If one product line is good, then two product lines should be twice as good, right? This logic has driven countless business owners to expand beyond an initially successful product line with an additional offering. However, it doesn’t always work, as attempts from the Ford Edsel to New Coke have illustrated. Here’s what you should know before adding a second product line.
Don’t assume you know what you're doing because you’ve had one winner.
“You would think it would be so easy to add another product line,” says Nancy Tedeschi, owner of SnapIt Screw, a Daytona Beach, Florida, maker of eyeglass repair kits. “It doesn’t always end up that way.”
Tedeschi claims her original product, an easy-to-use screw design for fixing broken eyeglass hinges, won rapid acceptance in the optical industry. But when she decided to try to replicate that success with similarly but larger versions of her patented screws, she found it was nothing like the original. The main problem was figuring out who might buy from her.
“The first time, I knew where I was going with the application,” Tedeschi says. “Now I have to start to do some research to find other applications.”
After brainstorming to think of additional uses for her screw designs, Tedeschi has identified computer assembly and furniture assembly as possible candidates. Now she’s calling companies in those industries to see if there are any potential uses for her second product line. But so far she hasn’t decided exactly where she’ll try marketing her second product line. “It was a very different process than the first time,” Tedeschi says.
Make sure your second product line won’t hurt your brand.
Joey Gilbert sells chalkboard stickers, dry erase boards, word magnets and similar products through his Hewlett, New York-based Mishu Designs. Now he wants to create a second product line, My Mighty Magnet, by breaking out a group of products that let people display photos, cards and other memorabilia using decorative magnetic holders.
Gilbert’s motivation stems from a desire to simplify Mishu Designs’ product line while highlighting My Mighty Magnet products. “The My Mighty Magnet will stand on its own,” Gilbert explains. “But a lot of times that was getting lost with all the other things to buy.”
Gilbert is embarking on a social media promotion campaign to establish My Mighty Magnet. But while energetically trying to build up the new magnet line, he’s also wary not to cannibalize sales of Mishu Designs. “You have to convince your customer base this is something they should re-invest in,” he says.
His hope is that the wholesale distributors who buy his products will see his efforts to create new packaging and promotion for the new product line as a reason to buy more from him, not dilute their purchases between two product lines. “You cannot forget what your core business is,” Gilbert says. “The core focus is the Mishu Designs brand.”
Ask yourself if your existing customers want the new product line.
As a one-product entrepreneur in an industry dominated by large competitors with extensive product lines, Tatsuya Nakagawa was always on the lookout for something to add to the Ecodur sustainable industrial coatings sold by Castagra of Reno, Nevada. “The challenge is there are so many areas,” Nakagawa says. “To pick the right thing to do is the biggest challenge.”
For Nakagawa, the solution lay in determining why some customers in their target energy and wastewater markets weren’t using Ecodur protection for some applications. “We found that for certain chemicals, we weren’t the best fit,” he says. “So we wanted to add a line that would complement that and solve a problem for our customers. It’s something that came up over and over.”
As a result, Castagra recently developed and is now introducing a line of polyurethane-based coatings to complement its existing vegetable oil-based plastic coatings. Nakagawa is optimistic that the new product will help existing customers find additional reasons to buy from Castagra. “Look for a product that customers are already willing to buy,” he says. “That’s the lowest-hanging fruit for most people.”
Make sure your operation can support the new product line.
Idan Shpizear could see that customers of his Van Nuys, California, carpet cleaning company would be able to use flood cleanup and mold remediation services. The founder and CEO wasn’t sure, however, whether his existing resources were adequate to provide the new line of services.
“If we expand, will the addition add value to the brand while still continuing to align with it and, ultimately will the expansion allow us to grow our existing operations while still providing them at a high quality?” Shpizear asked himself. He studied the equipment that would be needed, including whether his existing trucks could accommodate the extra gear. He examined his employees’ abilities and his training capacity, to see if the same people he was using for carpet cleaning would be able to do flood damage and mold remediation.
When the answers came up positive, Shpizear hired someone with experience in the service areas he wanted to add to help him expand his offerings. That was eight years ago, and today the franchisees of the company, now called 911 Restoration, get a large majority of their business from mold, water and fire cleanup.
The linchpin to his decision to a new product line, Shpizear explains, was asking himself whether he would be able to add the services without overburdening his employees, equipment and training. “Once all the answers are yes, yes and yes,” he says, “it makes sense to add another service.”