In order to survive in the current market, it’s not enough to have a killer product.
In order to survive in the current market, it’s not enough to have a killer product. That’s why many companies are developing whole ecosystems of interconnected products that bring more value to the customers.
Product ecosystems might be the next big thing, and many companies have already started building ones. Today, we’ll figure out what exactly a product ecosystem is and why customers are more likely to join them. Besides, we’ll speak about how to develop a successful ecosystem of your own based on real-life examples.
What is the difference between a product and an ecosystem?
We are all used to the concept of a single product. Any product company is focused on selling one item to as many customers as possible to maximize their profit. They also aim to complete the deal at the best price for higher margins. And even though this system has worked for centuries, it might not be the most efficient one.
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In recent years, product ecosystems have started to replace single-product companies. And it’s no surprise since such ecosystems are much more efficient and popular among end-users.
A product ecosystem is a complex of various interconnected products that complement each other and, thus, provide more value to the customer. Such a business model aims to simplify the lives of end-users and, of course, generate more revenue for the business.
What are the benefits of an ecosystem?
The essence of any product ecosystem is the interconnection of various elements – networks, services, applications, physical objects, etc. This enables faster development of each particular product and an ecosystem as a whole, increasing its chances for survival. Besides, this helps the company attract a wider audience and retain customers.
The overall picture is pretty simple: provide more high-quality products – get more customers – help them use more products – retain them as a part of an ecosystem. Yet, what are the specific benefits of such a business model?
First, a product ecosystem aims to cover all the needs of its customers in a particular industry. This way, the company prevents users from choosing other products sold by competitors and improves their loyalty and engagement.
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Second, interconnected products bring more value to the end-user since they complement each other in a way no other brands could. This makes the whole ecosystem more potent and attractive.
Third, offering a wide range of products or services in a certain industry helps the company build its credibility, improve brand image, and become an impactful player in the market.
Fourth, after developing and supporting a couple of products, the company gets a grip of the process and might deploy new products much easier and faster. Product updates and general improvement takes less time and effort, too.
Fifth, every new product in the ecosystem means more customers and higher revenue, which is one of the ultimate goals of any business.