Strategic product diversification: the easiest way to quickly increase your LTV
Strategic product diversification
When you are using product diversification to increase your LTV, more does NOT equal better. I say strategic product diversification because on more than one occasion I’ve been pulled in to work with startups that were struggling with horrible LTV despite having more than 100 products in their catalog.
A great example of strategic product diversification is Smile Direct Club. The company that sells those teeth straightening kits dramatically increased their LTV with the addition of just a handful of items that are easy to inventory and easy to ship.
See the screenshots of their accessories page below.
- If you don’t know which additional perishable items you could offer to your customers on a more consistent basis, just send out an email to ask them “Hey, we are looking to add a few more items to our inventory. What could we add that would make shopping easier for you?”
- If you are not comfortable with asking them, you can also send out a survey like this one.
- Next, look for a strategic partner to drop ship those items so you can mitigate risk by testing things out before committing to holding an order of inventory.
- If you sell items that are more difficult to find a drop shipping supplier for, use something like Alibaba’s RFQ to get a manufacturer to make the new product for you (quick & easy). Google “Alibaba’s RFQ” to learn more.
- Read this guide if you are open to branching out to offer :
- excel models,
- memberships to communities,
- or SaaS.
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