A business may officially define itself by its core service or product – on its “About Us” page, on social media, etc. – but it is everything that orbits that core offering that makes up a business’ value.
You can use Apple as a popular example. Their flagship product, the iPhone, is flanked on all sides by supporting services, like music streaming, wearables, health apps, cloud services, and a clutch of other offerings. Would Apple be profitable without these auxiliary services? Probably. But would it be the all-encompassing, all-embracing, full-service juggernaut we know today? Certainly not.
Or take the more recent example of Nobul, the real estate digital marketplace popular for its consumer-driven approach to finding a real estate agent. Recently, Nobul CEO Regan McGee announced the company would add “interesting functionalities to (the) platform including auxiliary services (like) insurance, mortgages, etc.”
There are several advantages to adding these “auxiliary services” to your business. This article lists a few for business owners to consider as you expand and extend your company.
Diversification
A commonly cited reason to add auxiliary services is to diversify. Diversification is a critical strategy in business, as it is in investing. The idea is to mitigate risk by pleasing a wide variety of consumers. As you diversify your offerings, you (hopefully) diversify your consumer base.
Several external factors can pull a specific customer away – competitors, economic and global circumstances (like the pandemic), changing expectations, etc. But those external factors would be hard-pressed to pull a diverse set of consumers away from you.
Loyalty and Longevity
Auxiliary services can be a fantastic way to promote loyalty among a consumer base. As you add more services, you add value. These new forms of value give legacy customers the (rightful) impression that you care about keeping their business and are striving – not to change your business – but to build upon what they initially loved about it.
Consider an ice cream shop that you visit regularly. One day they add sprinkles – free of charge. The next day, they add sprinkles other a (literal and proverbial) cherry on top. With each extension of value, you secure their loyalty.
An end-to-end experience
In the Regan McGee interview quoted above, which the innovator gave for mediumhe cites his reasons for adding auxiliary services: “We’re building the world’s first end-to-end technology platform for real estate transactions.”
“End-to-end” refers to a business model that collates and consolidates everything a consumer needs to start and finish a particular process, whether it’s a work project, personal goal, or – in Nobul’s case – a complex financial transaction like real estate .
By adding auxiliary services to your business, you can essentially make your company a full-service provider. From a consumer perspective, the end-to-end approach is convenient, removing the need to chase down various third parties and alternate service providers. From a company perspective, it’s a savvy consumer retention tactic.
Internal Excitement, Reinvigoration
Finally, as Harvard Business Review points out, introducing new offerings can “invigorate the company’s best people and enhance the company’s ability to recruit new forces. New products build confidence and momentum.” Think of adding auxiliary services as a fresh jumpstart for your company, one that re-asserts your business as a forward-thinking leader in your space.
Remember, while your company may define itself by its core service, you should never be limited by it. Adding auxiliary services can promote retention, mitigate risk, build company confidence and create an engaging end-to-end experience.
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