I was asked yesterday by a friend of mine to help him to investigate the idea of stocking a new product in his store.
But he had no idea if people would want it, let alone buy it.
So we went through the following exercise – I thought it apt that I share the same exercise here with you.
Keep in mind this list is all about the product, but could quite easily be a service as well.
1. Is there a demand for the product (either a real demand, or an observed demand). An observed demand is: if you ask, or someone asks you if you know of a product that will do X or Y and can you get it for them.
2. Does the cost of the product fit the demographic of your customers (can they afford it), and is it competitive enough for you to make a realistic profit from it?
3. Can they travel far to find a similar product – or will you be the exclusive supplier of that product?
4. How will you position that product in the customer’s eyes (i.e.: advertising, in store display, staff and your own training, etc.)
5. Is the product required by law or regulations to be sold in a certain way (this was relevant specifically to my client – and may very well not be to you)?
6. Have you done adequate research on the product (i.e.: not just taking the sales rep’s advice that this will sell) and do you know it’s positives and negatives, both perceived and real?
7. Can you contact someone else who is selling this product, in another city or state that may have advice on the way their customers interacted with the product.
8. Can you protect yourself by becoming the sole, exclusive distributor of the product? Or will other businesses see you selling the product and start to stock it too?
9. Can you reward early adopters of the product with something to thank them for taking a risk?
10. Look back at the answers and assess the risk yourself – is the product cost really worth all of the above, for the return that you will get?
Once you have worked through this check list, and answered the questions, the you will be in a much better place to see if you should, or should not, start to stock that product.
After running through this list, he found that not only could he do all the above, and become the exclusive supplier in the state of the product, but also – his customers had been asking about this particular product – and one had even bought one online because he needed it, and couldn’t wait.
Remember though, for the purposes of this blog – I am particularly interested in your answers to questions 4 and 9, and although they are relevant, they are not under the microscope here.
Your answer to question 4 will be a big one, can you get more bang for your marketing buck by specifically targeting this product in your advertising, and in store shelf/display area’s?
Remember that in today’s tight economy – negotiate, negotiate, negotiate with all of your advertising people to get the best value for money you can.
Remember that economic problems affect everyone – including the media, and they are after every dollar they can get – so play hardball, and negotiate.
A little tip: if their price is set in stone for what you should get, ask for something bigger for the same price (instead of lowering the price) it works!
Also, your answer to question 9 can give you not only customer loyalty, but can also give you some great advertising PR.
Here’s what I mean:
Your customers trust you – they may be early adopters, therefore, why not use them to rope in new prospects by way of your advertising, once they have bought the product, and used it then offer some type of compensation to them if you can film them using said product and put it on your website via your you tube channel.
My friend is planning to run an information evening with a free BBQ and giveaways, and show his loyal customers the product being used, he is going to film it and post the footage on his website, and try to use some of the audio grabs of his customers for a radio advertising campaign. He is then going to back that up by showing the video in store, on a screen right next to the product so people can see it being used.
This he hopes will not only drive people to buy the product, but also join his loyalty program, and email list. Very clever – I will let you know the results of this as soon as it is done.
So, if you are looking to stock a new product that you are unsure of (or even start a new service), answer the 10 questions – and assess your answers and come to the conclusion that is right for you.
If you have your own stories to share about this subject, or any other, then please write your reply below.
Thanks, until next time - keep on selling! Earl Pilkington