The importance of "Strategic Products" in your wallet

Accountants like to tell personal marketers that certain products or services in the portfolio are not making a living and should be phased out. Create this at your own risk! Let’s see some examples:

In the gypsum board industry a few years ago, “fire resistant” board sales were minimal compared to other variants and the profit margin was lower than for most other items. However, what if that product line formed a strategically important part of an overall purchase?

The answer: A real situation that we discovered in a discussion with many customers was that it was simply not worth getting that component from a different supplier – it was simpler to get the entire order elsewhere, especially when the prices were so competitive and the service it was comparable.

Here’s another from a different industry:

A major supermarket chain “rationalized” the product range by eliminating a breakfast jam variant in favor of a “reduced sugar” product from the same supplier. The competitor’s supermarket kept the old variety. This wasn’t the first example of streamlining products across several different categories, including bread, pet food, and toilet paper.

The result was that despite being creatures of habit and loyal customers of that chain for many years, annoying customers simply changed supermarkets in order to continue buying their favorite brands.

And another example:

A hardware chain rationalized its range of sealants, again because some were sold in very low volume. This was despite the fact that that item was generally just one of several bought together. You know the result. That particular brand and item were “strategically important” to certain customers who simply took the business to a different supplier OR, horror of horrors, they bought it online.

What? Switch to online shopping?

Almost regardless of category, humans are largely creatures of habit. In most categories, we become familiar with a particular store, its layout, product range, and staff. The same is largely true for products and services, and usually there has to be a good reason for the change. It does happen though, perhaps due to an advertised item from a different store, loyalty points, a staff change, and certainly not being able to buy reliable, familiar items.

It doesn’t take long to forge a comfortable bond with the new provider if the experience is positive, and this applies to ISPs as well as traditional points of sale.

The new experience could overcome those old confused feelings. Bye and good luck.

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