Minimized Appliance Product Line,

MAXIMIZED SUCCESSHow limiting your hardware appliance product line can increase revenue, decrease costs, and protect the quality of your product.

Why you need this guide

but your unwieldy product line is getting in the way of reaching your sales and growth goals. You started out tailoring orders to customers’ exact software and hardware needs to win their business, but now you’re finding it di�cult to keep up with and support a multitude of custom platform orders, or you don’t receive enough benefit from doing so, or its a�ecting your product’s quality. It’s time to limit your product

You’re building a successful software company,choice to maintain a profitable growth plan. No, really, it is. Afraid? Think you won’t get as much business with a limited product line? You’re wrong. (Yeah, we said it.) Stick with us over the next few pages to see how o�ering a refined, limited product line is actually better for your customers and your business.

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The proof’s in the pudding.

Too many choices can overwhelm and lead to fewer sales. Barry Schwartz described this as “the paradox of choice,” stating that while choice is necessary, when it becomes too abundant it begins to debilitate, and customers become unable to choose.

Maybe you’ve heard of paralysis by analysis; in customers’ e�orts to make sure they receive the bigger, better deal, it leads to a delayed decision—if a decision is made at all—because the anticipation that something better might come along keeps them perpetually in the decision-making process rather than moving forward and committing to one.

Research shows giving too many choices leads to fewer salesOr, if a choice is made, customers end up less satisfied with it than they would have been if they had had fewer options. Schwartz says this is because it's easy to imagine making a di�erent choice that could have been better. The feeling of regret subtracts from our satisfaction: the more options there are, the easier it is to regret the one we choose.

O�ering an abundance of hardware appliance options may not make customers as happy as one would expect. In fact, they may end up with buyer’s remorse, regretting their decision as they compare it with other options they could have had. And, it can significantly slow down the sales cycle.

A 2006 Bain study also suggested that reducing complexity and narrowing choice can boost

revenues by up to 40% and cut costs by 10-35%.And it can double growth.

revenue costs growth

A couple of numbers to consider to understand how your customers make buying decisions.In one landmark experiment conducted in an upscale grocery store in California, Sheena S. Iyengar, a Professor of Business at Columbia University, sheds light on how too many options impact the buying decision. Researchers set up a sampling table with an array of 24 di�erent jams to taste; on a di�erent day they displayed just six. Shoppers who took part in the sampling were rewarded with a discount voucher to buy any jam of the same brand in the store.

Here are the results:During the showing of 24 jams, 60% of bypassers stopped at the table.During the showing of 6 jams, only 40% of bypassers stopped at the table.

A strong case that the more options, the more initial attraction. Here, however, is the interesting part:Of the 60% that stopped to view the 24 jams, only 3% subsequently made a purchase.Of the 40% that stopped at the table showing 6 jams, 30% made a purchase.

Customers initially exposed to limited choices are substantially more likely to make a purchase. In this case, 10X the amount.

Driving it home: Why limiting choice worksThe positive impact of a well defined product line

40% STOPPED TO SHOP60% STOPPED TO SHOP

RATE OF PURCHASE

VS

30%3%

24JAMS

6JAMS

When you look at the most successful software companies, meaning those with a strong growth trajectory, one of the things they have in common is a logical and well thought out product o�ering. It has purposefully defined limits. But often, they don’t start out this way. Far from it.

Many beginning software companies are in growth mode, bending over backwards to o�er customers unlimited choices, meaning every plausible hardware configuration. (Sound familiar?) Choice isn’t just good, it’s great for luring customers away from the competition! But when a company has reached an inflection point in its growth, the viability of a limitless product model becomes an obstacle to continuing to scale and grow.

The companies that advance and find success have usually made two pivotal maneuvers: streamlining their product o�ering and defining where choice belongs in their portfolio.

So to be more successful,limit your product line.

-Maintaining a broad but not deep supply chainwhich limits the opportunity to leverage volume-based discounts.

-Managing an unwieldy product matrixthat complicates sales e�orts and can lower quality.

-Delivering an inconsistent look and feelacross your product line that impacts your ability to build a brand identity.

-Needing to wait on product to be custom built before it can be shipped, which in some markets can impact sales e�orts when competitors ship faster.

-Tying up cash in inventoryto hold a wide range of pre-built inventory that ensures fast delivery, but leaves little for necessary investments.

Is your business experiencing any of the above implications as a result of the size of your product line? As counterintuitive as it may be, o�ering a large product mix may not be as beneficial and profitable as it may seem.

The struggle is real.

The negatives to not limiting your product lineSome struggle with paring down product lines, but not making this transition can have negative implications, such as:

Get on the right track to more sales and fewer costs.Okay, you get it. You need to limit your product line to increase your business. But how do you start?

Rules to go byto minimize your product line

-Follow the 80/20 rule.Find the configurations that represent the bulk of your sales and strip away most of the outliers. A few at the high and low end of your product mix may be warranted to o�er scalability, but not a dozen.

-Identify common ground.Areas of your product line can often be consolidated to a standard base platform (chassis, motherboard, power supply), with product variants based on a smaller subset of parts (drives, memory or CPU).

-“Condition for complexity.”Let the first decision be one of fewer categories and options than the ones that follow, because it makes people more likely to participate in ongoing decisions.

-Don’t go it alone.Work with a seasoned hardware platform development team that can help you manage and maximize the variations. They should have the ability to inventory base configurations and perform final assembly to complete the build to specifications.

it pays to take a look at your current product line, and MBX can help. By analyzing your

software suite, we can evaluate your platforms to optimize performance on hardware while

consolidating the variety of components to simplify your bills of materials (BOMs).

And, if you need end user customization, we can handle it during configuration or final

assembly. We’ll make sure your customers feel a high sense of being catered to by

tailoring the end product to their needs, whether that means including a certain networking

card, adding additional RAM or hard drives, enabling di�erent software settings, or any

other final touches.

The end results? A finely tuned product o�ering that increases revenue, decreases costs,

simplifies your sales team’s objectives, shortens build time, and protects the quality levels

of your product. If you’re ready for these results, reach out to us at

(800) 560-1195 or hello@mbx.com

Shameless Plug before We’re Done:How MBX can help you minimize your product line and maximize your profits

Regardless of the stage your company is in,

Written By: Chris Tucker, VP of Customer Engagement, MBX Systems, linkedin.com/in/chrisjamestucker

Edited By: Liz Molli, Marketing Manager, MBX Systems, linkedin.com/in/lizmolliJessica Conte, Marketing Coordinator, MBX Systems, linkedin.com/in/jessicaconte

Designed by: Joel Wolter, Senior Creative Designer, MBX Systems, linkedin.com/pub/wolterjoel

MBX Leadership Team: Tom Crowley, Founder, CEO, MBX Systems, linkedin.com/pub/tomcrowley22Jill Bellak, President, MBX Systems, linkedin.com/pub/jillbellakLen Petty, CFO, MBX Systems, linkedin.com/pub/lenpettyJustin Formella, CIO, MBX Systems, linkedin.com/in/justinformella

Chris Tucker, VP of Customer Engagement, MBX Systems, linkedin.com/in/chrisjamestucker

Carl Nothnagel, VP of Operations, MBX Systems, linkedin.com/in/carlnothnagel

MBX Systems is a leading designer and manufacturer of application-optimized server appliances and cloud-ready solutions for ISVs and service providers worldwide. MBX delivers turnkey hardware systems that are 100% customized to the customer's specifications by in-house platform engineers, while also o�ering value-added services such as branding, software imaging, regulatory/compliance, global logistics and warranty support to relieve customers of all hardware responsibilities. That unusual range of services, along with award-winning quality, innovation and customer service, has attracted customers in more than 40 vertical industries in the past two decades.

For more information, visit www.mbx.com

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