When you’ve got a best-selling product, developing a new one can seem almost like overkill. Why not spend that time focusing on the product that’s doing well? Marketing, revising, expanding into new markets – surely that’s a more valuable use of your time, right?
Wrong. While those things are all important, if you want to own a successful product-based business then you’ve got to start developing a new product as soon as possible – even if you’re still wrapping up your current product. Learn why with our list below.
1. The market is fickle.
What’s popular today might not be popular tomorrow. To see this truth in action, just look at the toy market, which is notorious for churning out tons of new products – many of which enjoy a huge surge of popularity that lasts a few months or a few years before fading away.
If you’ve got all your eggs in one basket, as the adage goes, this kind of volatility can destroy your company. Hence, you’ve got to have more than one product if you want your company to achieve any kind of stability.
2. No product stays relevant forever.
No matter how useful or beneficial your product might be, there will come a point when it becomes obsolete. That could be because of a slow, gradual change in customer lifestyle – not many people are using landline phones anymore, for example – or because of a new technological development. Just look at how standalone GPSs have been eclipsed by the smartphone map apps that we all have.
While one product is slouching toward obsolescence, you need to have another to take its place. This might mean pivoting directions and developing something entirely new, or developing an updated version of your old product (kind of the way clock radio makers started producing digital alarm clocks with iPod docks).
Your competition is always working to make a better version of your product.
There’s no safety net in the free market, so if a competitor creates a better version of your product then you’ll likely see your sales drop precipitously. What’s more, the longer your product has been on the market, the likelier it is that you’ll see copycats working hard to outdo you.
This is why you’ve got to follow up one product with another, ideally within a relatively short timespan. This will keep you ahead of the competition.
4. Customers get bored easily.
To build a successful business, you don’t need a bunch of customers who purchase from you once and are gone. You need a steady core of loyal customers who like your brand and want to purchase from you over and over.
How can you achieve this if you don’t have multiple products? Take the Kitchenaid standing mixer, a staple on every wedding registry in the U.S. The mixer is a great product – it lasts for decades, is extremely useful, and has a beautiful, display-worthy design.
But no one is going to buy two Kitchenaid mixers for themselves. Instead, if they love the mixer then they’ll want to buy Kitchenaid’s other products – a coffeemaker, measuring cups, saucepans, etc. This, combined of course with the company’s very high quality, is what has made Kitchenaid such a successful business.
5. Offering products with different price points can expand your target market.
One benefit of developing several new products is that it allows you to offer items at different price points. For example, if your flagship product is relatively expensive, you can open up your customer base by offering a “mini” or streamlined version at a lower price point.
Likewise, you could create a completely separate line of products that have varying price points. Then you not only give your initial customers more to purchase from you, but you stand to create entirely new circles of loyal buyers.
Creating new products over and over again can be challenging, but it’s key to running a successful product-based company. If you need help developing your next product idea, contact Pivot for a free consultation.