One of the challenges that I saw when I got to Red Condor was that there was a LOT of Intellectual Property (IP) that had been developed. This IP was being deployed for a single task – Spam Filtering. I found this a challenge as the market
for Spam Filtering was very mature and commoditized. However, it seemed like that with a few tweaks much of the IP could be changed to do other things.
This is one of the battles that companies in technology have. When do you work on a feature of an existing product and when do you work on a new product? A better way to look at this is how are you spending your money on the portfolio of
offerings that you have. I will talk about what we did at Red Condor and then come back to the more general issue at hand and how to think about this.
In the case of Red Condor, we did both of course. We extended our current offering with new features and capabilities. This was true to overcome customer objections to purchasing the product and thus making Red Condor’s offerings more
competitive. With almost all products you will find that there are some features that each one has that other’s don’t and that was true with us. But for 12 months or so, we became focused on introducing new SKUs (Stock Keeping Unit) which
is a general way to refer to more items to sell. In our case, we wanted to take what we had already built and see if there were ways to change it or repackage it to meet the needs of different applications. We also found partner products that
we could combine with our IP to create a fuller offering.
In our case, we decided that there were two paths that we would play. The first was backup for failed mail servers also known as E-Mail Continuity. We discovered that this was a market for which competitors had products and that there were
even companies that did this as a primary business. We found a way to build this in as a capability without a large amount of work and we set up the system so that it was separately licensed. Our first customer for this product was an ISP
that was performing a technology migration in their E-mail system over the weekend. They used our SaaS Filtering service and enabled their customers to get their E-mail from Filtering Service while their other E-mail products were offline.
We were a bit nervous that our first live use would be done by such a large customer, but it all worked out. The second path was called E-Mail Encryption but internally we called it Secure Message Delivery. In this case, we were able to add
3rd party product in and add in capability to help customers with Secure E-mail for Corporate Compliance reasons.
In both cases, we were expecting to sell these products to existing Mail Filtering customers as an upsell. The point of this was to take our existing customers and sell a percentage of them additional services. Since they are existing
customers, the marketing costs would be lower than for new customers and we could up the value of a mailbox to Red Condor. We also thought a more complete offering might attract new customers, and we offered all these services as a
bundle. The bundle came at a substantial savings to the customer and that should attract folks to buy more products. The new products were very high margin (well the internally developed ones) so any purchases provided profit.
Now a lot of the issues you need to think about when creating new products were covered by our plans. Is the market the same as your existing one? How dilutive will the marketing and advertising of the new products be to your current
products? How competitive will your new products be? Who is an ideal customer for the new products? You can see by us using these primarily as upsells we limited our market, but also made the sales and marketing of these products
enhance the value of our current products.
So think about your product investments like investing in a portfolio of stocks and bonds. Do you have a good mix?
FocalPoint Business Coaching
Change Your Business – Change Your Life!
Business Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis