February 12, 2024

Defining Winners

My thinking evolved a lot over the past decade. These days, to me, "Winners" or "Winning Items" are items that represent the top half of annual sales (or in many of my projects, I calculate winning items on a daily basis). In other cases, I just grade the top 20% (sales) of items as "A", next 20% as "B", next 20% as "C", next 20% as "D", and the remaining 20% (which is often 60% of items) as "F".

In one project, there were about 2,600 winners out of 72,000 items sold in the past year. In other words, 2,600 out of 72,000 items accounted for half of annual sales.

And so it goes with most of the brands we manage. Apple has the iPhone, then generates less sales from Macs and Watches and Airpods etc. The iPhone is the Winner.

Winners (and sales of most items, for that matter) follow a law of diminishing returns. You can't just keep expanding your assortment and expect sales to grow linearly.

All of us eventually max out our assortment. We do not come up with creative solutions, and our ability to grow via product ends. This is where marketers are called into the equation. Marketers help in two different ways.

  • New Markets/Channels.
  • Improved Perception of the Brand.

Modern marketers could help in a third way.
  • Developing new/existing items into winning items.

Modern marketers work hard to develop customers.

Modern marketers have time to develop winners as well.

Winning items generate the profit that pays our salaries, bonuses, health insurance, 401k, you name it, they're responsible for it. When we have more winning items, we have more of the things we need to be successful.

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