How do I diversify my product or service line without diluting my brand?
The first thing you need to look at is why do you want to diversify and second does your avatar want the new products?
Then with this in mind having a chat to a business strategist is the next step.
I have 4 different products and services that reach different markets and have been very successful in doing this and it is totally doable provided you are willing to do what is needed to get them over the humps along the way.
In extension to the statements above, it is very important that the business owner/strategist has a process to measure the success or failure that is accomplished.
A gut feeling is simply not good enough.
Most accounting software has basic methods to assist.
Quickbooks has a Class / Location
Xero has tracking categories
Myob has locations/jobs
Using a client's example:
A beautician has three clinics with 20 packages of services and skincare products
Using Quickbooks as an example she creates three store locations
Ipswich
Moorooka
Chermside
Then the 20 packages are tracked using "class"
She also mapped all her product sales against the appropriate clinic locations.
After three months the beauty salon owner discovered some surprising insights:
Ipswich sold mostly massage/waxing packages and in skincare, acne packages were the most popular
Moorooka did not break even in services or products, it was hemorrhaging losses.
Chermside clients loved the higher end packages and skincare products.
With this information, the beautician closed the Moorooka clinic, as the lease was due to be renewed.
A new product line of aromatherapy essential oils and massage goods were introduced to Ipswich.
The money she saved in rent by closing Moorooka went into more modern laser machinery and expanded the store in Chermside.
Knowledge is power.
Research, customer feedback, advertising/marketing, website SEO, blogging all work together well as long as you have processes in place to document their success or failure.
Interesting insight @Amanda Hoffmann - Certified Bookkeeper, BAS Agent . Most companies rely on marketing for this kind of insight so it's interesting to hear that Quickbooks can also offer this too. Knowledge is definitely power!
What do you think of this approach @Jef Lippiatt @Phil Sealy ?
I definitely think working from real data is helpful. That can definitely give you insight into locations that are over or under performing. It may even give you insight into products or services that are selling well.
However, this approach does have limitations when used as the only factor. Because it won’t be able to tell you what products or services the customers in that area do want. If you just close the location, you may irritate other customers that really did like that location. Perhaps that location didn’t look to serve the customers specific to that region.
This is why it is important to stay close to the customers and their wants and needs. If you don’t understand your customer it is hard to properly serve them.
Consider using polls and surveys to send to existing customer to ask them what they feel is missing or would like improved. Consider reaching out to the customers that spend the most money their to understand what drives them to that specific location. There are always many factors to consider when thinking about diversifying your products and services, or even your entire business.
I think @Phil Sealy definitely made some great points.
Many who know me, know I enjoy using examples. One of the best products that comes to mind for this question is digital cameras.
Product 1 - a digital camera priced for the average consumer (low cost, low profit, volume)
Product 2 - a digital camera for hobbyists with more features (mid cost, bigger profit, sell less)
Product 3 - a digital camera for pros more features better materials (high cost, big profit, sell fewer)
Product 4 - a tiny camera for athletes / drone photography (mid cost, big profit, sell fewer)
These cameras all have a purpose but different distinct customer bases. Some customers may fit into more than one category (potential for possible upsell or secondary purchase).
Another great lens (pardon the pun) would be related products, potentially a portable printer, interchangeable lenses, custom filters, lighting, mounts (selfie sticks, tripods, etc.).
The main takeaway is finding perspective and leveraging the gaps between the customer segments and the overlap as well.
Great example @Jef Lippiatt . This really puts it in to perspective! Do you think that the 'related products' is often something that business owners overlook?
Hey @Hatty Bell I do think many businesses forget, ignore, or outright dismiss related products. Many times the leadership is unwilling to listen to people in lower positions (that ironically may be much closer to the customer). They do so at their own detriment.
One of the other reasons to pursue related products is because by creating more offerings you are getting to the math where your 1 product and 1 related service now match 1+1=3. The reason is because if they already trust your brand, you are more likely to sell them additional items. Selling them additional items makes the cost of switching to a different brand higher (think Razors and Razor blades - the money is in the blades, or printers and ink cartridges - the money is in the ink).
The other issue is that many businesses or business owners are unwilling to fully explore and understand who they are really competing against. There are several that most companies forget.
1. Fighting against their direct competitors
2. Keeping indirect competitors at bay
3. Competing against their own products and services (to innovate)
4. Trying to time to the market (either when to enter or when to get out)
Hello again
Hi @Mohamed m123 Mohamedm123 ! Do you have any experience with diversifying your product or service line? Would love to hear your thoughts
Hatty Bell, Executive Assistant at Country Road Group
Great insight @Phil Sealy - what would you say are the main 'humps' to look out for? Was this helpful @Ananda Raj Pandey ?