Adding more products to your inventory is a great way to grow your business. The risks are, comparatively, smaller than opening new locations, or entering foreign markets, and you can use your existing infrastructure to store and distribute your new products. If they’re well chosen and well designed, they don’t just offer an opportunity for existing customers to spend more money with you (and, of course, less with your competitors) but also give you a way to tempt new customers to shop with your brand for the first time. As well as that, launching a new product gives you a great foundation for a renewed marketing campaign, putting your brand in front of new customers, and growing your recognition and mind share, even if they don’t end up directly purchasing your new product.
There are of course risks associated with any action you can take in the business world. If your new product doesn’t find the appreciative audience you predicted, you lose out on the resources you invested in developing and creating or acquiring it, as well as the associated marketing budget. As well as that, you’ve also just demonstrated to your audience that you don’t really understand what they need. This can damage your brand: whatever other qualities are invested in your brand, understanding your customers is a fundamental one.
Tailoring to Your Market
The most important thing you can do to avoid the risks associated with expanding your product line is to, from the beginning of the process, use data and insight to tailor your decision making to your market.
Working with a market research firm can get you the data you need to feed into your new product development process. It’s more than finding out whether there’s any demand for the product you’re designing – though that is very important. A good market research programme will continue right through from the beginning of your process, helping you test the concepts you’re considering developing into products to see which of them resonate with both existing customers and the wider market, and then prototypes as your development cycle continues. These could be physical prototypes, mock-ups of the UI for an app or programme, or simply the collection of features you want to offer in a bank account or consulting package.
Your aim to ensure your product is obviously valuable and useful to the customers you’re going to be launching it to. If they can’t recognise why this product would be an asset to them, you make it harder to persuade them to part with money for it.
Feeding data from ongoing market research into an iterative design process means you create products that emphasise the qualities customers most value, helping you produce a final result that is easy to market and sell and gives you a better chance at recouping your investment and making a profit.
