The term “product ecosystem” has been coined by the guys over at Dent Global – they are a world leader in helping small and medium businesses to scale up and stand out.
In their book Key Person Of Influence (you can pick up a free PDF copy here), Daniel Priestley explains how businesses can use their product ecosystem to scale and serve huge numbers of clients at any level; and, more importantly, how to lead more customers towards their core products.
Which is pretty much what all us small business guys want to do, right?
The design is pretty simple: Each business should have three broad groups of products: free, products for prospects, and a core product.
Whenever I first mention giving stuff away for free, most business owners cringe. And rightly so. Let’s face it, no matter what reason you had for going into business, I’m pretty sure it’s a safe bet that no-one reading this went in with the desire to not make money.
But here’s the thing about these free products; they aren’t an expense, they’re an investment.
And it’s a very important difference.
An expense is a cost that can not be recovered – a necessary evil, so to speak.
An investment is a strategic move that may cost you short term but will give you a return.
Free products are an investment into your customer.
They were never meant to make money. Free products are all about building your relationship and trust with your customer – a trusting customer comes back often, happily pays full price, and tells their friends all about you.
Products for prospects
Product with a small to a medium price that helps to build trust even further with your customers. These are usually designed to help your customers better understand what you do, while still giving them a “quick win”.
While these products can make money, chances are the margins are not huge. This usually means that your products for prospects (P4P) should be easily and affordably reproducible so that you are able to sell them at scale. Digital products are a great way to go here, but products that actually cost you time to sell and produce are going to shoot a hole in the hull of your business.
This is where the money is. And, more importantly, this is what you love to do. Your core product is the endgame – where you want your best customers to be, and where you work only with people who make you excited to be there.
Typically speaking, your core product is the expensive side of the spectrum; it has to be! Because this is where you make money, and get results. Whatever your “game” is in business should be delivered completely in your core product. It’s not necessarily meant for everyone – because not everybody is willing to pay a premium price for a premium service. And that’s fine. Because the margins are such that you can afford only to work with the best of your customers.
Tie it together
If you have free products, products for prospects, and core products; you have a bunch of products.
If you have free products that lead into products for prospects, which lead into core products; you have a product ecosystem.
They have to make sense. So take the time to map it out, and see what your business can REALLY offer.