The e-commerce market is gradually becoming more competitive. Online sellers like you may sometimes have to deal with unprofitable products. By identifying the underperforming products, you can take the necessary actions to thrive in the e-commerce world. Applying the right strategies at the right time can quickly maximise the utility of a product and improve your business.
Several signs can highlight products that are not being used to their full potential. Read this article to explore the key indicators of underperforming products and learn the best strategies to tackle such products and boost your business.
Spotting an Underperforming Product: Key Indicators
Here are some indicators of underperforming products:
Low Sales:
One of the most obvious indicators of an underperforming product is consistently low sales volume. If a product is not selling as expected or compared to other products in your inventory, it is considered underperforming. This could be due to various factors, such as poor product quality, ineffective marketing, or high pricing.
However, there are other reasons for low sales. They are:
- The product no longer meets the needs or preferences of your target market.
- The product is only available through a limited number of channels.
- There is strong competition for the product in the market.
High Return Rates:
Another indicator of underperformance can be a particularly high number of returns for any given product. Whenever several customers return the same product, something may be wrong. It may be a quality or a size issue, or it does not match the customers’ expectations. For instance, if most customers return the product because of size issues, giving a better sizing chart will benefit your business.
Other potential reasons for high return rates include:
- The images and information in the description are not close to the product.
- Delivery of a product in a damaged or defective state
- Customers feel mistreated by customer service personnel.
Negative Customer Feedback:
Customer’s low ratings depict a poor-performing product or service. Customers’ complaints are an indication that something is wrong with the product. It could be because of the quality of products or the kind of customer service they receive. Carefully analyse the customers’ issues. Find a solution to enhance the operation of the product to make your customers happy. For example, if the customers are complaining about the durability of a product, you need to enhance the quality of the materials used or the process of making it.
Additional factors that can contribute to negative customer feedback include:
- Customers do not get the help or support they require.
- Customers might be unhappy or dissatisfied if they have incorrect or misleading beliefs about either the product’s capacity (its capabilities or features) or the company’s innovation strategy (its approach to developing new or improved products.
- The product reaches the customer in a bad condition due to poor packaging.
Low Conversion Rates:
If a product has received a lot of page views but few visitors are making a purchase, the conversion rate is certainly low. This means that customers are looking at the product but are not willing to buy it. There might be numerous factors, such as high price, inadequate information about the product, or even poor experience while viewing the product. For example, customers use your company website to look for a specific product, and they cannot locate it easily, the site is too slow, or they must enter the same information repeatedly. You should work on enhancing your site’s architecture or categories.
Other factors that can contribute to low conversion rates include:
- Consumers do not want to go through a lengthy and confusing process to complete their orders.
- When you do not provide different payment options, it might be frustrating to a customer.
- Customers are not confident in your website or are not assured that their information will be safe.
Excess Inventory:
Another sign of poor performance is having a large stock that remains unsold to customers within a certain period. The product is not being sold as expected, which results in the use of more storage resources. The inventory levels of the products must be revised periodically. In this case, the cost, promotional strategies, and operations may require reconsideration to enhance the sale. For instance, if you have several units of a particular product that did not sell as anticipated, you may opt for discount selling.
Additional factors that can contribute to excess inventory include:
- When demand estimates are wrong.
- Implemented poor inventory management systems.
- Involved in the sale of products that are seasonal in nature.
How to Address and Improve an Underperforming Product?: 7 Strategies to Follow
- Analyse Product Data:
When evaluating your product’s performance, it is recommended to use detailed analysis of different indicators. This includes analysing sales data, conversion rate, customers’ feedback, and store stock. With these metrics, you can see emerging trends, specific patterns, and problems that need solving.
- Identify root causes: After using the performance data to evaluate your product, the next thing that should be done is to find the causes of the poor performance. These reasons could be – pricing, wrong description, no or wrong marketing, or improper quality. This way, specific approaches can be formulated to affect the problem and, consequently, increase the product’s effectiveness.
2. Re-evaluate Pricing:
Check your product’s selling price regularly. Conduct a competitor analysis and set your prices accordingly. This will assist in evaluating the right price to charge customers or whether lower prices are necessary to gain more customers.
- Adjust pricing strategy: If your product is too expensive compared to your competitors, you may be forced to reduce the price to increase demand. Alternatively, if your product is associated with higher quality or special features, you must promote it.
3. Enhance Product Descriptions:
For consumers to buy the products, you need to build their desire to make that purchase. You need to have attractive and informative descriptions of products.
Create a compelling copy by highlighting the features that set your product apart from the competition. Give them reasons to buy your product. Use simple and easy-to-understand words.
Use strong keywords related to your products in your product descriptions. This will help boost your search engine visibility. Find the keywords your audience uses. However, do not overdo the keywords; this is known as keyword spamming, and it will harm your rankings.
Visual storytelling will help make your products look more attractive to buyers and convey the message effectively. Choose pictures that depict your products most favourably. Consider making videos showing how potential customers can use your products or their exclusive features.
4. Improve Product Imagery
Customers highly depend on the product’s images and videos. Hiring professional photographers to create high-quality products photographs for your website can significantly help. Use good lighting and aesthetic backgrounds to make your product look more attractive. Taking pictures from multiple angles of the product will assist customers in gaining a better understanding.
5. Optimizing Product Placement
To promote your underperforming product and boost its sales, strategically place it on your website. This may be the homepage, the category pages, or any other section relevant to the product line. When you place the product strategically, customers are more likely to notice it and buy it.
Introduce underperforming products to customers to boost their sales. This is done by recommending them under “other related products.” For instance, if you are selling a smartphone, you may also suggest the buyer purchase a case or a screen protector. This can add value to the primary product and offer a way to promote your poor-performing products.
6. Revamp Marketing Efforts:
Design promotional activities for the specific product that fails to perform well. This can include email marketing, paid advertisements on social media platforms, and content marketing. Such targeted campaigns can enhance awareness and lead to the sale of the product.
Use social media platforms for product promotion. Develop engaging content that will stir some reaction and advertise the product. Ask your viewers to post pictures or videos of themselves using the product to create hype and demand for the specific product.
Collaborate with ‘influencers’ who have a large following. They can help market the product to their followers and improve the brand’s popularity.
Many people might not know about your product’s existence, so it remains underutilised. Sales are likely to go up by bringing it to attention on your website, selling it on other online retailers, and doing everything possible to popularise it through marketing strategies.
7. Offering Promotions and Discounts to Boost Sales
Limited-time offers create a sense of urgency. It can be a great way of persuading people to make the purchase. Slice the price temporarily on your underperforming product to force sales.
You can bundle your poor-selling product with the bestsellers. If you want to see an overall improvement in the business, you should introduce bundle deals that will force customers to buy the product. Mobile push notifications can be an excellent way to alert customers about these limited-time deals and bundled offers instantly. With timely and targeted notifications, you can maximize engagement and drive quicker decision-making. This also helps in overstock clearance and a chance to refresh your product line.
Conclusion
By considering the above strategies, you will be better placed to deal with poor-performing products and increase the overall business profitability. Remember that evaluating and modifying your product marketing strategy is an ongoing task. Customer feedback is one of the most effective ways of enhancing the quality of the products and services offered to customers. Regularly ask your customers for feedback through surveys, reviews, or social media accounts. This will assist you to know their needs and preferences. Track the sales of your underperforming products after taking all the necessary actions.
