Attract New Business by Building Out Your Product Line
Free Book Preview Ultimate Guide to Facebook Advertising
In The Marketing Plan Handbook, author Robert W. Bly explains how you can develop big-picture marketing plans for pennies on the dollar with his 12-step marketing plan. In this edited excerpt, Bly offers smart advice on why and how you should build out your product line.
To be in business, you have to have a product or service to sell. But to succeed in business, you have to have multiple products and services to sell. If you only have one product or service, your business is almost certainly not a viable business, but more like a hobby or avocation: You may make sales and get paid, but you will never grow very large or become very profitable, much less make a living off selling that one product or service. Are there exceptions to this rule? Of course.
Why do you need additional products and services to sell to people who have bought one product from you? The answer is, lifetime customer value (LCV). LCV is the amount of money a customer spends with you over the period for which they remain an active customer. For instance, say you have a grocery store. The average customer spends $100 a week, or $5,000 a year, shopping at your store. If the average customer stays with you five years before moving away or switching to another grocery store (because it’s closer, has a better selection, offers lower prices, or because they've grown unhappy with your store), that customer has an LCV of $25,000. Your goal is to offer enough products and services that you increase the LCV of all your customers.
When designing products for your line, keep in mind that a product isn't just a physical object made of such-and-such material, weighing so many pounds, and having particular dimensions and colors. A product is much more than that. Marketing writers are fond of noting that consumers don’t buy products—they buy the benefits the product offers.
Books are a good example. If you think of a book as a physical product, it's essentially paper and ink. And the value of the paper and ink that went into manufacturing this book is much less than the price you paid for it. But you're not paying for paper and ink, or the words on a page, or even the information and ideas. You're paying for the value of that information and those ideas, which is their ability to help you improve your business and make you more money. How-to writer Jerry Buchanan once said, “When you sell a man a how-to book, you are not selling him paper and ink; you are selling him a whole new life.” So in planning a new product, you not only have to determine what features to build into it but also have to determine how these features can deliver the benefits your buyers want.
Other aspects of a physical product you must consider in the design stage include models available, sizes, colors, options, accessories, weight, dimensions, and packaging. Virtually all products are defined not just by their physical features, but also by the company and service behind them. What kind of warranty or guarantee will you offer? What kind of service and support comes with the product? Does the seller or the consumer pay for shipping and handling?
One technique for planning new products that's been successful in the past but is mostly overlooked today is this: Write the strongest ad or sales letter you can for the product you want to introduce before you actually design and build that product.
To make sure you cover all the important points in your ad or letter when describing the new product you want to market, create a worksheet that spells out the important facts about the new product: packaging, benefits, features, perceived value, colors, special features, options, pricing, warranties, method and speed of delivery, service and support.
For each product fact in your ad or letter, be sure to rate it in terms of consumer appeal and whether it's a strong selling feature or not. For instance, if the variety of colors in which you're producing the product is a real plus to buyers, rate it a 4 or 5.
Any product fact or description in your ad or letter copy rating a 3, 4, or 5 should strongly be considered for inclusion in the actual product. Any item rated 1 or 2 probably isn’t worth developing and can safely be omitted. Then test the ad or letter. You can show it to potential buyers and get their reaction, then you can test and produce the product only if there's interest from customers.