Today I’m going to talk about offering too many products and services. If you have too many products and services on the list and you offer too many choices, keep reading!
Is it a problem that consumers have too many choices?
It becomes a problem when you have too many things on the list, you’re trying to offer so many products and services. And it gets to a point where people don’t understand what it is that you do, or what it is that you sell.
The problem with too many options!
You spend five minutes or half an hour explaining what it is that you do and that you’re the best that this many services and that you’re the one stop shop for everything, say marketing and your you know you do everything, everything. And once you’re done, people go okay, I don’t understand what it is that you do.
You’re like: what’s wrong with you? I just explained for half an hour about what I do.
Or they say things like, oh, let me talk to my wife about it. Or let me see what my wife or boss has to say about this. They’ll come up with some sort of excuse to just get away from you because they don’t understand what it is that you do or what is your offer.
What happens when you have too many options?
You lose sales, your sales go down, and you think to yourself: Alright, to fix this, we need to add more services.
Why do we offer too many choices?
because we want to bring in more clients more sales and grow the business. And it works the exact opposite. When you expand your line, I think the book called The 22 Immutable Laws of Marketing calls it the law of line expansion or something to that effect.
By the way, it’s an amazing book, and I want to leave a link for you guys to take a look at it. amazing book. Very, very valuable. So we do it to grow the business,
9 problems when you offer too many products and services?
Too many choices, customers can not pick and choose!
Resources get diluted, and we spread ourselves thin
We cannot specialize and focus
We have a hard time delivering it
People don’t understand
My team is confused
My marketing is not focused
My overhead costs are high
We don’t make profits!
How do you fix the problem of offering too many products and services?
There are two steps in this process:
1- Grab the list of your services for the past 12 months and associated revenue with each service
You want to grab it from your invoicing software or from your accounting software, like fresh books or QuickBooks Online or you get it from your accountant or your accounting department.
Then, sort them by revenue, so the highest revenue earning service is at the very top and the lowest is at the very bottom.
You will notice that the top 20% of your services give you about 80% of your sales.
Those are the items that you want to keep and you want to focus on.
You will notice that the top 20% of your services give you about 80% of your sales.
Those are the items that you want to keep and you want to focus on.
Which products or services should I get rid of?
You will also notice that if you have so many services, at the bottom, you’re going to have these services that are about 0.01% of your sales. And about 10 of them add up to 1% of your sales.
Why is the product line pruning important to the health of the company?
Those are the services that you want to prune and you want to get rid of. Just like when you do prune your flowers or your trees, right? You got a bunch of dead branches on your services, you want to cut them off, so the rest can grow.
If you have too many dead branches on your services, it stops your business and slows it down. So think of it as pruning, and trimming and it brings life to your flower, which in this case is your business.
You need to do the pruning operation on the products and services that are not earning money. Get rid of them!
Do the pruning operation on the products and services that are not earning money. Get rid of them!
How to prune your product or service list?
2- You need to evaluate each service using the acronym SPICE. Here is the Framework:
S stands for sales
You want to know if each item is bringing you sales and revenue.
P stands for Profits
Is this item profitable? And do not mistake sales and revenue for profitability. An item could bring you $100,000 in sales, but you could be losing money on that item. So you might want to figure that out.
I is for your Interest
Are you interested in the service and product? Do you like offering it to people?
If you don’t like it, if you have to think about whether you like it or not, it’s out. You got to get it out and focus on the stuff that you like because your behavior rules show when you’re delivering your product or service and people are not going to like it.
If you don’t like it, get it out.
C stands for Competition
How much competition do you have in this area, with the product or the service?
If you have a lot of competition, get the product or the service out. If you have no competition or very few competitors, you want to keep it.
E stands for expertise
Are you an expert in delivering the service or creating this product? If yes, keep it. If you’re not an expert, or if you’re half-assed expert in this, get rid of it!
You can also rate yourself from 0 to 10 on each of these. If your average is seven or below or six or below, you want to get that service or product out.
That gives you a scale, a process to evaluate each service and product and then determine which one you want to keep, which one you want to prune and get it out, so you can focus on the very few that are actually working.
You could easily double your sales and revenue and profitability in a short period of time.
Hope this helps. Try it and let me know how it works for you.
You will probably need an Excel sheet to try this exercise on it. And then it’s very, very valuable.
I’ve tried it with a lot of my clients. Try it with myself and my company and it works really well.
When you prune and you get rid of a lot of non-working energy-sucking resource-sucking services or products, when you get rid of it, it just frees your mind and resources so you can focus on stuff that actually works.
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Your business and marketing coach
Have a great day
What is the problem with offering too many products?
1. Too many choices, customers can not pick and choose! 2. Resources get diluted, and we spread ourselves thin. 3. We cannot specialize and focus. 4. We have a hard time delivering it. 5. People don’t understand. 6. My team is confused. 7. My marketing is not focused. 8. My overhead costs are high. 9. We don’t make profits!