Product Managers all over the place are asking the same question: what should I be doing to boost my product sales during this extend economic downturn? If you read the papers and the trade magazines, there are no shortage of “experts” who are more than willing to offer their suggestions. I prefer to listen to product mangers who are actually taking action and seeing real results.
A Delicious Product & A Sticky Problem
Anjali Cordeiro over at the Dow Jones Newswires has been out looking for folks who are finding ways to adjust their product to fit the new economic reality. Cordeiro found Gary Gottenbusch who is not only the product manager, but also the owner of the Servatil Pastry Shop & Deli in Cincinnati.
What could a pastry shop have to teach an important product manager like you? Well, in early 2008 Gottenbusch started to see his customers beginning to buy smaller items in an effort to conserve money and at the same time his cost of materials was starting to go through the roof. Does this sound familiar?
Baking Up A New Business Plan
Gottenbusch was smart enough to realize that if he took a defensive approach and shrunk his product lines in an effort to just make it through the economic downturn, then there was a good chance he’d go out of business if it lasted too long. Instead, he seized the opportunity and reinvented his product lines and how he sold them.
Gottenbush did four things that every product manager should be doing right now:
- He went looking for new customers in new locations.
- He created new and unique products that would drive more traffic to his business.
- He did creative things to keep his costs under control.
- He took advantage of these unique times to expand his business.
Was it worth it? Well his sales are up by 15% and he’s now moving $8.5M worth of pastries per year. Let’s look at exactly what he did…
Ingredients Of A Success Story
Realizing that volume is the key to keeping a product line successful during tough times, Gottenbusch went looking for new customers. He found them in hospitals where both patients and theirÃ‚Â friends and familys are looking for something better than what you can get out of a vending machine.
Gottenbusch created a unique pretzel stick that he patented. He heavily promoted this product and used it to drive new customers to his store. The product sold well and had the added benefit that people who bought it often also bought his other products.
Keeping costs under control was a bit tougher. Gottenbusch joined forces with other bakers and they started buying supplies in bulk. This allowed them to get better prices than if they were buying individually. Prices kept going up, but they were much more manageable with the power of group buying.
Finally, since the economy is in the dumps, Gottenbusch used this as an opportunity to buy store space in a high-end mall that he normally couldn’t have afforded to get into and is now selling his products there.
What Success Tastes Like
What should product managers learn from all of this? Simple – even in these tough times, it is still possible for your product to be a success. However, you can’t be standing still. You need to be taking innovative action and this just might include changing your business model.
This is the time to be trying new things. You need to make sure that your customers seeÃ‚Â your product offerings as being unique and offering special value to them. If you get creative now, then when this recession is over you and your products will be well positioned to take advantage of the rebound.
Questions For You
Are your products hurting because of the recession? What steps are you taking to boost sales? Have you thought about creating unique product offerings in order to generate more sales? Are you looking in new places for new customers? Leave me a comment and let me know what you are thinking.
Coming Up Next Time
Wouldn’t it be nice if we knew how to keep our minds on something long enough to make progress on our products? Well good news, Winifred Gallagher has written a book called Rapt: Attention and the Focused Life in which she investigates our mind’s capacity to pay attention.
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