Revenue Growth: Should I Add a New Product or Push My Current Offering Harder?
Ah, the good ol’ days. Business was great for awhile, right? Products and services were selling like hot cakes, word of mouth was catching on, and you saw continued revenue growth from quarter to quarter. And then…what happened? It’s not that sales have tanked, per se, but that steady revenue growth you once enjoyed seems to have stalled. Now what do you do?
Plateaus in revenue growth are normal in every business. From time to time, there will come a point where the current market share has been saturated, and a change in strategy is needed to reboot growth potential.
The problem for many business owners is deciding what exactly to do. Should I expand my product offering? Or would I be better off marketing my current products and services in a new way? The answer could be either one—or even some of both—depending on your circumstances.
Let’s take a look at some different scenarios as you consider the best plan of action for your company. To start, here are a few reasons you might still have room to double down on your company’s current offering.
Revenue Growth: Focusing on Your Current Product Offering
1. There Are Marketing Strategies You Haven’t Tried
If you’ve only ever marketed your product a certain way, you may be missing out on key opportunities to expand your market share. Have you considered adjusting your pricing strategy through an all out price change or a special discount? Or partnering with another company to cross-market with a product that would pair well with yours?
Perhaps you know there’s more you can do to market your current offering, but you just don’t know which way to turn. Consider hiring a marketing consultant to help you refine your options. This is a great first strategy before expanding your product line. After all, if your current marketing strategy is limiting the revenue growth potential of your current offering, that will still be true with your expanded product line.
2. You Can Repurpose An Existing Product
Do you have a current product that could be repackaged for a different purpose or audience? Could you package a few of your fan favorite products as a gift set, for example? Packaging and remarketing are often a less costly investment than new product development, so there are certainly advantages to make use of what you already have in a new way.
3. Resources Are Tight
Developing a new product is tough. The process requires significant time and resources, and there’s always the chance that your new product won’t be as successful as your company’s current offerings. If your organization is currently experiencing particularly fierce financial insecurity, you may be better off concentrating on the bread and butter of your business before you invest in diversification. Wait until you really have the resources to put into making any new offerings truly great.
Revenue Growth: Adding a New Product or Service
Of course, you may survey your company’s current placement only to find that you’ve already exhausted your market share! Here are a few scenarios in which launching a new product immediately may be the way to go.
1. You Have a Loyal Fan Base Hungry For More
If you’ve already got a great, loyal group of customers who love your current product line-up, they’re likely ready to keep coming back for more. Highly loyal customers are great for business, but with a limited product line, there’s only so much they can buy.
Do your best customers already own every product in your line? If so, you’ll need something new to keep that momentum going—both to increase sales, and to keep your biggest fans talking to family and friends about your brand. Coming up with a great new product could spark instant and guaranteed revenue growth from this fiercely loyal group.
2. You’re in a Seasonal Market
From beach toys to snow suits, there’s a wide range of products and services that are just not effectively marketable year round. If your business tends to boom for three months of the year, but you can hear crickets in your office the rest of the time, consider expanding into a somewhat related market that can fill in the seasonal gap.
Meredith McWatters, owner of Head Above Water Swim School, found that diversification was the key to year round revenue growth for her seasonal business. By expanding her business to include tutoring services (aptly named Head of the Class), Meredith found a way to maintain profits and payroll over the cold winter months.
3. You Can Expand to a New Audience
In some cases, a new product provides a perfect opportunity for companies to dip into a new target market. For example, a small business that currently offers a highly popular skin care line for women could see dramatic revenue growth by creating a product line for men. Is there a way that changing your current product offering just slightly could make it relevant to a whole new audience? If so, you might have the perfect recipe for revving up sales figures.
Do any of these scenarios ring true for your company? Remember, there’s no one right answer to revenue growth. It may be that what your company needs is a little bit of both. Do your research to determine how your company is faring against the competition, then trust your gut as you decide on the best strategy to move forward.
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