Recently, I sat down with CWS, Inc CEO and owner, Alan De Keyrel, to get his take on products and services.
What products and services you offer is one of the most important decision a business makes. Depending on your industry, products and services may change a little or a lot. At CWS, our industry is in constant evolution, and we must constantly make changes to adjust to the market. Along with that comes the decision to offer new products and services.
Me: How do you decide what products and services to develop and sell?
Alan: It comes down to 5 things:
1. Is there a need and will it fill a hole or solve a problem?
2. What’s the market share? Is this something the whole world needs, or is it highly specific? Usually the bigger the share, the more opportunity for success.
3. Is there recurring revenue opportunity? Things that you can build once and sell over and over are going to be more profitable. For example; writing a book. Or on the flip side; is it something that requires a lot of ongoing work?
4. Can you be the best at this in the world? Can you do it better than anybody else?
5. Is your team excited about it?
Me: How should you launch a product?
Alan: Realize that the intro phase is the toughest. You have the most work, and the least revenue. Every product goes through the product life cycle. To make it less painful-look at other industry partners that can help you launch it.
Also - what channels are you going to use to promote it? Can you afford to promote it? In today’s world it’s important to have social media on your side. Many of the world's greatest products and services have greatly reduced their initial advertising costs because they’ve been smart about social media, social sharing, and the power of word-of-mouth advertising. Instead of spending substantial amounts of money on advertising, they get bloggers talking about their services, which in turn, gets others excited.
A common mistake on product launch is quitting too early.
Flappy bird was developed and was not an overnight success. Things that appear to be overnight successes, usually have a team behind them and years of development. Don’t be discouraged if everyone’s not excited about your great idea on the day you launch.
Me: How do competitor's products come into play?
Alan: If you’ve done a good job of question #1, hopefully there’s not a lot of competition in the marketplace. It is good to be the first to the market with a good idea. If you’re well into your launch and a new competitor comes in and is making an impact, then you need to take another look. We had some first ideas but then new competitors came into the market. You then go back to #1 and ask yourself again, can I be the best?
Me: When should you “kill” a product?
Alan: Many companies hang on to something way longer than they should. It’s hard to kill your baby. Go back to original question. If people aren’t passionate, if you can’t be the best in the world, it might be time to kill the idea. If you hang on to something too long, you don’t have room to develop something new.
However, keep in mind that every product and service has a life cycle. They start off slow, rise quickly and then peek and start to fall off. Maybe killing the product isn't the right decision. The right decision may be to re-invent the product or marketing of it and launch, "The New and Improved _______."
It is essential that you constantly think about new products and services, or if there are new ways to deliver them. You have to think beyond what it takes to launch, but what it takes to maintain and improve. Always remember, if you’re not growing, you’re dying. Be careful. There should be a strategic process behind it (see #1). Product offerings should help you grow.