As America confronts a chaotic resurgence of the COVID-19 outbreak, people are desperately seeking indicators of the latest wave abating. The end of the pandemic, while not necessarily near, can at least be better understood today. On May 10, the New York Times ran “How Pandemics End”, a piece relaying the perspective of epidemiologists and others on the ultimate fate of worldwide breakouts. In short, an effective treatment will be developed, marking the “medical” end of the pandemic, and sometime prior, the pandemic will reach a “social” end as people fight out from under the shadow of existential dread Covid-19 has cast across the country.
What arguably should be included is also the “economic” end of a pandemic. A prolonged recession is already underway. We last looked at the recession’s impact on the industry while laying out four rules of marketing in times of uncertainty. The flip side of that same coin applies to product strategy. As the cannabis industry records all-time highs in sales, a nagging sense of uncertainty persists. Strategists should reexamine product strategy carefully without getting too caught up in the latest sales peaks.
Guiding Product Strategy In Uncertain Times
I. Revitalize or Retire
Challenging times force tighter scrutiny of costs and profits. A chaotic economy can act as a forcing function, a dynamic that should be embraced. Products in a brand’s portfolio may no longer make financial sense for the company. For service providers, for example, this might be found in overly complicated packages of monthly minimums, FTE shares, hourly support costs, and other moving parts that would be simpler to manage if streamlined. Doing so can be positioned as proactive cost-containment – which must be true as clients should stand to realize some financial benefit in the realigned service model. Equipment providers might find opportunities by introducing more modular systems and other means to keep a lower-priced offering available to customers. Finding means to keep clients on the roster can pay dividends as the economy improves. Compared to the cost of winning back an account, short-term sacrifices might feel more palatable.
For the remainder of the portfolio, offerings that have languished – often products longer in the tooth – can get a fresh look. For example, consumer brands might find that certain products aren’t adding enough to the portfolio. Typically, laggards can be found among under-performing varieties or pack sizes. In the cannabis industry, other factors will come into play as well, such as THC:CBD ratios, dosage, terpene profile, and other variables that might have seemed important but now look to be thrown together into too many combinations. Thus, the success of a few core products among a proliferation of gummy varieties could have covered up for the low incrementality of each additional launch. Armed with historical data and consumer insights, research firms can help determine the impact of redesigning or re-staging a product portfolio.
II. Research, research, research
Research should underpin an evaluation of the current portfolio of products and services and enable a constant watch on how customers are reacting to the new normal. Tools like brand tracking studies can monitor a brand’s visibility and health in the eyes of the current and potential customer base while satisfaction surveys can inform product managers and customer service. ROI should be the seventh “R” in this discussion because every dollar spent on market research – particularly in cannabis, where the research practices common elsewhere are still taking hold – needs to justified. The more research providers can do upfront to collaboratively design a project and document its scope, the more likely the final deliverable will align with the client’s expectations. Done properly, well-defined research projects can save costs and fuel the success of new company initiatives and pivots in the product portfolio.
III. Reinvest in Innovation
As we have talked about previously in this space, (under “Rule Four: See the Opportunity”, here) maintaining a hyper focus on core customers will prevent the company from straying too far afield during a time when challenges will threaten to derail business strategy. Not only that, but doing so might also lead to opportunities for innovation. What other products and services are your customers purchasing? Ask why your solution needs to exist and what, lacking your solution, customers might do instead. Is there an opportunity to differentiate in a path to purchase that might otherwise be driven only by price? Times of upheaval disrupt decision-making processes as well. What might have once been an unchallenged line item in a company budget or a routine product in a shopping basket could be displaced by a competing offering a customer might have overlooked in more predictable times.
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