Most small to medium sized companies will look to add new products that they can produce easily or inexpensively, often modifying existing products. While this can quickly expand your portfolio, it doesn’t always address what the market wants – or will pay for.
A customer-centric product expansion should start with determining market needs, desires, and also discovering what customers are willing to pay for vs. what they expect to be included.
Step 1: Customer Advisory
Talk to existing and potential customers to determine their needs, priorities, budgets, and expectations.
Step 2: Product or Service Design
Includes addressing competitive offerings and feature sets. For services, this can often mean productizing them, to set standard deliverables, cost and timing.
Step 3: Focus Groups/Test Market
Beta testing of products or services with customers gains valuable knowledge not just in product configuration feedback, but also in related operational, support and logistics issues. All of these can impact the profitability and appeal of the product.
Step 4: Product Launch Plan
Whether you select a low-key trickle out, or the fanfare of a major product launch, you need to determine best vectors for introducing the product, and set achievable, measurable goals for these.
Step 5: Support Materials
Internal: Website updates, sales collateral, support guides, training programs & manuals….
External: Advertising; social media; business development campaigns, trade shows, guerilla marketing….
I’ve glossed over competitive research, primarily because you are likely to have decided to develop a new product/service because of competitive pressure or perceived market demand. There can be a big worry in playing catch-up though, rather than carving a distinct space. Imagine if Blackberry had leveraged their hold on the business market by adding scheduling for group resources & meeting rooms, or ERP integration rather than courting the consumer market with copy-cat apps. Customer Advisories might have told them this. Pay attention to what customers aren’t getting elsewhere – it can be more important than measuring up.