How makers can thrive while advertisers cut corners

by Ana Lopez

Opinions of contributing entrepreneurs are their own.

If you’re a maker, you’ve probably heard about the importance of diversifying your income streams. Chances are you’ve already done this successfully and if not, you may be wondering where to start.

Like any industry, the creator economy is not immune to the pressures of inflation. As dwindling brand sponsorship offers and ad revenue payouts put pressure on revenue, creators are increasingly looking for other ways to extract value from their businesses. But for many, the question then becomes how and when?

Not only do I believe that diversification is one of the key trends that will define the creator economy in 2023, but a recent survey we conducted also found that 70% of respondents taking into account additional revenue streams because of this economy. And rightly so: Diversification can help complement and cross-sell existing offerings, leading to increased engagement, retention and lifetime customer value.

But while it can be tempting to dive right in, creators should approach diversification strategically to ensure it brings more income and career stability by complementing and enhancing existing content rather than becoming a distraction.

I don’t just work with makers; I’m one, which has given me a front-row view of the overlooked pitfalls and powerful potential of diversification. There are no easy answers to getting this right, but here are some rules of thumb for any creator looking to diversify their offerings to stay competitive, meet the changing needs of the public, and survive in this economy.

Related: Why creators can weather a recession better than big companies

Don’t diversify without purpose

Let’s get this out of the way. Yes, diversification can be a powerful strategy for business growth, but you don’t need to diversify just because everyone is talking about it. And you certainly don’t need to be on every platform to leverage every possible revenue stream. In general, there are two main scenarios where diversification can be a good option for your business: when things work and when they don’t.

Diversification can be an effective strategy for creators who are already successful and want to take their business to the next level. If you have a large audience, generate significant revenue, and have the bandwidth to take on more work, now is a great time to expand and reach a wider customer base.

By diversifying, you can tap new sources of income and leads and communicate with your audience in an innovative way. According to a recent survey, 25 percent of full-time creators earn between $50,000 and $150,000 a year. survey from ConvertKit. Most do this by combining several sources of income, from online courses to paid newsletters, performances, coaching, merchandise or other streams. Our research shows that full-time creators rely on an average of 2.7 streams of revenue, and that the number of creators that rely on multiple streams has increased nearly 50% over the past five years.

On the other hand, if your current strategy is losing momentum and you’re finding it hard to generate audience engagement and revenue, it might be time to look for content and revenue streams that click. Used this way, diversification is more of a slow pivot than true expansion, but exploring new types of content, products and services can help you revitalize your community or find new audiences that are more receptive to your content, making long-term stability arises your business. Simply put, if your content isn’t resonating with your audience or you’re having a hard time monetizing it, it might be time to consider a new approach.

Related: A recession creates opportunities for creatives

When to wait

Despite the great potential diversification offers, sometimes it’s better to wait and focus all your energy on what you’ve got. If you’re new to the creator economy, still seeing growth and hitting your milestones, it might be best to focus on your existing content and channels rather than adding extra distractions. Diversifying can easily become overwhelming, especially if you are still on a learning curve.

Even veteran creators must recognize that diversification requires extra focus and effort. I’ve seen many cases where creators with Shiny Object Syndrome neglect successful and profitable business channels and lose both. If your current approach works wellstaying focused on growing existing channels and hiring a team to increase your capacity in those successful ventures may be better than dividing your attention.

I always recommend doing a quick ROI check to see if your efforts on this new opportunity are likely to yield a greater return than just leaning on your existing business and doubling down on what works.

It’s not a one-size-fits-all approach

If diversification is your move, the next logical question for many creators will be: how? And the truth is that there is no golden ticket. The right steps for diversification depend heavily on your unique audience and business.

One way to diversify is to expand your topics using your existing channels. For example, if you run an online yoga instruction school, your student community may also be interested in meditation and healthy eating. By expanding into related niches, you can diversify the topics within that niche to keep your audience engaged and attract new followers. This approach allows you to grow your brand while keeping your focus on the platforms that serve you best.

Another approach is diversify your sources of income to complement and cross-sell successful content. A physical product can generate revenue, while a course and community can be an engagement engine that keeps people coming back. The synergies create a virtuous cycle – topical conversations in a community can form the basis of a new mini-course or e-book; courses can be gateways to paywalled communities where everyone has a common baseline of interests and skills.

Creators can build robust and sustainable businesses by combining channels in unique ways. Take John Lee Dumas, host of the on Fire podcast, who gives his daily podcast, short courses and even regular coverage of his own entrepreneurial journey as part of its diversified offering.

Related: For savvy entrepreneurs, an economic downturn creates opportunity

A well-executed diversification strategy can turn your community into an engagement engine that builds customer loyalty while generating rich customer insights. The key is always to be strategic. If you’re considering diversification, map out a workflow for your content production, divide it across channels, and reassess the impact on your bandwidth before making additional changes.

Diversification can be a game changer for makers looking to build thriving, sustainable businesses, but there’s no one way to go about it or one right answer that fits every maker’s needs.

Random expansion, or feeling the need to be everywhere all the time, is not a successful strategy — it’s a recipe for burnout. But strategically identifying and addressing new content and revenue streams can help creators stay on top.

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