The Importance of Secondary Revenue Streams

Dictionary definition: Revenue derived from goods or services other than a company’s primary product offering Our definition: All that $ (sometimes pennies, sometimes by the 100s) that gets added directly to your bottom line each month from services outside normal business activities SOCIAL MEDIA OVERVIEW

Why is Secondary Revenue Important? Allows for revenue diversification vs. putting all eggs in one basket Enhances main services or product lines Allows for additional company growth WHY IS SECONDARY REVENUE IMPORTANT?

Airlines Primary revenue: ticket sales Secondary revenue: Baggage fees, snacks, wifi, etc. Gas Stations Primary revenue: fuel for cars Secondary revenue: car wash, snacks, etc. EXAMPLES OF SECONDARY REVENUE

Creative Marketing Firm – Primary revenue: consulting – Secondary revenue: promo items, printing, design, etc. EXAMPLES OF SECONDARY REVENUE FOR MARKETING FIRMS

HOW TO IDENTIFY POTENTIAL SECONDARY REVENUE STREAMS

Review current product or service offerings Identify additional product offerings that would compliment or help clients make better use of current offerings: – Examples: Marketing firm offering strategy and campaign management could offer branded promotional items Building supply company selling drywall, timber, siding, etc. could offer safety helmets or workwear STEP 1: INCREASE PRODUCT OFFERINGS

Identify additional professional services that would compliment current offerings: STEP 1: INCREASE PROFESSIONAL OFFERINGS Provide external training/ consulting (empower client to execute social media initiatives in-house) Purchase company camera and provide client with photography services instead of outsourcing

HOW TO INCREASE SECONDARY REVENUE STREAMS

Always mark-up outsourced services – Average margin should be between 30% - 40% Lower vendor costs = higher secondary revenue potential – Examples Printing, design, web, promo items, etc. STEP 1: MARK-UP OUTSOURCES SERVICES

Promote secondary revenue services – on website, proposals, contracts, via social media, etc. STEP 2: PROMOTE SECONDARY SERVIES Provide employee incentives to push secondary revenue services and client incentives to use your company for all industry-specific needs Educate clients and employees employees on how secondary revenue services add value

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