- 3-Minute Article
Diversifying Your Revenue Stream
What’s good for your client’s business is good for yours.
It's a difficult fact for successful business owners to own up to: you don't know what you don't know. Whether it's a small business or a Fortune 100 company, owners have built their foundation and grown their revenues by knowing what their customers want and how they want it delivered. Why even think about changing something that has worked so well, maybe for a very long time?
It's simple. Times change, and customer tastes and needs change, too. As a financial professional, it's up to you to ask the tough questions. Is your client prepared for a downturn in the economy? Or a shift in market trends? What will your client's company look like in five years, or 10, or 25?
Cautionary tales litter our economic history. The decision makers behind such one-time invincible brands didn't appear to see the handwriting on the wall. They may have either refused to vary or expand their product offerings, or may have been too slow to pivot into the next era. Hindsight is 20/20, but diversifying revenue streams may have saved the day.
Financial professionals can be instrumental in helping avoid these mistakes by working with clients to assess and reassess their professional as well as their personal financial goals. Diversification is a smart strategy in both worlds.
It's also a smart strategy in your world. The most successful financial professionals are always learning and evaluating. They take their own advice to heart. They diversify and pivot to remain as innovative as their most successful clients.
This means taking a holistic approach to business, to financial management, and above all, to the future. We all know that client needs run deeper than money. It's about planning a life, which is a daunting picture to view and a tough task to break into manageable chunks. But it's possible for your clients and for you.
Just as you ask your clients to step outside of their comfort zones, never hesitate to move beyond the financial strategies that have always worked for you. In fact, some basic tactics for diversifying your clients' business revenue streams have a direct parallel in diversifying your revenue streams as a financial professional:
TALK TO PEERS.
Ask the opinion of other successful business leaders. Find out what has driven them and makes them successful. Hold brainstorming and visioning sessions where the future is mapped out, five years at a time.
Do the same with financial industry peers. As a financial professional and an independent agent, it's easy to create territorial boundaries. Break them down. Without ever needing to divulge trade secrets, collaboration is essential to innovation. Great ideas rarely happen in isolation.
TALK TO CUSTOMERS.
Formalized market research is important, but so is anecdotal feedback. It's easy for business owners to get so caught up in the daily details that the big picture is out of focus. Your clients may send out surveys. Pick up the phone and talk to their best customers. Ask what's working well, and where there's room for improvement.
Yes, you're a financial professional and your clients come to you because you're their source of information and guidance. But the best relationships are rooted in ongoing dialogue. Talk to your clients about the service you're offering and their satisfaction with their portfolio. Have they heard about other investment vehicles? Have their goals changed without them even realizing it? Probe a little. Even an offhand comment may give insight into new strategies and directions.
KNOW WHERE YOUR INDUSTRY IS HEADING.
Read, read, read. Forecasters and analysts are everywhere, flooding trade publications and the Web with data and insights. No matter which space or niche your client's business occupies, there's plenty of information to chew on and interpret. When we look back on recent history, we can see the clues about market changes and economic downturns were right there in plain sight for anyone who cared to see.
Know the financial products available, the updates and innovations capable of transforming the landscape, and the combination of financial tools and investment vehicles that can help your clients succeed personally and professionally. Resources such as BrighthouseFinancialPro will help you stay on top of the latest information about annuities, disability insurance, and life insurance, and can give you effective ways to further personalize your services and increase your value to your clients.
TARGET NEW CUSTOMERS.
Step back and be willing to mix it up demographically. If the business has always served males aged 50-65, is there a complementary product or service that focuses on the next generation down — whether male, or female, or both? Naturally, your clients should never turn their backs on the offerings and qualities that have made them successful. But devising ways to broaden their appeal to new markets and targets is never a fruitless exercise, and can give an energizing jolt of creativity to even the most complacent business owner.
Learn more about the clients you haven't gotten to know. You may assume your best clients will refer you, but it never hurts to ask for introductions — to husbands, wives, children, friends, coworkers. Millennials are aging into responsible adulthood, bringing with them maturing hopes, dreams, and goals. As a financial professional, do you know the strategies that reflect the values of this next wave of clients? And if not, isn't now the time to find out?
The bottom line is that a narrow line of thinking narrows your clients' prospects as well as your own. Our industry asks us to understand risk and gauge our clients' appetite for it. Here's a piece of client advice that applies to both sides of the table: Finding new ways to diversify your revenue streams may seem risky, but the real risk is not doing anything at all.