The coronavirus pandemic has dramatically changed the way many small businesses operate, but it's also opened up countless opportunities to pivot to meet consumers' needs in the current climate. That's why right now might be a great time to pursue a new product or service offering in your business.
While you may have a solid idea, it's important to first evaluate the market opportunity and plan your launch carefully to ensure success. Here are a few important things to consider before expanding your business with a new produce or service.
Signs you're ready to expand your offerings
Think it's time to delve into a new category? Consider the following indicators:
Growth of your best products has slowed down
Most businesses find that one or two of their initial products or service packages emerge as their "bestsellers." It's time to pivot toward a new direction if sales of those offerings have begun to slow after 18 to 24 months of consistent growth, said William Gaunitz, WTS, certified trichologist and founder of the Gaunitz Trichology Method.
"If your products are not selling, find new ones to sell," added Samantha Ettus, founder and CEO of Park Place Payments.
Your customers have asked for something different
COVID-19 has impacted your customers' daily routines, which may include the way they use your product or service. They may need a different or more expansive offering to adjust to their new lifestyle — and you won't know that unless you ask.
"As a small business owner, you … have a direct relationship to your customer, and you have access to immediate information on what is working and what is not," Ettus told CO—. "Take advantage of that by talking to your customers about what they want and deliver it."
In other words, don't wait until your sales decline; be proactive and ask your customers about how you can improve your product or service.
[Read: 10 Businesses You Can Start During a Pandemic]
There's an opportunity to offer a sustainable complementary product or service that your customers would find valuable
Sometimes, the opportunity for expansion presents itself in the form of a product or service that enhances or adds value to your existing offerings.
"Adding a complementary SKU would be advantageous to synergistically grow existing SKUs and launch a new product," Gaunitz said.
The new product must have a story or a clear competitive advantage for it to be considered.
William Gaunitz, WTS, certified trichologist and founder of the Gaunitz Trichology Method
Tips for planning and launching a new product or service
If you've determined now is the right time to expand your offerings, follow these steps to ensure a successful launch.
Study your customers' spending patterns and current behavior in today's climate
Your customers' current behavioral and lifestyle changes in the post-COVID world can be a great indicator of how your new product or service might perform.
"Think about your customers' spending patterns," said Ettus. "If you are a clothing boutique, your customers are getting dressed up less and spending more time at home, so you might start carrying more sweatpants and pajamas. Keep your customers' lifestyles in mind at all times."
[Read: Starting a Business During a Pandemic? What to Consider First]
Define your competitive advantage
Look at similar offerings that are currently available in the marketplace. Understand how those products and services are selling in this climate and determine how you can improve upon and stand out from your competitors.
"Make sure that the offering is sustainable, has a fluid source of components or raw materials, and that it can compete in a highly saturated environment," said Gaunitz. "The new product must have a story or a clear competitive advantage for it to be considered."
Plan out your marketing strategy
Great products don't sell if no one knows about them. A well-thought-out marketing strategy helps you get your product seen by those who are most likely to want it.
Ettus specifically recommends a marketing plan that allows you to engage with your local community.
"The more you embed yourself into the community, the more locals will feel a connection to your business and what you offer," she said. "Share your product launch with the local paper [and] Chamber of Commerce, launch a contest to win one of your new products or services, and maintain a positive front to your customers at all times."
[Read: 5 Small Business Owners Reveal How They Are Marketing On Social Media During COVID-19]
Line everything up for a multi-platform launch
Gaunitz reminded entrepreneurs that they'll need a clear launch strategy for their new product or service to be able to compete in the current online, digital-first economy. If you're offering a retail product, for instance, you'll want to be ready to launch simultaneously on both your own e-commerce platform and sites like Amazon.
"Launch strategies on multiple platforms … need to be … ready to go prior to launch," Gaunitz said. "Review generation, fulfillment and supply chain reinforcement have to be at the top of the list, along with successful marketing to ensure a successful launch of a new SKU."
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
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