How to Conduct a Quick Assessment of Your Products

How To Conduct a Quick Assessment Of Your Products

Products and services are what you provide to solve your customers’ problems.

All businesses and organisations, as part of their product marketing strategy, have a range of products and services they offer.

(Please note: I’ll use the words products/services interchangeably in this article).

As time goes by, some of these products no longer serve their purpose. Some of them are costing your organisation money – rather than making it. And some of them will be dragging your company back and draining energy and resource.

You probably already know that your Product Mix needs to be reviewed.

But where do you start?

There are different ways to do a Product Mix Assessment; one of the most well-known is the Boston Consulting Group Matrix. This can be a useful tool, but it requires time to get the data together and it works best when all the right people in an organisation are involved. 

What about when you are short on time and need to start figuring out right now if you have the right products?

Here’s a guide on how to do a quick assessment of your products, so that you can see where the problems and opportunities are, as a first step to improving them.

The Quick Assessment – Three Steps

We’re going to work our way through three steps that you can take to assess your products:

  1. Organise them 
  2. Are they profitable? 
  3. Are you passionate about it?

Then we’ll suggest what your next steps should be.

Organise them 

The first thing to do is to get them all into one place, so you can visibly see every product or service you are offering.

I like to use this matrix:

Product Category:

 

Product 1: 

Product 2: 

Product 3

One line description

   

Product Category is the umbrella name for one group of Products. 

Examples of Product Categories include:

  • Consultancy Services (Products are ‘Reviews’, ‘Planning Sessions’)
  • Toiletries (Products are toothpaste, deodorant, soap)
  • Self-serve training courses (Products are all the Self-serve training courses on offer).

It could be you offer products that are in more than one Category. If that’s the case, then you need a table that looks like this:

Product Category 1: 

Product Category: 2

 

Product a1: 

Product b1: 

Product c1

Product a2: 

Product b2: 

One line description

     

Next, start to list every single product or service you offer. Every one of them. If it is mentioned in any of your marketing, then put it down.

If you have told a prospect or a client that you can do it, then put it down. If it is outside of your listed categories, put it down.

Why?

The power of doing this is seeing all of your Products organised in one place. When I do this exercise with clients and course members, what we often find is:

  1. Companies have too many products
  2. Companies have an uneven spread of products across their categories
  3. Companies have too few products 
  4. Companies have products that they can’t actually deliver anymore (!).

Now you have them all listed out, cross off the ones that you immediately know you can’t offer anymore.

Let’s carry on with the Assessment to see what to do with the rest.

Are they profitable? 

Too often organisations are selling products that aren’t profitable. If you don’t have your actual profitability figures to hand, then guess them and put in the number of sales for that Product too. 

Product Category:

 

Product 1: 

Product 2: 

Product 3

One line description with the price

Product 1 does this. Its price is £1000.

Product 2 does this. Its price is £500.

Product 3 does this. It’s price is £100

Profit 

10% profit margin

5 sold over last quarter = £500

50% profit margin. 5 sold over last quarter = £1250

50% profit margin. 5 sold over the last quarter = £250

A quick look at this example is quite startling. It reveals that our most expensive product costs so much to deliver that it barely makes a profit. While it brought £5,000 into the business only £500 of that was profit.

Compare it to Product 2 with a much lower price point but a much higher profit margin. The same amount was sold but while Product 2 only brought in £2,500, it made £1,250 profit. 

What can you do?

The first course of action to consider is: can you increase the profitability of Product 1? 

  • Raising the profit margin by 5% to 15% means a further £250 would have stayed in the business. 
  • Raising the profit margin by 10% to 20% means an additional £500 profit, so £1000 profit in total which puts Product 1 on a more equal footing with Product 2.

If there is absolutely no way you can increase the profitability of Product 1 then the decision is: do you really want to keep it?

The third step can help you answer that question.

Are you passionate about it?

It can be a strange thing to talk about emotion when it comes to business. But people who enjoy what they do and really like providing their product or service make success more likely.

Before we look at your Products and how passionate you are about them, let’s consider the flip side:

  • Have you had to market and deliver a product or service that you weren’t keen on? How did that feel? How did that go?
  • Have you offered a product you didn’t actually want to talk about? Or groaned inside when people asked if you still do that?
  • Have you ever worked in an organisation where people hated delivering something? What impact did that have on you? On the business?

We are emotional beings. And if we’re working on something we aren’t keen on or don’t like doing, it can deflate us. When you put this into a business context, it can start to drag you back – and bring the business down.

So, now we can see why not wanting to deliver a product or service can have an impact, let’s turn our attention to your Product Mix and see how you feel about each of the Products in there.

By the way, if you’re part of a team, this is a great way to get an honest discussion going; it could be your colleagues are getting dragged down by a Product and you don’t know about it.

Product Category:

 

Product 1: 

Product 2: 

Product 3

One line description with the price

Product 1 does this. Its price is £1000.

Product 2 does this. Its price is £500.

Product 3 does this. Its price is £100.

Profit 

10% profit margin

5 sold over last quarter = £500

50% profit margin. 5 sold over last quarter = £1250

50% profit margin. 5 sold over the last quarter = £250

Passion

Score 1 to 3, 1= hate 3= love

Score = 2

It’s okay delivering this

Score = 3 really love delivering this

Score = 2, it’s fine delivering this.

We can now see very clearly that Product 1 needs to be addressed. If this was a Product that you loved delivering and felt really proud of it, then that would be a strong case to keep it. If you hate delivering it, then that combined with the profitability is a good reason to get rid of it.

In this case, the original assessment of Product 1 still stands. You need to find a way to increase the profit margin and also make it more enjoyable to deliver.

Your next steps

I’ve used some simplified examples to highlight how you can start to quickly assess your Products. Doing this quick assessment is the first part – you should now have a good picture of what your Product Matrix looks like.

Next, is deciding what you want it to look like.

Your goal should be to have a Product Mix full of profitable products that you love delivering. With that in mind, it’s time to decide what to do next. 

To help you determine your Product Marketing Strategy (the approach you are going to take to move a step closer to that wonderful goal), here are some questions to answer:

  • Do you have too many Product Categories?
  • Do you have the right spread of Products across your Categories?
  • Do you have too many / too few Products?
  • Are you going to get rid of all the Products below a certain Profit Level?
  • Are you going to improve the Profit margin?
  • How can you make the least passionate products to deliver more engaging for you?

This quick approach to a Product Assessment is to get you started – before you make any decisions about your Products, I always advise clients to get more data and do some research.

Then make the right decisions to move you a step closer to that amazing Product Matrix full of profitable products you enjoy delivering.

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