Many business owners delay updating their product portfolios to give themselves time to address other crucial operational tasks. Giving your portfolio a makeover may seem optional, but failing to do so could be a big mistake. You never know how many customers and opportunities you might miss out on because of an old, outdated or otherwise unappealing portfolio.
Retail business experts agree that having an up-to-date portfolio is essential for attracting new clients. There are few things that can send your company down the sink as quickly as having a limited or overcomplicated product portfolio. But having one thatโs out of touch with the times or poorly selected cuts a close second.
Here are 10 simple ways to reshape and revive your product portfolio, inspired by current consumer trends. Use these tips and youโll increase your chances of attracting the business your enterprise deserves.
1. Assess Your Portfolioโs Needs
Often, businesses enjoy periods of strategic portfolio growth, and use them to improve their top and bottom line. However, product proliferation can create a level of portfolio complexity that comes with unexpected consequences, including supply chain challenges. This can notably impact your companyโs customer service, product quality and prices.
A cluttered product portfolio that spans numerous lifecycles may direct a company away from its intended route while introducing more inefficiencies. Many businesses recognize this and attempt to address it, but cannot always do so using standard complexity management (CM) programs and โtail-cuttingโ practices.
Instead, a more extensive and modern approach is needed. Your approach should go beyond tail-cutting to refresh and reshape your product portfolio to add value to your business, and offer customers appropriate products that are on-trend too. Closely assess your business and product portfolioโs needs according to the wishes and demands of your target market, then de-complicate your portfolio accordingly.
2. Gauge Your Portfolioโs Health
If you are to move beyond the facade of tail-cutting, youโll need to test the health of your product portfolio comprehensively. Consider metrics like sales revenues and gross profit alongside broader stakeholder factors.
You need to take into account real end-to-end profitability, your fully burdened net margins, cash flow impact, and strategic value to test your portfolio effectively. You also need to consider the quality of your products and service, and remain realistic about areas that require change.
3. Think About Strategic Value
Consider the strategic value of every product currently included in your portfolio, especially compared to current industry demands and trends. Understanding the value of brands and products beyond basic metrics is essential to the decision-making process.
Your portfolio should reflect your companyโs strategic objectives if you want to offer customers the best value for money.
4. Consider True End-to-End Profitability
Any business ownerโs primary interest in reshaping their product portfolio will be of a financial nature. With that said, many companies fail to measure true product profitability during this process.
Gross profit margins may be a good starting point, but they cannot provide a complete measure of product profitability. They tend to under-represent low-volume production costs and your enterpriseโs operating expenses. Instead, use your net margins to give you a clearer picture of your portfolioโs real financial health. This figure includes all of your operational costs and the costs of goods sold, along with marketing, distribution and R&D expenses.
5. Assess Your Quality and Service
This measure of product portfolio health is often ignored, but itโs essential to take into account. Quality and customer service strengths tend to be concentrated in specific parts of your portfolio, so a product or category should receive less priority within the portfolio if it cannot be delivered consistently, or in excellent quality.
Such unreliable products can damage your companyโs reputation among customers and may cause major internal expenses. When reshaping your portfolio, consider removing them. Take to social platforms to gain customersโ first-hand opinions on changes theyโd like to see in your portfolio.
6. Prioritize Complexity Management
Your implementation of a modern CM program or protocol should look beyond simple tail-cutting. The latter approach often prompts decisions and actions that are less than ideal, and can leave your business lagging behind those moving with the times.
Experts instead recommend adopting a more holistic and rounded approach, which includes a detailed assessment of the health of your product portfolio across numerous levels and stakeholder groups. When you adopt this approach, your complexity management program can reduce the complexity of your portfolio, deliver big monetary benefits for your business and create a great portfolio of products that your customers will love.
7. Refresh Your Current Product Line
If youโre already satisfied with the products youโve developed, or if youโre pressed for time, determine slight variations you can make to your product portfolio to keep it up to date. Include new and exciting features, examine the elements of products that make them appealing and change them up if necessary.
There are so many ways to adjust the styles and ranges of products you offer without making major changes to your line. Remain open-minded and pay attention to feedback from your loyal customers for best results.
8. Introduce a New Collection or Line
This is a simple but effective way to give your product portfolio a rapid makeover. Letโs use an example of a company that sells fashionwear, including womenโs clothing and shoes. This company could diversify to meet consumer demand and introduce a new maternity wear range, menswear range or even a selection of handbags or accessories to further enhance their portfolio. It could add products of different or higher quality materials to their store, or perhaps even introduce a collection of high-end wedding apparel.
Whichever new collections or product lines you add to your business, be sure youโve considered your target market and acted in line with their interests and desires first. By conducting market research in the same way you would when compiling a business plan you can fill a niche or meet a demand successfully.
9. Update Older Best-Sellers
Some products your business sold in the past may have been popular best-sellers that eventually lost popularity among your customers. Most times, you may be able to redesign, refresh or revive these cornerstone products and get them back on your top-selling list again.
To achieve this, you could redesign an old product in new colors or styles, reformulate a product to create a โnew and improvedโ formulation, or source similar items of superior quality and build.
10. Remember That Less is More
As mentioned above, product portfolio complexity doesnโt necessarily guarantee success, especially in todayโs age. Many companies offer diverse product ranges to stay competitive, but a large percentage of them do so without fully understanding the increased complexity and costs that come along with this decision.
A wider selection of products also may not be as valued by customers as a good quality, reliable and thoughtfully selected (but smaller) range.
Less is often more, so shape your product portfolio accordingly.
Kristie Wright is an experienced freelance writer, covering topics on finance and business, often catering to small businesses and sole proprietors. When sheโs not typing away at her keyboard, she enjoys roasting her own coffee and is an avid tabletop gamer.
