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3 Tips to Declutter Your Product Offerings Let simplicity reign. Very complicated products can confuse customers and kill sales.

By Tom Alexander Edited by Frances Dodds

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.


The more bells and whistles your product has, the better, right? Not necessarily. A Berkshire Hathaway-owned company recently faced the consequences of an overly complicated product, in what turned out to be a worst-case scenario: legal action.

Related: The Importance of Staying True to Your Roots as an Entrepreneur

Applied Underwriters, a workers compensation insurance carrier and payroll company, had crafted a complex form of workers comp coverage it called a "profit-sharing" element.

Essentially, if a client company experienced few or no losses, it would reap savings. Conversely, if that same company saw heavy losses, its costs would soar, to a price ceiling.

The trouble was, all the ins and outs in the company's policy were buried under dense legal jargon: Terms like "cession point," "loss development" and "run-off term" befuddled clients, confusing them as to what they were getting into. The eventual result: multiple lawsuits against the company.

The lesson here is that while businesses may see feature-heavy products as comprehensive, in fact overly complex products only confuse customers. The core value of a product gets diluted in the flood of flashy extras. A straightforward product, on the other hand, allows businesses to better connect with customers, making it easier for them to sell the product (as well as upsell and cross-sell it).

Let simplicity reign.

Having too many frills and features doesn't mean your product will face legal action, but making your product complex certainly doesn't do your customers any favors. Keep these three tips in mind to ensure your product is as streamlined as it should be:

1. Business, know thyself. In order to simplify (and improve) your products, first identify who you are as a company. A lot of this is getting back to basics. Ask yourself and your team the simple question: "What are we good at?" Your firm's identity gives roots to each product offering and allows products to grow from a focused, recognizable origin.

For instance, my background is in sales, so when I started PK4 Media, I looked to make a single core platform that could encourage sales in multiple areas. Because clients could manage an entire omnichannel marketing strategy through one platform, they could focus on their strategy and goals -- without worrying about the tools they use to achieve those goals.

Paradoxically, having a specific niche can allow you to reach a broader audience. Take Novo Nordisk, or AARP, or Motel 6. Each is an established leader in a narrow band of its market. Novo Nordisk focuses specifically on diabetes medications, AARP targets a distinct age group and Motel 6 homes in on the thrifty tourist.

Each started out understanding its own identity and isolating a certain area of expertise to build on. By taking this focused approach, the companies attracted higher shares of consumers in their market segments. In time, their dominance discouraged competitors from entering those segments.

Related: 8 Strategies for Expanding a Niche Product Into New Markets

2. Don't cut yourself off. Some businesses will take the above advice and run with it, aiming for an as-niche-as-possible product. But if you do offer a hyperspecific product, you're pigeon-holing yourself, since consumers will believe they can use your product only in a single setting.

This step follows through on step one: Now that you've asked yourself what, specifically, your company or product is good at, it's time to determine all the pain points that that expertise can solve. Who else could use your company's skills or product's features to solve their problems?

Infor, a U.S.-based software firm, learned this lesson well. It identified thousands of micro-verticals where its products had an edge. These verticals were as different as nursing and beer brewing. Infor then tagged certain functionality building blocks it could adapt, to apply to organic product shelf-life management in one industry or hospital nurse scheduling in another.

What occurred is that Infor could now sell its product, with only slight customization, to a wide variety of companies across industries. That was because the company simplified its tool down to its functional essence: strategy-based internal software.

Businesses everywhere, in any industry, should do the same. A niche should be your foundation, not your ceiling.

3. Think simple, not small. Simplicity does not mean small thinking. You don't have to limit your company to one or just a few products, nor do you have to resist the entrepreneurial urge to innovate and re-innovate. As long as you keep your focus on making products and processes simple for the customer, you have the freedom to invent new offerings or reinvent old ones.

My company did this when we reworked our pricing model for clients' brand studies, to better guarantee performance results. We had noticed that our clients' brand studies were showing much higher-than-normal results (sometimes creating budgetary risks for clients). To make the process more straightforward, we ran the same studies but adjusted the pricing model to reflect a more-encompassing metric, "cost per brand perception lift," rather than the more vague cost per mile.

This idea of using the same platform or infrastructure to offer new products is what Volkswagen did when it revived its iconic car, the Beetle. When that car flew back on to the market, the model had infrastructure from much newer VW and Audi product lines, but the styling was all Beetle. By using interchangeable drivetrains and unique interior details, VW made conformity look exciting.

Related: Create a Product Customers Will Want

"Simple," then, does not mean crude. Simplifying your product means distilling it to its core purpose and making it easy for customers to understand and use. When your product is the simplest solution to consumers' problem, their purchase decisions become simple to make. And that's exactly what you want: simple.

Tom Alexander

Founder and CEO, PK4 Media.

Tom Alexander is founder and CEO of PK4 Media, a true omnichannel media company located in El Segundo, Calif. With more than 13 years of experience in digital advertising, Alexander has a keen understanding of the industry and the voids in the marketplace. As a result, in PK4 Media’s platform, XPS, he has developed a single system that controls delivery and optimization -- providing advertisers an effective and efficient way to achieve results.

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