What your core business might be hiding
Companies all over the world are constantly trying to scale, and it’s no surprise that many of them run into challenges when doing so. Finding a blue ocean in today’s market is nearly impossible, not to mention that creating new products come with a variety of risks that often don’t pay off.
While mergers, acquisitions, and product launches are usually the route organizations go to find new revenue streams, many businesses don’t realize that looking within their organizations can unveil new revenue channels that already exist in the current product set. This is known as an Edge Strategy, stemming from L.E.K.’s Alan Lewis and Dan McKone book, Edge Strategy: A Mindset for Profitable Growth.
In simple terms, edge strategy is when an organization finds revenue in existing core programs and core products through optimization or re-thinking how the product is sold. Hence, there may be revenue streams sitting right under your nose.
Here’s a few ways you can employ an edge strategy to your organization:
Think outside the box
As organizations look for new revenue channels, many often find that their own products provide untapped opportunities for additional revenue. Especially as consumer demands change for how they want to consumer products, it’s important that you’re always looking at your business in different ways.
For example, perhaps your company offers products and services separately for various prices. What if you sold these in package form, charging at a tier-level and bundling products together? How about creating a loyalty program or adding account managers at an extra cost?
These are just a few examples of things organizations are doing, each coming with minimal cost and risk to your business. You may have to tweak something here and there, but you’re not deviating from the core of your business – you’re simply looking to the edge of it.
Install safeguards
In today’s online world, the threat of fraud is extremely high, especially with the on-slot of online transactions. Though the growth of online purchasing has breathed new life into industries across the map it also has created many backdoors for things many organizations wouldn’t even normally think about.
For example, if you offer an employee discount program, have you ever done a fraud assessment to see who is actually taking advantage of these discounts? It’s more common than you think that employees give these discounts to friends and family, which means that you may be unpleasantly surprised to find that a decent amount of people using those discounts aren’t actually eligible for them.
From an edge strategy perspective, this is lost revenue that can easily be reclaimed by simply optimizing this channel. By installing safeguards, such as employee eligibility verification to ensure only the employees who qualify are taking advantage of your corporate discounts, you actually save yourself revenue that otherwise may have been given away in discount form. That’s revenue back into your pockets.
As you consider new ways to bring in revenue, always remember that the first place you should look is at your own organization. Take the time to understand how your customers and potential customers are behaving, take a step back to analyze your current product and asset map, and assess the efficiencies of your products to see how you can repackage them. You might find that new revenue was easier to garner than you thought.
