We’ve spent a lot of time in these blogs looking at how to plan ahead, forecast, and scale your business for profitable growth.

If we’re looking at it holistically, though, what have we really learned this year?

In a recent conversation with a business colleague, I asked, “What’s the best decision you made during the pandemic?” He thought for a second and then said, “Diversify.”

A business with multiple fronts won’t sink just because one front goes dormant. It has other fronts available to help carry the load.

My colleague went on to say, “Even in the worst times of the pandemic, some aspect of my business was doing well.”

For him, diversification hadn’t been an intentional strategy. But in hindsight, he thanked God that he happened to diversify before the pandemic, or he would have been sunk.

The bottom line is this: diversification isn’t optional.

The Key to Diversifying

The biggest key to diversification is liking success. It might seem too simple at first, but remember that liking success isn’t the same thing as liking the job.

There are always going to be aspects of a job that you don’t particularly enjoy. Who likes unloading trucks, or pushing cases across the carpet? We don’t do these things because we like them. We do them to get to the fun part; we do them to succeed.

In our line of work, events are always going on, even in the “slow season.”

For example, corporate events are generally seasonal, and when that time period is over, the off season arrives. Some owners will scoff at off-season opportunities — maybe a summer festival or concert. Why? Because they don’t like working those particular types of events.

This isn’t liking success.

Owners need to ask themselves, do I want to diversify? Do I want to stay busy year-round? Do I want a continual return on my investment?

When owners complain about the lack of work in the off season, I tell them it’s like complaining about the weather: people complain, but nobody ever does anything about it.

Do you want return on investment, or do you want to enjoy every single thing you do?

If you want ROI, diversify.

So don’t focus on the negative. Play the long game and focus on the overall success of your business.

What Is Diversification?

There are two main types of diversification:

• Complex
• Complementary

Complex diversification, which we won’t spend much time on here, is like having a diversified portfolio. It protects your investments from sudden fluctuations in specific markets.

In the world of business, it’s like owning an ice cream stand and a car dealership. The two businesses have nothing to do with one another unless you set up the ice cream stand at the car dealership. Even then, they’re only marginally related.

Nevertheless, if the bottom falls out of the car business and there’s a sudden rush on ice cream, you’re still in the game.

Complementary diversification remains focused on the same market, but finds new ways of increasing your revenue within that market.

We’ll take a closer look at complementary diversification for the reminder of the blog.

Complementary Diversification

Complementary diversification can be divided into two subcategories:

• Channel Diversification
• Customer Share Diversification

Channel diversification focuses on WHO you serve.

Customer share diversification focuses on WHAT you do for your clients.

Let’s look at these two categories a bit more closely.

Channel Diversification

The pandemic taught us that businesses are valuable to different clients than they had in the past. An important aspect of diversification is access to more customers.

Channel diversification is selling the same or similar products, but to different customers.

This is the seasonal events example from earlier. Your company already does events for corporate clients, but you move into serving entertainment customers in the summer.

You find success by adding a new type of client. You tap into a new customer stream without changing your product.

This isn’t about what you do, but about who you serve. New customers mean more business. More business means higher ROI.

Customer Share Diversification

Customer share diversification is a way to offer additional services to the same customer who plans on purchasing them anyway.

Imagine you have a customer who’s going to spend $100,000 on their event, and you’d normally see about $20,000 of that. Customer share diversification asks, how do you get a bigger share of that customer’s buy? How do you get to $40,000?

The way to gain more of the customer’s buying power is to add more services. What are the customers going to buy anyway that you don’t currently provide?

Whereas channel diversification was about who you’re selling to, customer share diversification is about what you’re selling.

There are two types of customer share diversification: concurrent and non-concurrent.

1. Concurrent Customer Share Diversification

Concurrent customer share diversification means you provide new services alongside the event. In other words, the transactions for the event and for the new services happen at the same time.

For example, if your clients usually order potted plants and other décor for events, you might subcontract with a plant rental and fresh flower business to meet that need. Or you might provide stages, pipe and drape, or scenery.

They’re going to buy from someone; it might as well be you. Expand your thinking on what services your company can provide. Identify recurring needs among your clients and look for new ways to fulfill them.

2. Non-Concurrent Customer Share Diversification

Non-concurrent customer share diversification means you provide services that occur before or after the primary event offering.

For example, if a client needs content creation services — say, producing videos to be used at the event — or attendee registration services, you find a way to deliver those to them. Services like these are needed weeks ahead of time, so they don’t compete for the resources needed to actually carry out the event.

Non-concurrent services are the most difficult to identify because they can be way outside the box. But if you can spot them, they’re ripe for the picking.

Diversify, or Else

If you fail to diversify, customers will increasingly see your business as narrow, as a specialist instead of a general contractor. Virtual events, for example, are here to stay. Clients now routinely look for this service. Are you diversified enough to accommodate them, or have you been relegated to live, in-person events only?

The companies thriving right now — the ones that came through the pandemic with more customers, more cash on hand, and a steady pipeline — are the businesses that diversified.

If you like success and want more of it, you can’t just dabble. Change is constant and success takes continual effort, so diversification is more than a one-time overhaul. You have to commit to diversifying to the point that it becomes part of your core offering.

It needs to become your way of doing business.

Diversify and thrive. It’s that simple.