Home' Border Enterprise : Summer-Autumn 2011-2012 Contents enterprise
Vol 5. Summer/Autumn
EVEN Google has misfires. The
search giant is killing off Google
Desktop and Blogger, among 10
underachieving apps, in a purge tech
journal Techcrunch describes as a
But Google's ruthless focus may merit
respect. It is so easy to go into denial about
a dud and keep it on for sentimental reasons
-- a really bad idea now. According to credit
agency Dun & Bradstreet, business failures in
Australia rose 12.1 per cent in the June quarter,
compared to a 4.1 per cent rise in the previous
quarter, with businesses stretched by the high
Australian dollar and high interest rates.
Here's some intel on when it is time to be
tough and stop selling lemons.
Swing the scythe: five telltale signs
you should murder a product
1. Cool customers
Customer feedback is the first clue that a
product could be "a fail", says business advisor
Customer feedback -- demand - is what drives
the market. If you are getting poor feedback
from customers early on, then this is a sign that
you need to kill that product.
Remember that the feedback might go
beyond spoken words. Body language when
customers look at stock could count. If a
customer picks up a garment, say, and screws
her nose up, that is a bad sign. If droves of
customers then pick it up, try it on, even buy but
then return it, you know that you have a lemon.
2. Stagnant stock
It sounds like an obvious area to scrutinise, but
many businesses fail to track their financials or
sales daily or weekly, says Callaughan.
If you have stock on the floor that you can see
shrinking every day, you know that product is
selling well and in demand.
If the stock pile is stagnant, you should also
recognise what that means. Be realistic.
3. Lousy sales
This point also sounds simple, but
businesspeople are optimists by nature and
loath to kill what they think should be successful,
says enterprise analyst Paul Wallbank, also the
author of eBu$iness.
"Often they ignore what the market is telling
them -- that this product is a dog," Wallbank
adds. "If the phones aren't ringing or the lines
aren't selling then it's time to kill that product
and move on."
4. Time sink
A product or service might be selling, but if
takes up too much management time then it
has to go, Wallbank says. As with everything in
business, he adds, the 80/20 rule applies. If 80
per cent of your time is spent on a product that
only brings in 20 per cent of your profits, then
you need to drop that line, whatever the reason.
The reason might well be hassle from
customers instead of the product itself.
When Wallbank ran a computer repair
service, he had to drop selling laptops because
customers were sucking up all his time asking
questions about complex specifications.
"We had no problem selling the things, it just
took us a day to sell each one, which made it
uneconomic and distracted us from doing more
profitable work," he says.
5. Miles behind
Failure to meet objectives is probably part of
Google's reasoning for dropping products,
Wallbank says. If you expected a product to
reach certain milestones in a given time and it
has failed to, then that line may well not be a fit
with your customers.
By focusing on what works, you can maximise
your return on time and capital investment in
- David Wilson
Spot the lemon ... a lack of
customer interest is one clear
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