So now is the first step in looking at business strategy, your product line strategy. What is your product line strategy or business line strategy? How are you going to expand your product line over time? Now this doesn't matter whether you're just starting out, whether you're about to start, or you've been going for a little while. Even at the very beginning as you're planning your business, you say you only have one product or one service. It doesn't matter. You have to think of expansion in the future and start it from the beginning, and I'll explain why right now.
There's an old adage in business; grow or die. I heard that for the first time from my accountant many, many years ago, 25 or so years ago. It really is true. But, let's take a look at how you might grow. If you're going to grow, most likely you're going to have to either expand your products and that could be to related products, or it could be variations of versions of the current product you have.
Now why do I say related products? A lot of products are complimentary in that you buy one, and you will probably have a large percentage of people who buy another. It reminds me of two different scenarios. One was when we studied early about complimentary products if you ever noticed in the ads in supermarket magazines, you'll see things like a sale on bacon or there might be a sale on eggs. Why is there a sale on one and not the other? Because the one draws you in but then you will buy the other more than likely. The same thing with peanut butter and jelly.
A lot of different things go together, i.e. complementary. I saw a commercial oh probably about 10 years ago that really made a point that I had been trying to make so many times and had made, but it was a lengthy thing. Now I could just point to the commercial. You might remember it but if not, I'll replay the idea.
There was a guy who worked in the store. This is a supermarket. He's over in the vegetable area, and he picks up a bag of those little bitty carrots and he says loudly, “Why are we selling these carrots?” Now all of a sudden a voice from overhead comes loudly and says, “Because the same people who buy those carrots are the ones who buy those expensive cheeses that we have in the cheese section.”
Now another story was I went to a supermarket and they had … it was a relatively small supermarket, but it was the one that was close … nearby to us. They stopped selling whole milk. Now I went up to them and said, “What are you doing this for? How come you seem to have run out?” They said, “No, no we don't sell that anymore. There's not enough people buying it.” I had to teach them a little bit of economics. You guessed it. I said, “Well, the problem is if you don't have whole milk and I want it, it is considered a staple, not just in my house but in many other homes. Even those few people who want to buy whole milk, if you don't have it, we have to go to another store. Now, are we going to come here and then go to another store just for milk or are we just going to go there and buy everything?” Needless to say, within two weeks they had reengaged and had started selling whole milk again.
Now this is just a quick lesson in how products are related. Now let's get back to your business. As I said, you have to plan ahead of time right at the beginning to sell more products and services to your existing customers but also to perform market segmentation analysis to understand what your customers want and how you might sell variations of products or other related products to them. Start by focusing on the products that you're about to sell or the product that you're about to sell or service or are doing right now and understand much more about your customer and that will not only decrease the marketing efforts but it will open doors to give you an idea of what other products might be related or relatable.
Now how do you do this? Well of course you target your new customer market or markets. You try to sell and consider complementary products that either other people are selling or services. Even if you have a product it may be the service that's complimentary such as customer service. Go out and get customer feedback as an integral part of both the development process but after you put the process and the product out there because it's how the customer buys, what they buy and how they're using it.
Interesting thing, sometimes products are used very differently than we anticipate them to be used. You may develop a new market segment. You may find that the market segment that you're in is actually slightly different or slightly broader than you thought it was. When you describe the targeted audience for your product and you narrow the focus on the product by identifying exactly how you're going to market it, don't say anything or do anything that might turn people off around it.
If you're selling something to 50-year-olds, don't say well, this is not intended for 25-year-olds. You may find out that the 25-year-olds desire it as well but they have to open up and listen to it and if you're telling them not to listen, that's not a good help. Fit your strategy and then plan a critical path for the future over time. How you're going to take your current or planned product and company into next stages after a certain amount of adaptation by existing customers, acceptance by existing customers and possibly even some redesign, reconfiguration or adjustment in your current product.
Now when should you do all this? Right from scratch. That's right. If you're not open yet, you've not started your business yet; you should be doing it right now. You innovate from the beginning. Later on you're going to be real busy and right now you've got to be able to plan very strongly for what you're going to do. If you plan it from the beginning, even before you start. If you've already started, that's okay you can't go back to the beginning but you still do it. You'll have a much easier time. Why? Because you won't step on your potential customers on some complimentary or supplementary products that you might introduce in the near future.
Now the process. Watch your competition and potential competition. Generate ideas from not only new and modified products that you have but also looking at products that are near or neighboring yours. Solicit feedback constantly. Now, It does not mean that feedback is necessarily good. I've watched over and over again where people follow the feedback precisely of existing customers and they find out that they screw up.
Why? Let me give you an example in the training arena that Microsoft had. Microsoft with its training companies that were out there, they were independent companies, they would go and toss between having five-day courses and a mixture of three and two-day courses. Well the three and two-day courses certainly add up to five and five-day fill up the whole week but what happens is some companies out there had trouble selling the high ticket item for a five-day course. They constantly scream when there are mostly five-day courses out there. Squeaky wheel, that's the one that gets the grease.
So Microsoft would change to three and two-day courses. Of course what happens there is the companies that could sell five-day courses found out that they had underutilization of the classrooms. Why? Because you don't get a precise matching of three-day and two-day courses. What happened is they would start screaming and then they would go back to a five-day and I was watching Microsoft over several years switching back and forth like this and each time they would say, “Well that's what our training companies are saying.” Well of course they are because the ones that have a complaint complain, but the ones that are happy are not complaining.
Be careful of the feedback. Do listen to the customers. Be sure that you can thoroughly explain and it may mean that you might have to help some of them why your course or product is done the way it is, and how to configure it or whatever your product is. What really is the need and the use to the customer, so that they can use it properly. As you go on, remember now what you're doing is you're looking out into the future and you're thinking all those things that you might do in the future.
Also, protect your ideas. Don't just give them out to everybody that you see on the street or something like this or your next competitor may be the one that you just gave the idea to.
I realize this is a lot of stuff in this 10 minute episode but I want you to realize and understand how important it is to really have a good strategy of your product and product line. Now as I said last week, each week we're going to do another episode of these eight in order to get you a complete set of ideas and thoughts on running and growing and starting your business. Remember, there are over 40 million people who already have side gigs. Those are businesses. Do you want yours to expand into a complete business that may be take you full time? Or those that have started them already and independent, you want to expand them and grow them?
I hope some of this helps. Remember to always watch out and think about your product line strategy. If there's any ideas, thoughts or questions you have, please send them my way. Thomas@lifeunsettled.com. Always glad to hear, always answer. You can ask anybody who has sent me a question. I always answer every single question or get back to you with what I can. Thank you very much. Good luck. See me on lifeunsettled.com