Ancillary revenue can have a real impact on a company's bottom line. The extra income generated from additional fees, products, or services, such as a national vending program adds up. The question then becomes a matter of what to do with the extra revenue. Here are four ways your company can manage its ancillary revenue.
4 Ways Your Company Can Use Ancillary Revenue
1. Capital Expenditure
Regardless of industry, there are always certain assets needed to provide the products or services offered. Extra income can help pay for those expenses. Here are some examples of what that could be by industry:
Hospitality
Managing a hotel group means purchasing lots of furniture. Revenue made from ancillary services can help pay for new beds, chairs, tv's, and more.
Retail
Shelves, fixtures, and cash registers are common capital expenses for retail chains. Use your extra income to pay for (or offset) those costs.
Manufacturing
Ancillary income is a great way to help pay for the maintenance of machinery and other equipment used to manufacture goods.
Vehicles, building maintenance, and office equipment are other costs that companies need to budget for. Ancillary revenue can help pay for those expenses.
2. Invest in Your Employees
For too long companies have focused on the customer experience at the expense of their own employees. Many organizations recognize this and are now tending to the needs of their most valuable assets--employees.
How workers experience their workplace has become a priority for many executive teams. But doing so comes with a cost. Ancillary income can be used for the following expenses to help educate and energize your workforce:
- Training
- Retreats
- Bonuses
3. Donate to Charity
Although donating to charity should, first and foremost, be about helping the community, there are still benefits that corporate donations bring to your business. For example:
- Improves employee morale
- Increase in marketing
- Donations are tax deductible
As millennials are seen as the main driver for social responsibility, it's easy to see why they're also more likely to buy from organizations with a charitable history.
4. Customer Appreciation
If your company doesn't have a customer appreciation strategy, then it's time to start thinking about one. Why? Because customers who feel genuinely appreciated by an organization become loyal, and loyalty breeds brand ambassadors.
With the ancillary revenue you generate through a vending management program, you can create ways to show your customers just how much you value their business. Here are some examples:
- Thank you cards
- Coupons
- Upgrades
- Small gifts
The list of ideas is practically endless. Showing your customers just how much you value them can go a long way in retaining them and reaching new ones.
