If you’re running a business as a founder or CEO, there may be pressure on you to expand your business: opening branches, hiring new staff, breaking into new markets. Another option is to expand the line of products you offer. Sometimes it can be difficult to see the attraction: expanding into a new market can deliver many new customers and an attendant boost in revenue. The gain from adding a new product to your roster can be, comparatively, more modest, but there are persuasive reasons to do it.
Attracting New Customers
A well-chosen new product can bring new customers into your existing business – boosting your revenue without the risk of establishing entirely new branches in unfamiliar areas and encouraging your existing customers to spend more with you.
The key to success is your new product development process. Done well, it’s an opportunity to take stock of your business at its core, how it attracts customers, and the reasons people may not choose your products. This process needs research, and you’ll need to partner with a professional research company to get it. You can survey your existing customers yourself, but the results will only allow you to become hyper-specialized in meeting their needs, not developing a wider view of your market.
It’s important to iterate on your designs. Produce a prototype, do another round of research and testing to see how it plays in your market, and apply those learnings to your designs until you have something optimized for success.
You’re looking to produce something that doesn’t just offer value to your customers but that they can see its value. If they can’t grasp your concept, it doesn’t matter how much you put into it, and it’s not going to find an audience.
Another big advantage to launching a new product is that it’s well managed, less risk attached than other, more dramatic kinds of expansion. You get the advantages: increased revenue flow and new customers without having to commit – and potentially lose – all the resources you’d pour into opening a new branch that is by no means guaranteed to turn a profit.