Posted by & filed under Uncategorized.

One of the worst mistakes any company can make is fracturing their product line in the vain hope of attracting and capturing new audience segments. Doing so almost inevitably causes both the company and the company’s customers to lose sight of the company’s strengths.

One of the ways you can fracture a product line is to treat every SKU in your corporate database as an individual product, give each one a unique name, and use those unique names in the design of your advertising.

 

Example #1: Apple, Before the Jobsian Restoration

Between 1992 and 1996, Apple fielded no less than seventy-five different computers across fourteen product lines. Some of these allegedly different computers differed only in the bundled software. Others, in different product lines, differed only in the nameplate on the front.

Confusion reigned supreme. It nearly killed the company.

Upon his return, Steve Jobs started pruning product SKUs as fast as possible, and by 1998, he’d famously pared Apple down to a 2×2 product matrix. Laptop versus desktop on one axis, consumer vs pro on the other. Four products. (Three actually, because they weren’t ready to unveil the iBook yet.)

Now, the real magic behind this maneuver wasn’t that Apple settled on four products. It was that Apple stopped attaching dozens of meaningless product names to different configurations of the same computer.

Customers could still order different configurations, which in turn would be recorded under different SKUs, but nobody bothered to apply a grandiose name to each configuration.

 

Example 2: An American Mobile Carrier, Après le Déluge

One and only one of our ‘Big 4′ mobile phone carriers presents its phone plans as monolithic and utterly confusing conglomerations of features. In order to get something close to your desired plan features, you have to compare 19 named plans (including a new one that beats the other 18 like a drum…until you read the fine print on its limited ‘Unlimited’ data cap).

Some plans offering NO high-speed data cost the same as those with a low amount of data. Some two-line family plans with shared minutes cost more than two individual unlimited-minute plans with the same ‘unlimited’ limited data allowance. (I’m tempted to think that this kind of insanity is intended to drive shoppers to choose costlier plans that don’t have these fairly obvious inequities.)

Meanwhile, all the other mobile carriers sell three to five plans differentiated only by minutes of talk time, treating text messaging and data plans as a la carte add-ons. No bundling, no unwanted features, and only mild confusion.

And soon, the US line of national mobile carriers will be reduced from 4 to 3, thereby solving the problem.

 The Lesson

Sell the razor. The blades will take care of themselves.

Leave a Reply

  • (will not be published)