How Product Gaps Kill Your Company
An Elementary Illustration
Imagine you run a private elementary school. You have an incredible staff and an award-winning curriculum. Your school offers 1st grade, 2nd grade, 4th grade, and 5th grade. Look at that list again. There’s something missing. You don’t offer a 3rd grade class.
Now, consider the implications. If families send their kids to your school for 1st and 2nd grade, but then have to find another school for 3rd grade, what is the likelihood that those students will return for 4th grade? The answer: NOT LIKELY. And can you be mad at them for not returning? No way! What you can be mad at is yourself. You have a HUGE gap in your product offering!
By not offering a 3rd grade class, you’re forcing your customer base to go elsewhere for their children’s education. Even worse, parents might not enroll their kids in your school at all, knowing they’ll have to pull them out halfway through their elementary education. This scenario, while hypothetical, illustrates a critical point: product gaps can severely disrupt customer retention and satisfaction.
How To Identify Product Gaps
While it’s unlikely to find a school with such a glaring gap, businesses frequently make similar mistakes. Product gaps are when there are missing pieces in a company’s product or service lineup, leading to customer drop-off. These gaps can manifest in a number of different ways, such as missing features, lack of complementary products, or even inadequate service options.
To avoid product gaps, businesses must first identify them. This involves understanding the customer journey and figuring out where drop-offs occur. Here are some steps to help identify product gaps:
Customer Feedback: To better understand why customers drop off, one of the best ways is to just ask them why. This can be done by regularly soliciting feedback from your customers asking about their needs, issues with your product, and current pain points.
Market Research: Are there other companies selling similar or related products? Research their product line for anything you might not offer. This will identify potential gaps in your product line.
Sales Data: Do your sales tend to dip in November and December each year? Is there a product you’re lineup is missing that could pull customers back in during those months? Do research and identify patterns where customers are dropping off or not engaging with your products.
How To Address Product Gaps
Once identified, addressing product gaps involves strategic planning and execution. Developing a seamless product lineup does not happen on it’s own. Here are some strategies to consider:
Expand Product Line: Introduce new products or services that fill the identified gaps. For example, if a tech company notices a demand for a mid-range product between their entry level and premium offerings, they should develop and launch a product that meets this need.
Improve Existing Products: Sometimes, the gap can be filled by enhancing existing products with new features or improvements. This can make the product more appealing and useful to customers.
Bundle Products: Offering product bundles can provide a more comprehensive solution to customers, addressing multiple needs at once and reducing the likelihood of drop-off. This is also a significant value add to customers, more bang for potentially less buck.
Improve Customer Experience: While this may seem unrelated to addressing product gaps, you want customers to enjoy the overall sales process. Assess and improve any issues in your customer’s experience. This includes everything from the purchasing process to post-purchase customer support.
Continuous Improvement Is Key
Addressing product gaps is not a one-time task but an ongoing process. Businesses must continuously monitor customer feedback, market trends, and sales data to identify and address new gaps as they arise. This commitment to continuous improvement helps maintain customer satisfaction and long term brand loyalty.
Product gaps can significantly impact customer retention and satisfaction. By identifying and addressing these gaps, businesses can ensure a more seamless and satisfying customer experience. Just like the hypothetical elementary school, businesses must offer a complete and cohesive product lineup to keep customers engaged and loyal. Continuous improvement and strategic planning are key to avoiding product gaps and maintaining a competitive edge in the market.