Now is a great time to improve your products!

Today’s economy gives five added incentives to tune up your product portfolio.

1) With business down, many firms aren’t working at capacity. So it is easier to free up people to examine your products for competitiveness and profitability and take steps to improve them.

2) Compared with other marketing expenses, product improvements can be relatively inexpensive to implement.

3) Many firms are reacting to the downturn by discounting their price, which hurts short-term profitability and degrades long-term value perceptions. Product improvements allow you to maintain or improve profitability and increase the perceived value of your offerings.

4) Product improvements create news, attracting attention without the need for expensive advertising. They also boost the effectiveness of any advertising you do.

5) Product improvements help keep current customers from bargain shopping among your competitors.

Five product improvement steps:

1) Talk to your customers! Find out what’s important to them.
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Brand Keys conducted an analysis of 1,847 products and services, in 75 categories, via their Customer Loyalty Engagement Index. On average, the study found that only 21 percent of all the products and services examined had any points of differentiation that were meaningful to the consumers. This is nearly 10 percent less than a benchmark study that was conducted in 2003!
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Two good questions are “What one thing about our product should we never change?” (Then probe for others) and “If you could change one thing about our product, what would it be?” (Then probe for others).

2) Chart your position versus competition, comparing target segments, features & benefits, cost, profit margin, distribution, marketing, service, and other relevant factors.

3) Clearly identify what you want your products to stand for. Then be sure you live up to your positioning. Lip service won’t cut it with customers. For example, don’t claim high quality unless you can provide it!

Once you stake out a position, review your marketing mix to be sure there’s no dissonance (for example, don’t position your product as high quality and then discount the price…)

4) Don’t keep improvements a secret. Tell people about it! Make sure they are trumpeted on your website, in your sales collateral, and in relevant industry and general publications. Remember, competitive advantages are short-lived, so you want to maximize the initial impact of product changes.

5) If the competitive advantage created by product improvements is short-lived, an ongoing differentiation process is necessary. Don’t wait for the next recession to follow this advice again. After completing step #4, schedule a return to step #1 and repeat!

I have developed and introduced 21 different products and product lines, and tested over 4,000 new products. If you feel you might benefit from outside help in tuning up your product portfolio, give me a call.