Product Managers Know That Too Much Of A Good Thing Is Bad

by drjim on August 1, 2011

Sometimes too many products is a bad thing…

Sometimes too many products is a bad thing…

What would it take to get your customers to buy more of your product? Maybe if you offered them more choices – you know, more colors, more sizes, more brands, more flavors, etc. If they liked the new versions that you offered them, then maybe you could offer them still more versions of your product. The big question is when is more too much? Product managers need to understand that sometimes our customers really just want us to offer them less…

The Problem With Too Much

Dr. Barry Berman has been researching how we get ourselves into these situations. On the surface, the idea seemed like a good idea to product managers. If you took the product that you already had, but which wasn’t just quite perfect for every customer, and you made a new version that was exactly the same except for a few tweaks, then you could sell even more products.

As with all apparently good ideas, this one seems to have gotten out of hand. In many cases what’s happened is that we’ve ended up with product lines that are stuffed with products that are boosting our costs, confusing our customers, overloading our supply chains, and may even be leading to shortages of the products that our customers actually want.

Clearly something needs to be done in order to slim down our product lines.

Whatever You Do, Don’t Ask Your Customers What They Want

When a product manager finds themselves in the position where they need to reduce the number of products that are going to be sold, they face a challenging decision. Which products should be cut?

Experience has shown that the one thing that you don’t want to do is to listen to your customers. Our customers form a deep attachment to our products no matter how unprofitable they may be. If you ask them if they’d be willing to settle for fewer choices, they will always tell you that this is not what they want. Don’t listen to them.

Instead, product managers need to let the data do the talking. Take a look at which of your products are delivering the most profit. Don’t get fooled by products that have a lot of revenue, but very little profit. Much of the data that you need can be obtained from sources such as customer loyalty programs or even point-of-sale systems.

Tiers Can Be A Product Manager’s Best Friend

Even armed with good sales information, making a decision about what products need to be dropped can still be a challenging decision to make. One way to simplify the decisions that you need to make would be to take your mess of products and group them into tiers based on how your customers use your products.

Often times you’re going to find that different tiers contain products that your customer purchases at different times in the year. Some may be purchased monthly and some may be purchased only once a year.

What you’ll probably find is that at least one of your tiers has a lot of products in it. However, those products may contribute very little to your company’s bottom line. When this happens, you’ve found the products that you can safely drop from your product line.

What All Of This Means For You

The idea that having more variations of your product will allow you to have more customers is a seductive thought that too many product managers fall prey to. The reality is that it’s all too easy to overwhelm your customer with too many decisions – not all product variations are created equal.

In order to undo the damage that creating too many variations of your product can do, product managers have to do some trimming of their product lines. To do this make sure that you don’t ask your customers for their input – it will be faulty and wrong. While you are doing the pruning, you can take your multiple versions and group them into tiers of similar products. By analyzing the performance of the tiers, you’ll quickly understand what product lines will have to go.

Killing off variations of your product is never an easy thing for a product manager to do. Customers and fellow employees are going to get upset with you. However, it’s the right thing to do and product managers who do it well will be the most successful.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: How many variations on a product do you think product managers should offer to their customers?

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What We’ll Be Talking About Next Time

You would think that simply by setting the price of your product and then telling the world about it would wrap up that part of being a Product Manager, right? Well guess what, in this era of the Internet everything having to do with product pricing has become more complicated. What you need is a new set of tools that will help you to lock-down your product’s pricing…

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