from the specific action.
Once you do, you'll have a more clear picture of what and how your business currently does that can be used as a revenue diversification tactic in terms of your operations.
This is the main step that will lead you to turn your regular business operations into true income streams.
Once you have the products of your business and the main benefits that the customer receives from those products, it's time to select the ones that you can turn into revenue streams.
For this step, you'll have to align with your creative side and think about the best possible ways to diversify your revenue.
Out of the existing list of products, select the ones that the customer has the biggest expected benefit that is in contrast with your current business goals in terms of your main revenue stream.
For example, a customer wants to read an article from your blog to learn more about the specific industry and topic.
In contrast, the business purpose of this article is most probably lead generation.
This makes it the perfect target for revenue diversification.
Once you have your targets, it's time to consider the way in which you can turn them into revenue streams.
We'll have a few examples listed below, but make sure to check
Once you have the list of products your that can help you generate more revenue, it's time to think about the different opportunities of how this revenue will be made.
After your brainstorm is complete, start considering the cost of action, whether it correlates to your existing business goals and the potential revenue you'll receive from that product.
All of those pieces of information will help you make a choice for which portions of your business you can turn into revenue streams.
Adding the revenue streams to your existing efforts and operations should be a relatively simple task.
More often than not it includes a few easy to implement steps.
The general impact is that you'll most probably need to add a trackable goal to an existing effort.
For example, your blog posts, instead of simply for SEO purposes, would now also be revenue generation opportunities.
In most startups, teams work very closely together, so it's easy to communicate the difference, the value and to add the additional tracking and to-dos.
However, if your startup is bigger, you might want to task your COO with the job to projectize everything related to the specific tasks that need to be done.
Depending on the method of revenue generation, the task lists will be shorter or longer.
As mentioned, for a blog, it might be as simple as adding a lift and shifting the content strategy in a new direction.
However, for social media efforts, for example, it might be a complete change to the whole social media strategy and might require a sales specialist and a business specialist to do outreach to ad agencies and to track promoted posts and performance to improve the value of the revenue generation.
This heavily depends on your specific business so make sure to do a proper analysis for this step.
While turning your existing operations into revenue generation streams is relatively easy and simple to do, you might want to consider diversifying your revenue streams further by adding new additional operations to your business and benefits for your customers.
One such example is merchandise.
If your brand is extremely customer and value-centric and merchandise would be something your customers will actively want to buy and wear, then it might be a nice choice for your company.
To help you out in the process, we're also here to outline the most popular revenue diversification methods in 2020 for small startups.
Let's go through them one by one.
The first and most infamous way to introduce a new revenue stream to your startup is through merchandise.
A highly popular method of revenue diversification, merchandise basically translates to pieces of clothing or relevant products that a third-party company creates with your logo/brand.
It's used by small businesses, YouTubers and big corporations alike.
Today, it's not out of the ordinary to see a button "shop" in the header menu of a website of brands you would never usually expect to sell merchandise.
(Similar to ours -- check the BAMF shop)
However, to implement this into your business, you need to first ensure that you have a strong brand.
Do you have values that your brand stands behind?
Do you advertise those values openly?
Do people see themselves in your brand?
If the answer to all of the above questions is "yes" then you are on the right track.
However, if you lack a portion of the "Brand" merchandise experience, then merchandise might not be the right fit.
Now, the process of merchandising is fairly straightforward for almost any brand today.
There are two main paths that you can take with your merchandise.
The first option allows you to have a better control over the products your brand creates.
However, there's an upfront cost to it and a storage fee that you'll have to infer with the company.
If you go with the second option, all you would need to start is click a button and upload a design. However, with the second option you pretty much have no control over the quality of the designs, the products or anything in between.
Now in both cases, to start out with merchandise...
All you would need to do is create awesome designs.
And of course, have people to buy them as a whole.
Another great way in which you can ensure that your company is stable when times get tough is through affiliate marketing.
Any type of content that you have and use can be monetized.
Whether via social media marketing or content marketing and SEO, companies and startup often end up creating owned content that has and offers values on its own.
What's wrong with monetizing it?
Quite the opposite, in fact.
You SHOULD monetize it.
To do so, you will usually need to become an affiliate or referral partner to companies in your niche that you would want to recommend or believe would benefit your customers.
The way the revenue system works is that if the customer purchases a product via your referral code or affiliate link, you'll get a specific percent of the profits for yourself.
Usually the percent is quite small, but it can definitely add up.
While you can recommend pretty much any product you'd like, I'd personally recommend that you stick to products you yourself would use.
Understanding your customer, trying out the products beforehand, and recommending actual products that they might use is certainly the right way to success with affiliate marketing.
The first step you need to take is to sit down and create a list of all the products that you've already recommended to your clients via your content.
Once you have a solid list, add any company that you think of that can potentially be a great recommendation for your customers.
The second step, once the list is ready, is to consider the media in which you would want to promote that specific product.
How does the product promotion fit the content purpose?
How will your existing content be affected once the promotion is added?
Make sure that any promotion you do CREATES value for your customer.
Another great way to diversify your revenue streams is through the creation of a new paid product that doesn't take away from your general operations.
The new product shouldn't take a lot of effort, time, money, or resources. It should be something quick, relevant to your audience, and something that expands upon the mission of your business.
Let's take a look at a few examples of such products.
One of the most infamous types of products that both influencers and companies make is books.
Usually centered around the specific educational content and/or expertise of the company/individual, books are an easy way to boost your revenue generation, while educating your audience.
The biggest benefit of books is that it further leads people down the nurturing funnel related to your broader business. It also helps you achieve better levels of brand awareness across the board, reach new audiences and in some cases, even gain PR coverage related to your brand.
Another great benefit of using books as a revenue diversification for your business is the fact that they can often closely align with your existing content strategy.
For example, if you have a running blog, where you share the best tactics in your industry, it's easy to turn those blog posts into a full-fledged book as a whole.
Another perfect example of how books can help your business is the ability to use them as lead generation tactics.
While selling them does provide some profit, if you run a giveaway or a promotion at the right time, it might make or break your business.
Look no further for an example than my recent Product Hunt giveaway.
My books, which usually sell for hundreds of dollars, were available for free for a limited time, primarily due to the COVID pandemic.
Now, usually, I would give away only one of the books, but this time, it just felt like the right thing to do.
The result? Dozens of hot leads coming my way and hundreds of people downloading my books and getting familiar with the BAMF brand.
How crazy is that?
And all of that wouldn't have been possible, unless I had books as an existing tactic in my business playbook.
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Okay. You're probably already familiar that EVERYONE does webinars.
Basically livestreams with a business purpose for lead generation and nurturing, webinars have taken the b2b world by storm.
They are simple and easy to make and allow you to connect with your audience in a direct manner via video and live chat.
Long-Form Video Content for Repurposing
What's more, they create an endless stream of content that you can repurpose for various other purposes.
And I'm talking LONG FORM video content.
This means that you'll have the ability to truly showcase your expertise, while engaging the audience with entertaining and educational content, depending on your style and preference.
One rather stealth way to turn webinars into a revenue diversification for your business is also available if you decide to do webinars.
It includes the so-called "members" calls and is usually part of an insider club. (Something we're going to discuss in the next paragraph)
These calls are usually a more interactive version of a webinar and are behind a paywall.
Once accessed, these calls allow for the customers to have a closer relationship and understanding with the service provider, individual, influencer or brand.
The paid calls are not necessarily a great way to diversify your revenue, but if you are already planning to do some sort of webinars and have the necessary equipment and webinar software, it might be worth trying out.
Who doesn't like being a part of an exclusive group of bad*ss people? [Join the BAMF Facebook group right now!]
And well, some business owners put their exclusive groups behind a paywall.
Depending on your industry, the content you have to share and the value of the insider tips, having a paid insiders club can be a great additional revenue stream for your startup.
While a bit trickier to execute in the B2B space, exclusive clubs are well-known tactics for businesses in the B2C eCommerce world with brands often offering discounts and additional products and value to their customers.
Most recently, the "clubs" in the B2C space turned into subscription-based revenue generators with most brands sending their customers random "gifts" and "products" either in the form of subscription boxes or just as a surprise delivery depending on the offering.
While some might argue that the subscription model is not beneficial to the customer, more often than not the value provided exceeds the usual value that one would generally receive for the same amount. (Just think of Netflix)
Courses are near and dear to my heart as I'm currently developing one, based on my existing books.
Want to get notified when I release the LinkedIn Academy?
A top of the line premium course for ture LinkedIn influencers and thought leaders, to be available soon.
Most people would consider courses to have a rather negative connotation due to the saturation of individuals with little to no experience making and selling courses online, I would argue the opposite.
Video marketing is on the rise and there's no doubt that people are shifting towards content consumption via video.
After all, when was the last time you READ a guide on a tactic, when a video was already available on YouTube?
Videos allow us to connect, follow-through and experience content far more naturally than written guides.
And while there's still ENORMOUS value in written work (you are reading this right now), there's still a huge benefit of having that work translated to video in the form of courses.
Courses can both be free, as a lead generation tool, or paid, as a revenue diversification method.
Usually, due to the time it takes to write, shoot and edit the courses, they are paid.
However, depending on the nature of your business, it might be more beneficial to offer them for free or have both options on your site.
Just take a look at Hubspot.
They basically built an empire on the back of free educational content and courses.
And who's to say this isn't great.
So, if you plan to create courses, make sure to decide prior to making them how they fit your overall revenue generation model as a whole.
Last, but not least, if software is the biggest strength of your company, you might want to consider the creation of quick and small tools.
It's obvious that you don't want to fall into a rabbit hole of being a company with two products.
But I'm talking about quick, easy and small tools that everyone could benefit and which can be coded in just a day or two.
Also, the product should seamlessly integrate into your existing brand.
You certainly don't want to spend too much time and effort on either creating or selling the tool.
Think about something that can be made quick and easy that will help your audience.
If you already have something it mind, it might be a great revenue diversification for your brand as a whole.
And it certainly doesn't hurt to try.
Business is business after all. Would you agree?
Do you agree with the list? Is there a revenue diversification method you would want to add to the list? Am I missing something here? I would love to hear your comments (both positive and negative) down in the comments section below. Let's chat!