Thriving businesses in mature markets
Maybe your business has been in the industry for a while and your product has passed the stage from a novelty, disruptive product to a mainstream product, as the market matured in the meantime.
Back in the days of hyper growth your business was busy shipping out products at the fastest rate possible to service every customer possible, while gaining market share at the same time. Now that the dust has settled, the market share in your industry might look something like the graph above.
As the market is divided up between established competitors, there is no significant gain of market share possible at the cost of the other party, unless some serious shortcomings come into play unexpectedly.
So, where does the revenue your company needs come from, if there is no more hyper growths sales to be had?
The answer is simple, yet difficult: your existing customers.
In this stage of the product life cycle, your company needs to change its marketing and service strategy.
Analyzing the situation:
- Your products and services are mature and bug free.
- Your customer bought not just a product from you, but a complete solution catering to the relief of a situation / need.
- Customers are used to the way of consuming your product just as you showed them during the boom years.
- Customers using your product are not risk buyers anymore
A word on accommodating mainstream customers:
- Customer service has to be impeccable
- Products must be easily accessible
- Product strategy needs to accommodate specific needs
- Marketing / sales relationships need to be adapted to your customers special needs
Possible revenue scenarios:
Your customers are used to buying and consuming your product, and you need to use this very circumstance to your advantage. Now that you don’t need to convince your customers anymore that your product works, the revenue gain is in adding value to your existing product at a low margin in order to stay profitable and to be able to drive home a good margin.
1.) Using past investments
While developing your product or service, most likely you spent some serious money on research and development for features that are already included in your product, but not actively used by mainstream clients. Selecting an underused feature of your current product and renaming and re-marketing it to a niche with a need for this special feature opens up new potential revenue streams.
2.) Slight modifications
By segmenting your customer data into meaningful segments you will be able to find common necessities that exist in large enough portions of your client base, worth doing a slight modification of your current product for.
Updating the current product with new value added services (“VAS”) is another way to generate revenue. However, this is only viable if the VAS can be retrofitted at a reasonable cost / profit margin.