It seems almost like an impossible challenge: find ways to constantly make your product(s) both more popular (more sales) and more profitable (better prices). When confronted with this challenge, it’s all too easy for product managers to shrug, throw up their hands, and then focus instead on rolling out the next product or version of an existing product. However, if you are going to survive, then this is a problem that you are going to have to find a way to solve.
It’s All About Diversifying
It turns out that the key to survival is to broaden your product’s appeal to new markets while increasing your profitability among existing customers. Now these are fine words, but exactly how to do them is the challenge that product managers face.
Knowing who your current customers are is the right place to start. Once you have a list of who has bought your product in the past, you can start to do some segmentation. More often than not most of your existing customers will have something in common: company size, customers that they are going after, type of products that they sell, etc. Once you know what these characteristics are you can start to identify potential customers who occupy segments that are similar but different.
Three Ways To Diversify And Boost Profitability
In order for a product manager’s product to be a success, it needs to generate a profit when it gets sold and it needs to get sold as much as possible. Here are three thoughts on how to make both of these things happen.
- Cut back on extra services that aren’t boosting the bottom line: this can be a painful and difficult thing for product managers to do. Over time we keep adding additional services to our products in order to keep them competitive. Over time we lose sight of whether these services are why our customer is buying our product. Often they no longer influence the buying decision and yet they are still costing us money to provide them. It’s time to drop them now.
- Favor Groups Over Individuals: when you start to focus on your product’s bottom line, you quickly realize that it’s always better to have more customers than fewer customers. This will serve to insulate you when market downturns occur. To make this happen, sell a single product or service to a group of people for a lower price instead of one higher priced product / service to just a single customer. This may require some product redesign, but it will be worth it in the long run.
- Maximize Free Advertising: If you are going to increase your customer base, then the word is going to have to get out about your product. In this era of the social network, one sales fact remains true – people believe what their friends tell them. The group approach enhances word-of-mouth advertising. The more satisfied customers you have, the more free advertising you’ll get.
Increasing the number of customers that your product has while at the same time boosting your product’s profitability is possible to do. The trick is to diversify your customer base while trimming costs at the same time. I’m not saying that this is easy to do, but if you can find a way to do it for your product, then you will have found out how great product managers make their product(s) fantastically successful.
Questions For You
Does your product get sold to one basic type of customer? Are you taking any steps to diversity your customer base? Have you looked at the services that you are including with your product? Can any of them be dripped without hurting sales? Leave me a comment and let me know what you are thinking.
P.S.: Free subscriptions to The Accidental Product Manager newsletter are now available. Subscribe now because it’s your product & it’s your career.Ã‚Â Click Here!
What We’ll Be Talking About Next Time
Economic downturns don’t last forever, but boy-oh-boy do they hurt while they are happening! I’m not sure about your products, but my the customer that I’ve been consulting with are all scrambling to find ways to make their products easier for their customers to buy. Would you be interested in some tips on how to go about doing this?