As a customer-focused business, you want to offer enough services to meet consumer demand. But offering too many services can be worse than not providing enough. When a company tries to cover every possible area, it results in too many choices, which has a paralyzing effect on people, according to a study conducted by Columbia University’s Sheena S. Iyenger. So, how do you know when it’s time to expand your services? Here’s three tips to help you decide.
I am blogging on behalf of Visa Business and received compensation for my time from Visa for sharing my views in this post, but the views expressed here are solely mine, not Visa’s. Visit http://facebook.com/visasmallbiz to take a look at the reinvented Facebook Page: Well Sourced by Visa Business. The Page serves as a space where small business owners can access educational resources, read success stories from other business owners, engage with peers, and find tips to help businesses run more efficiently. Every month, the Page will introduce a new theme that will focus on a topic important to a small business owner’s success. For additional tips and advice, and information about Visa’s small business solutions, follow @VisaSmallBiz and visit http://visa.com/business.
Is It Time to Expand Your Services? 3 Tips to Help You Decide
As a customer-focused business, you want to offer enough services to meet consumer demand. But offering too many services can be worse than not providing enough. When a company tries to cover every possible area, it results in too many choices, which has a paralyzing effect on people, according to a study conducted by Columbia University’s Sheena S. Iyenger.
For the study, Iyenger set up a booth in a supermarket and intermittently offered two options: a selection of 24 jams and a selection of only 6 jams. While the larger selection of jams lured more customers over, customers were found to be much more likely to buy when presented with a smaller selection. The researchers found that overall, customers like the concept of a large number of choices, but when confronted with a big selection, they tend to feel overwhelmed.
As your business grows, it could be tempting to expand your range of products or services. A hair salon may decide to add waxing options or a massage table in the back. A computer repair business might choose to provide in-home computer training. One addition to your service offerings likely won’t change your business model, but one addition can lead to another until eventually, you’ve expanded beyond what your customers can support. Here are three ways to determine if it’s time to add a service or two to your small business.
Can You Afford It?
Consider all of the costs associated with expanding, including hiring new workers, equipment or additional storage space required to support the expansion, and the time you’ll have to spend managing this additional offering. If this new area of your business will take time away from your other duties, can you afford to sacrifice that time?
Will Your Customers Support It?
If your customers are consistently requesting a service/product you don’t provide, it might be time to add that to your suite of offerings. If you haven’t received a specific request, market surveys can help you determine whether the local market will support it. Ask your own customers, as well as potential customers in the area. Create a survey on Survey Monkey and post it to your social media sites, asking others to forward it to their friends.
Is the Market Saturated?
In addition to creating surveys, you can also conduct research into the existing market for this new product or service. What competition will you have? Is the market for this new offering already saturated? Gauge your ability to attract customers and compete with any existing businesses before proceeding.
If you feel you’re stagnating, it might be time to review your original business model. A small boutique that provides only a few dozen products may feel as though it will never be able to grow. But instead of adding more items to your store, an online shop may be the best course of action. You’ll be able to reach a larger audience with the items you’ve already specialized in providing.
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