When to prioritise new products/categories/revenue lines?
When to Prioritize New Revenue Lines:
Ideal for businesses in the Growth or Mature/Late Stages, especially when leveraging an existing customer base and a well-established brand. Examples include a marketplace adding new product categories, D2C brands launching potential new hero products, or SaaS companies introducing additional services.
When Not to Prioritize:
Less advisable in the early stages where establishing a strong product-market fit is crucial. Diversifying too early can dilute focus and resources.
Identifying Opportunities:
Analyze customer needs and market trends to identify gaps. For instance, a marketplace might notice a demand in a niche product category, a D2C brand may find a new trend resonating with their audience, or a SaaS company could recognize the need for complementary services.
Validation Before Full-Scale Launch:
Use Minimum Viable Products (MVP), prototypes, or beta testing for validation. For example, a marketplace might test a new category with a limited range of products, a D2C brand could do a soft launch of a new item, and a SaaS company might offer a beta version of their new service to select clients.
Strategic Considerations:
Ensure the new line complements your core offerings and brand identity. For example, a marketplace should choose categories that align with its existing product range, a D2C brand should ensure new products fit their brand ethos, and a SaaS company should add services that enhance their existing software suite.
Measuring Success:
Track the new revenue line's performance using sales growth, customer uptake, and overall business impact. Continuous adaptation based on these metrics is crucial.
Takeaway:
New revenue lines can significantly contribute to a business's growth and profitability. But they require alignment with the core business, and fresh evaluation for product-market fit.