Small Business Ideas: Are You Selling a One-Trick Pony?
How many products or services should a small business offer? The number will greatly depend on the capacity and resources available. But, unfortunately, some small businesses and entrepreneurs have a single product or product line. Essentially, they're one-trick ponies.
They might do that product or service "trick" well, sometimes very well or too well. They're so good at it, in fact, that they could burn up all the potential sales within a single selling cycle. Many of these may be one-hit wonder sales. Then what happens? These folks may go into an extended sales slump or even be unable to recover and have to go out of business.
But the solution isn't always to expand the number or type of offerings since that can unduly strain the organization and its resources.
Let's look at an example...
Questions to Gain Greater Insight into Business Issues
Solving the One-Trick Product Puzzle
As many of my followers know, I have worked in the promotional products industry for several years. One of the perks of working in this arena is the opportunity to go to the trade shows and see all the new and exciting products. Every year, there are usually some new companies on the show floor, often showing just one new product in the booth.
At one show some time back, there was a very simple, innovative product that would be an excellent conversation starter at conferences and meetings. But that was the sum and total of what this company was offering. Sadly, I let them scan my badge and their incessant followup drove me crazy.
The problem with the product was that it was very conceptual. So it really would require a unique fit between the client and its intended purpose. It was also so innovative that to do the same product at future client events might garner an "oh, that again" response. So it had a very narrow band of opportunity making it a one-hit wonder sale for both the product manufacturer and me.
But this company is not unique. Many small businesses have the same problem due to limited capacity and resources.
So what can companies with only one or extremely limited product and service selections do?
- Add Sales Channels. Seeking out individual customers can be a massive cost, labor and time investment! So consider connecting with retailers, wholesalers, representatives or other distributors who can add a one-off product like this to their portfolio of offerings. With a potentially larger customer base, as well as expanded marketing and distribution capability, this strategy could make sales efforts more efficient. In the example here, the product manufacturer could hook up with a multi-line wholesaler/supplier or manufacturer's representative that works with many promotional product sellers like me.
- Find New Uses. For the example product, it appeared that it could have some retail potential in addition to promotional markets. Sometimes products or services are developed with one target market or application in mind. While that can be good in that it is tailored for the market, there better be enough sales and profit potential within that demographic to make it worthwhile. In evaluating a one-trick offering for other uses, additional costs for advertising, repackaging, etc. for a different market need to be considered. If the cost is too high to repurpose for some other use, it may not provide enough sales and profit potential, disqualifying new uses as a worthwhile endeavor. Click here to learn more about repurposing written content for new markets.
- Set Realistic Expectations. If the business really, REALLY wants to offer a one-trick product or service, then they need to set realistic sales goals and expectations for themselves. Demand may not expand! A careful analysis of costs, an achievable sales forecast and a profitable pricing structure are critical to making a go/no go decision for this business or offering. Click here for more discussion on pricing structures in marketing.
- Be Prepared for the End. The problem with offering only one product is that if the market demand collapses, so can the business, especially if new uses are not developed. All products go through life cycles and could become obsolete, cash cows (we hope!) or may have to change to stay relevant. The end is a good starting point when considering the future potential of a one-trick product or service. Click here to learn more about product life cycles.
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© 2014 Heidi Thorne