Tips To Increase Sales by Dumbing Down Your Products
In graduate school, I worked on a strategic direction project for a bar code scanner hardware and software manufacturer.
The company was looking for new ways in which to boost sales.
At that time, they had already captured a decent share of their identified large business market (Fortune 1000 companies) but projected growth was flat.
However, the company realized that a larger potential markets existed with small to medium companies but were having trouble getting traction there.
My team started with a simple marketing survey of this new, targeted SMB market to get a better feel of their needs and their perception of bar code scanning systems.
We quickly found that the common reasons that these smaller businesses were not buying these scanning systems was that they were perceived as too complicated and costly - thus, no sale.
Small businesses typically have simple inventory, operating and shipping procedures - usually developed as the business grows.
And, that the majority of these bar code scanning systems (our project included) just had too many functions; features that these companies would never use but would have to pay for.
In fact, these business owners felt that: 1) It would take way too much time (time they did not have) to learn, understand and implement a new fancy system, 2) That these (and our project's products included) had way too many bells and whistles for their simple operations, 3) And, that the expense did not justify buying a system that the buyer might only use 3% or 4% of the features (most bar code companies would push their higher end, feature loaded products as these offered the selling company the best mark ups).
Thus, our solution for this company was quite simple - and that was to make their product simpler or de-engineer the product to its most basic features (features that small companies needed and would use) and at lower price points.
Our project company could then offer add-ons for those small firms that wanted a bit more or that could be purchased as these customers grew their own businesses.
Financially, this also made sense as our project company might earn less revenue per customer at the lower price point but could really clean up with volume (as this was a much larger market - some 100 times as large) - not to mention future sales for add-ons and up-grades.
They did not take our advice and sold the company less than a year later.
The key lesson here was that it takes more than just pushing a fatter and more expensive product on your customers to grow your sales.
Your company also has to use its marketing to pull information from both current and potential customers and then that information to design products and service around.
The bottom line is that it is OK to compete by developing and adding new features to your offerings - but, make sure that you are not doing so only to compete against your rivals but are doing it because that is what your targeted market wants.
If not, it is OK for your small business to dumb down your products and services and give your customers what they want and need.
What is the worse that can happen, your sales actually increase?
The company was looking for new ways in which to boost sales.
At that time, they had already captured a decent share of their identified large business market (Fortune 1000 companies) but projected growth was flat.
However, the company realized that a larger potential markets existed with small to medium companies but were having trouble getting traction there.
My team started with a simple marketing survey of this new, targeted SMB market to get a better feel of their needs and their perception of bar code scanning systems.
We quickly found that the common reasons that these smaller businesses were not buying these scanning systems was that they were perceived as too complicated and costly - thus, no sale.
Small businesses typically have simple inventory, operating and shipping procedures - usually developed as the business grows.
And, that the majority of these bar code scanning systems (our project included) just had too many functions; features that these companies would never use but would have to pay for.
In fact, these business owners felt that: 1) It would take way too much time (time they did not have) to learn, understand and implement a new fancy system, 2) That these (and our project's products included) had way too many bells and whistles for their simple operations, 3) And, that the expense did not justify buying a system that the buyer might only use 3% or 4% of the features (most bar code companies would push their higher end, feature loaded products as these offered the selling company the best mark ups).
Thus, our solution for this company was quite simple - and that was to make their product simpler or de-engineer the product to its most basic features (features that small companies needed and would use) and at lower price points.
Our project company could then offer add-ons for those small firms that wanted a bit more or that could be purchased as these customers grew their own businesses.
Financially, this also made sense as our project company might earn less revenue per customer at the lower price point but could really clean up with volume (as this was a much larger market - some 100 times as large) - not to mention future sales for add-ons and up-grades.
They did not take our advice and sold the company less than a year later.
The key lesson here was that it takes more than just pushing a fatter and more expensive product on your customers to grow your sales.
Your company also has to use its marketing to pull information from both current and potential customers and then that information to design products and service around.
The bottom line is that it is OK to compete by developing and adding new features to your offerings - but, make sure that you are not doing so only to compete against your rivals but are doing it because that is what your targeted market wants.
If not, it is OK for your small business to dumb down your products and services and give your customers what they want and need.
What is the worse that can happen, your sales actually increase?