3 Creative Ways Service SMBs Can Diversify for Post-COVID Growth
To say COVID-19 was tough on business is an almost comical understatement. At the peak of social distancing restrictions, in-person services were mostly shut down, consumers tightened their wallets as layoffs began to bite, and many small businesses had to carry out terminations of their own, which nobody likes to have to do.
Among SMBs alone, 28% were forced to cut their working hours, 26% to lay off staff, and 9% to close for good. Even among those that remained open, more than 50% saw revenues drop significantly. It meant that as well as coping with the fear of a new and unfamiliar virus, and anxieties about their own health and those of their loved ones, small business owners also worried about their economic and financial survival as foot traffic dwindled.
It’s no wonder that “new normal” ranked as the most hated business buzzword in a recent TrustRadius survey.
Business owners and consumers alike heaved a sigh of relief when 2021 arrived, and with it the promise of vaccines and economic recovery. In the US, at least, vaccination rates are relatively high, the economy is reopening, and consumers are spending again.
It’s time for small business owners to be optimistic about growth, but that doesn’t mean blindly returning to whatever you were doing in 2019. We’re in a different world now, post-COVID, and people are motivated by different concerns, like health, safety, and time with family.
SMBs need to add more creative ways to expand revenue and drive growth in 2021 if they want to see results on the bottom line.
1. Cross-sell products with your services
Diversifying is the name of the game for small businesses today, and that means thinking outside of the box. There’s no reason to change your USP to a service-based business, but you’re equally free to expand in new and innovative ways.
The new “packages” feature from vcita makes it easy for service-based SMB owners to cross-sell relevant physical products alongside their services. Use vcita packages to include physical products in a bundle with your existing services, so that customers have all they need to recreate your service experience at home.
For example, yoga teachers who teach online yoga lessons could sell branded yoga mats, yoga balls, or yoga bands together with yoga sessions. Hairstylists running DIY haircare courses can sell the specific line of hair products that they recommend to clients, while Mexican restaurant owners who are now teaching Mexican home cooking can sell the kitchen utensils, fajita spice mixes, and non-stick comals they use themselves to the customers who want to recreate their favorite meals at home.
Once you’re using vcita to sell physical products as part of your service packages, think about applying this new capability to create premium-level bundles that you can upsell to loyal customers. For example, use this as the basis of an omnichannel loyalty program that offers a free yoga ball for every 10 lessons. Or invite customers to upgrade their purchase of a virtual manicure tutorial to a higher-priced option that includes their choice of nail polish and nail art stickers as well as a personalized, one-on-one session.
2. Form partnerships with complementary service providers
Collaboration is another key tactic for success. Look for partnerships with businesses that complement your services so that you can form new service bundles that offer a complete experience for your customers.
For example, a web development agency could partner with a photographer to provide customized, professional images for their client’s new website, or freelance writers and graphic designers could pair up to offer a full website design option that includes both copy and design.
This way, both of you can charge more for your services as part of an end-to-end service package.
It’s up to you if you want to form an equal partnership or white-label the other company’s services. If you have a more established reputation, the other business owner might be very happy to provide services under your name, in exchange for access to your clientele.
3. Expand your digital service offering
You’re eager to get back to in-person interactions, but not all your customers feel the same way. By the end of 2020, only 24% of Americans said they feel safe about engaging in “normal” out-of-home activities, which is only a slight rise from the 20% who felt ready in October. Just 36% are actually resuming any interactions out of the home.
Deloitte predicts that online SMB interactions are likely to expand and in-person ones to decrease over the next year, showing that the shift to digital is likely to endure for the long term.
Now is not the time to abandon your pivot online. On the contrary; you should look for ways to expand your digital service offering and make it even stronger.
SMB owners need to think creatively to add online services. For example, financial advisors might have only offered business finance coaching, but now it’s time to add sessions for personal finances as well. A handyperson business that sold generic “how to fix your leaky faucet” tutorials might start offering one-on-one sessions that walk the customer individually through their home repair issue.
It also helps to expand your services across more channels. For example, if you’re using email to sell services, start marketing them on social media as well. If you’ve been hosting tutorials on your website, use live video too. For example, Amy Porterfield, a marketing educator who sells courses powered by the Kajabi platform, regularly shares tips with her audience on Facebook Live.
Deloitte found that SMBs that use multiple channels see an average of 4.9% more revenue growth annually, which translates to close to $160,000 per year for the average SMB.
Recovery isn’t automatic in 2021
SMBs don’t have to remain stuck in their early 2020 business game. COVID-19 brought new challenges, but it also pushed many SMBs into new ways to generate revenue and drive growth. By improving adding more digital services and marketing channels, cross-selling products alongside services, and forming valuable partnerships, SMBs can continue to thrive even through a rocky recovery.
