By Deb Dietz, President and CEO of SMB Value Partners, Inc.
Why do customers do business with you? It’s because you are offering them something of value, something they need and will willingly pay for. But as time passes, you may be noticing some things happening (and not good things). If you are paying attention to your sales and margin growth, and reviewing your product lines accordingly, you’re probably making adjustments in offering what your customers value (aka Portfolio Management). If your portfolio mix is appropriate and relevant, customers will willingly pay for that value. If not, you’re losing in a big way (revenue, profitability and customers).
Many organizations are uncertain as to who is responsible for portfolio management and how to do it. I’ve heard Finance point to Marketing, and vice-versa. But, to do portfolio management effectively, a partnership is required between Marketing, Finance, Sales Management and IT. As Marketing is the steward of your organization’s brand, they should take the lead.
Unfortunately, many Marketing teams are sole-focused on Marketing Communications (MarCom), ignoring / not understanding Strategic Marketing. If this is your organization, you should consider stepping back from the day to day Marcom and think about your brand. What’s the point in spending dollars on campaigns if the value you’re offering is increasingly irrelevant? You need to start an internal process where you are periodically reviewing your value proposition through a product portfolio review.
A product portfolio review is an analytical approach that identifies / classifies products or services in quadrants for action:
This approach classifies products and services as well as other operational assets of the organization that contribute to sales or revenue. Such operating assets could include membership dues, product sales, educational programs/events sales, registration fees, exhibit sales, revenue generated from e‑commerce websites, and more.
In order to conduct such a review, an organization should ideally use five groups of analytical techniques:
In order to do this effectively, consider resources that have expertise and broad experience in Strategic Marketing; resources that you can leverage to jump start your value growth engine.
Why do customers do business with you? It’s because you are offering them something of value, something they need and will willingly pay for. But as time passes, you may be noticing some things happening (and not good things). If you are paying attention to your sales and margin growth, and reviewing your product lines accordingly, you’re probably making adjustments in offering what your customers value (aka Portfolio Management). If your portfolio mix is appropriate and relevant, customers will willingly pay for that value. If not, you’re losing in a big way (revenue, profitability and customers).
Many organizations are uncertain as to who is responsible for portfolio management and how to do it. I’ve heard Finance point to Marketing, and vice-versa. But, to do portfolio management effectively, a partnership is required between Marketing, Finance, Sales Management and IT. As Marketing is the steward of your organization’s brand, they should take the lead.
Unfortunately, many Marketing teams are sole-focused on Marketing Communications (MarCom), ignoring / not understanding Strategic Marketing. If this is your organization, you should consider stepping back from the day to day Marcom and think about your brand. What’s the point in spending dollars on campaigns if the value you’re offering is increasingly irrelevant? You need to start an internal process where you are periodically reviewing your value proposition through a product portfolio review.
A product portfolio review is an analytical approach that identifies / classifies products or services in quadrants for action:
- Invest in for the future
- Maintain at the existing investment levels
- Investment should be limited
- Retire the offering
This approach classifies products and services as well as other operational assets of the organization that contribute to sales or revenue. Such operating assets could include membership dues, product sales, educational programs/events sales, registration fees, exhibit sales, revenue generated from e‑commerce websites, and more.
In order to conduct such a review, an organization should ideally use five groups of analytical techniques:
- Analysis of industry and market size
- Analysis of product life cycle
- Market segmentation
- Financial performance relating to sales growth and profitability over at least a 3-year period of time
- Utilize learnings gained from other research such as post-event evaluations, product satisfaction scorecards, member needs assessments, and more
In order to do this effectively, consider resources that have expertise and broad experience in Strategic Marketing; resources that you can leverage to jump start your value growth engine.
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