Product Improvement vs Addition: What is better for your business?

Nov 11, 2016 by Matt Dixon

Some people say there are no new products or services, just evolutions of what’s come before. To a degree, that’s true, but in practical terms, if you’re looking to expand your reach or improve on what you offer customers, you have two choices: add new products or improve existing ones. Which is the better choice for your business? It depends.

There are no hard and fast rules, and a quick internet search will give you plenty of pros and cons for both sides of the equation. You may discover it saves on resources to improve an existing product, but that you can increase growth by introducing an innovative new one. In other words, attracting new customers may outweigh making improvements to satisfy those you already have. In the end, a bit of both is probably the right answer. What’s important is to consider your company’s own situation. To help figure it out, ask yourself these questions.

Can Your Existing Product Use Some Improvement?

If testing shows your existing products have significant weaknesses, or if customers are leaving consistent feedback about changes they’d like to see, make improvement your first line of attack.

Where Do Your Products Stand in Their Life Cycle?

If there are existing products that are close to retirement, it doesn’t make sense to invest resources improving them. There’s simply no return in doing so. If a product is new to the market, you may need to give it some time to find its following. The ideal spot for trying improvements is right in the middle – using data and feedback, you introduce improvements that boost revenues and increase the product’s lifespan.

Will a New Product or Service Leverage Existing Ones?

New products introduced to existing happy customers can help mitigate any investment risk. If you can leverage those fans for both products and customer service, you’ll realize costs savings and create even better relationships.

Are You Introducing a New Product to a New Market?

This is your riskiest and potentially costliest path. The double whammy of entering a new market with an untried product is difficult and can take up a lot of time and resources. Raising consumer awareness isn’t easy and enthusiasm for your product could take substantial time, even years. Unless you see the long-term advantages, this is your least attractive option.

Do Your Homework

Which of these options is the right way forward comes from information you get from internal sources like financials, customer feedback, sales, and prospects, or from third-party sources like product review and outside market data that helps you measure potential customer interest and demand. Perhaps the best question to ask yourself is this: which choice solves the customer’s problem better and protects your bottom line? Go with the one that comes close to providing both equally well.