Questions

What is a better business growth strategy: selling more of the same product, expanding product offering, or both?

Context: I own a t-shirt printing startup in Singapore ranking really well on google for search terms related to apparel printing. We get lots of enquiries on a daily basis, but conversions are not great and it is a price competitive industry. So we are figuring out the best way to increase our revenues and profits - Should we focus on printing other items and offering more products like corporate gifts, or just focus more on marketing and selling more of what we are selling currently (Mostly Apparel)?

8answers

First I would try to figure out why your conversion is not great. Also a level deeper finding out what a normal conversion rate in your market actually looks like. There are markets that have naturally low conversion rates - are you sure that yours is below market standard?

If yes - this would be my first point of action. Increasing conversion to or above market standard. As long as you haven't done this you are not playing the market to its potential. If you are playing close to potential it might actually make sense to put more pressure on the pipeline because you seem to have a product that at least is average. If conversion is below market standard I would look deeper into the offering itself - it does not make sense to put pressure on the pipeline for a below average product.

Whether diversification makes sense is a complex question. Production capabilities, costs per unit, cross & upselling potentials with your core offering etc. all needs to be taken into account. I personally prefer to establish the core product (the product I can produce and sell with a reasonable margin) first and then move on vertically. First step here is to iterate the offering (product core + services around it + pipeline leading to it....) to a good product-market fit.

Last but not least - just talk to your customers. Why did they drop off? Whom did they choose and why? etc. etc.

In the end everything you do is communicating with "the market" so the best thing you can focus on is to learn "how to properly listen to what the market tells you".

From there you can derive most of the answers for your business.

Hope that helps.

Feel free to reach out in case of follow up questions or need for elaboration. All the best with your venture!

Karl


Answered 10 months ago

My advice is always to consider how to increase profits versus revenue - "Revenue is vanity, profit is sanity and cash is king". I recommend that you figure out what your customers truly want and value. That will help you with either or both approaches of new versus existing customers. There are many ways to do this and I am happy to talk to you about these. However, a quick and easy way to get started is to do the following:
1. In a spreadsheet, created a list of recent customers that will likely have decent recall of the experience of working with you.
2. Create 3 additional columns to the right of those names
3. In one column, write "Customers we REALLY like working with".
4. In next column, write, "Customers that REALLY like working with us"
5. In the 3rd column put in the "Profit %" or whatever unit you use for profit by customer.
6. Order them by the ones that have both of the first two columns checked and then by profit - highest to lowest.
7. Eliminate all those that do not have both columns checked and those that have zero profit or less
8. Send a note to the top 10-20 customers on this list asking the following, "If you were to recommend us to a friend or colleague, what would you say to them as to why they should also work with us" or something similar to have them talk about what they want and value in your relationship.

This information can be most valuable in getting new business and/or increasing business with existing people. It also may surprise you as to why your customers buy from which can also unleash growth in many ways.

Good luck!

Bill


Answered 10 months ago

As you mentioned apparel is a price sensitive industry. Since you are getting a lot of inquiries, but not enough conversions, you first need to review why you are unable to convert the inquiries into customers.
Given that this is a crowded, price sensitive market place, you should also explore your differentiation and positioning.
Lastly, definitely explore other markets where you could have better conversation.

Happy to chat!


Answered 10 months ago

If you are acquiring customers it is ALWAYS great to have more products to sell to them. It's easier to sell to someone who has already bought from you. Expanding your product offering and selling those products to your existing customer base will drive repeat sales and go a long way to increasing predictable revenue and protect you from algorithm changes. Leveraging email marketing and properly segmenting your customer base will help you do this!


Answered 10 months ago

I have a mixture of all the the answers previously but the bottom line is the best growth strategy is to implement a growth process. As Sean Ellis said, "No individual growth hacker or even a growth team can outperform a company where everyone is mobilized to accelerate growth." One opinion and one action won't create growth, it is rather a mixture of first analyzing and testing EVERYTHING. Qualitative AND Quantitative questions.

You can take a free growth assessment here https://www.growthswell.com/#assessment To find out what level you are at and then it will tell you where you need to focus first based on your answers.


Answered 10 months ago

The first thing to do is do assess whether your conversion rate is really that low. E-commerce conversion rates are around 5% for fashion and apparel. Considering you are a startup, then it's quite reasonable that you'll be getting a far lower conversion rate than the 5% average. Here's more info on e-commerce conversion rates - https://www.smartinsights.com/ecommerce/ecommerce-analytics/ecommerce-conversion-rates/ and https://www.invespcro.com/blog/the-average-website-conversion-rate-by-industry/

If your conversion rate is really low, then you need to determine the cause. Is it pricing, product offering, targeted customers, etc.?

If your price is higher than your competitors, then try to justify that higher price before dropping it to match (sure fire way to run out of business). You don't want to race to the bottom of the price pile as existing, entrenched competitors can undercut you. So, promote your benefits (faster turnaround time, quality products, impeccable customer service, etc.). Sure, there will be customers purely shopping on price, but there will be those who are willing to pay more with adequate justification.

Maybe you are targeting the wrong customers? Take a look at your current and past customers and see if there's a particular profile that the majority of those customers share. Then focus your marketing and website on those customers.

It sounds like you are doing custom apparel and other decorated goods, such as promo items. Most customers (typically businesses) looking for promo items and corporate gifts typically like to deal with as few vendors as possible. So, you can start with your existing t-shirt customers and ask them what other products they purchase or would like to purchase. It's a lot easier to sell to existing customers than to acquire new ones.

Good luck!


Answered 10 months ago

It's always best to maximize sales on an existing product, before creating a new one.

This could look like increasing traffic, trying to improve conversion rates, getting affiliate partners, etc.

But start to maximize your time and investment that you created with the first product, and create a best performing funnel for all your sales.

Once you feel your current product is selling at an optimal rate, it would be smart to create a product that is an upsell, downsell or crossell to the existing offer. And then follow the same outline with it to create maximum sales and traffic.


Answered 10 months ago

In order to gain organic growth you should focus on expanding product offering. Variety of products will attract more people towards your brand and will increase your customer base. Selling more the same product will be a short time limited scale strategy and will not help your company to grow organically.


Answered 10 months ago

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