Should you let go of a product if it’s profitable?

Posted on August 3, 2022

Updated on August 3, 2022

5 min read time

In business, profitability is often thought of as the ‘end goal’. Something to strive for to prove the decisions you’ve been taking are paying off.

 

But growth is about more than just the commercials – and if your brand wants longevity, it needs to invest time into establishing strong consumer relationships to build long-lasting loyalty.

 

That’s why perfecting your products is such an important step for any brand. Your product portfolio is an extension of your business, so it’s crucial it embodies your core values, conveys your messaging accurately and is of the quality your audience deserves.

 

And when one of your products doesn’t live up to these standards? Well, it might be a sign to let it go.

 

In this blog, we’ll guide you through the process of letting go of a product, exploring:

  • When you might want to replace a product
  • How to replace a product
  • How to judge whether you’ve made the right move

 

Why you might want to replace a product

 

There are many reasons why someone might want to remove a product from their portfolio.

 

And these reasons can be distilled into three key elements:

  • Is the product still a good fit for your brand?
  • Does the product align with the cultural context surrounding your brand?
  • Does it serve the needs of your audience?

 

Brand

 

Brand trust is all about the power of your consumer relationships. And this relates back to authenticity. Ultimately, if your consumers believe the actions you’re taking are consistent and genuine, it’ll be easier to instil loyalty. And as your products are a direct representation of your business, you must ensure every new release strengthens the brand image you’ve spent so long cultivating.

 

Say you were a cereal brand, and your mission was to promote healthier lifestyles through natural ingredients and less artificial flavorings. It then wouldn’t make sense for you to jump on a new trend if it meant compromising your existing beliefs and producing cereals with overly sugary or high fat contents, for example. In this case, prioritizing your core brand values over short-term sales would help to ensure consistency and drive a strong value proposition.

 

Blog - Madfest2 - Healthy cereal brand

 

When deciding whether your products are consistent with your brand, ask yourself:

  • Is it driving the right message home? Think back to your brand’s strategy. Is your product driving your brand in the right strategic direction to achieve its goals?
  • Are you proud of your product? Reviewing the quality of your product is key. Look at every aspect of execution - from whether the look and feel of your product is right to its emotional and functional benefits, like whether it’s good value for money.

 

Cultural context

 

Is your product still in tune with the times?

 

Trends come and go, and what was once fresh may now be old news - think of the once popular, Cinnamon Challenge. 

 

Blog - Madfest2 - Cinnamon challenge

 

That’s why it’s important to continuously review your products to see if they still resonate with the context surrounding your brand.

 

Ask yourself:

  • Is the product you’ve released still relevant to consumers in this given moment? For this you’ll need to consider the cultural backdrop. How will current events impact consumer needs? For example, amidst rising inflation, can consumers continue to buy you at the same price and pack size?
  • Is your product still connecting with consumers? Has your product evolved along with your audience? With COVID-19, consumer needs changed rapidly, and products had to adapt quickly in order to keep up – changing up pack formats, delivery methods, retailers, and more.

  

Audience

 

To remain relevant, you’ll need to ensure that you’re targeting the right audience, at the right time with the right message.

 

As times evolve, the needs of people change – and these changes are entirely category dependent.

 

Staying empathetic is what will set you apart from your competition, helping you to create products that your audience really need not just want.

 

Is it necessary to divert away from male and female-specific SKUs, for example, and instead build one universal product to encompass the needs of both audiences?

 

To ensure your product is keeping up with your audience, ask yourself about:

  • Your category – Does your audience expect different things from brands in your category or are you still delivering upon what’s most expected (while disrupting when it makes sense).
  • Your competition - Have there been new entrants to your category which have impacted the way your audience feels and thinks about the category. Are there new quality standards, benefits or formats you need to now compete against which would require new product development/innovation on your part?

 

How to replace a product

 

You want to catch your product before it becomes unprofitable, not after.

 

Stay on top of this process by reviewing your product catalogue frequently to judge whether some products can be revamped or replaced.

 

You can use these questions to guide your thinking during this process:

  • Will the buyers of the product I'm removing buy another product in my portfolio, or will they go to a competitor brand?
  • Will removing this product maximize the performance of my best-selling products?
  • Is there a new product I have in development that could deliver more incremental turnover for my brand compared to the SKU I'm willing to replace?

 

When removing a product, the aim is to replace it with something better – not to scrap it completely. If you remove one of your products without replacing, the chances of you losing listings in-store are high, as one of your competitors will fill the gap you’ve left in aisle.

 

The new product should bring in more incremental revenue than the previous product. But this can be difficult to guarantee. So, to support you on this, we wanted to show you how creative testing can help you to see whether your new product idea will stack up against what’s existing.

 

Solutions like CreativeLab allow you to compare packaging designs, ingredient lists, claims, and more – so you can judge how consumers will react to the changes you’re making before you invest the big bucks on them.

 

Simply place your pack designs or product ideas in the testing platform – comparing the new product with the old - and you’ll know within hours which one has the better audience reaction.

 

Blog - Madfest2 - CreativeLab

 

Platforms like these can be used to test any creative idea not just new products.

 

Let’s break down how they work for products in three simple steps:

 

1) You upload assets 

2) The platform shows your assets to people within your category

3) You receive feedback on which asset performed best, as well as tips on how to optimize this winner to ensure the most ROI

 

To see how brands are using testing platforms like these to secure ROI, click here.

 

How to judge whether you’ve made the right move

 

Testing is one thing, but wouldn’t it be great to have a way to track whether the move you made actually paid off?

 

Nowadays, the types of brand data you can collect are wide-ranging from:

  • Awareness data (both prompted and unprompted): To show you the extent of your reach and memorability
  • Brand health and sentiment intelligence: To give you an understanding of how your brand is perceived by its audience
  • Brand loyalty and consideration data: To show you how loyal your customers are
  • Analytics of current and previous campaigns: To help you improve on future ventures

 

And when it comes to evaluating the performance of your products, you can use a variety of methods to gain this kind of data – from brand trackers to social listening services.

 

However, occasional dips into the market and tools that crawl the internet for mentions can only get you so far, as they only provide a quick glance into brand performance since they only show you how you're performing at one specific moment in time.

 

To really understand how your new product is performing, you’ll need live monitoring platforms – like ProQuo AI.

 

The key difference between this solution versus a traditional brand tracker is that all of this data is in real-time. It’s live and constantly gathering data, so you can remain on top of your customers’ most important needs, the latest steps of your competitors, your own brand performance, and the newest category trends, at all times.

 

Because you have a live read on your brand, when you launch something new you’re able to immediately see the impact of that action via people’s reactions on your own brand.

 

Blog - Madfest2 - Diagram

 

 

Blog - Madfest2 - Drivers

 

If you’re looking for guidance to help you launch your next new product, click here.

 

Or if you want to see how ProQuo AI can help your brand, click here.

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