A very popular local restaurant offers over 600 varieties of soda pop. My guess is they probably only sell about 20% of those (A partially scientific guess, based on the time-honored 80/20 rule!). This suggests that the return on investment (ROI) on such a broad inventory might not be that high and that a pruning of the product line might be in order, with the goal of stocking only the best-selling, most profitable flavors.
On the other hand, how many customers visit just because they want to see a place that has 600 varieties of soda pop displayed in one spot? If the 600 varieties of pop are what brought the customer through the doors in the first place, they become less relevant as an inventory or product mix offering and more so as an overall marketing investment! So there is a payoff, but exactly how to quantify that payoff is often another story. But I’ll bet in their case it’s huge, and deservedly so because this is a great restaurant!
Marketers hate math not because they’re not smart, but because really, really figuring what the exact return on investment is can be a really, really big headache. I’d suggest that a better idea is to constantly listen to our customers and constantly watch the bottom line. If we have happy customers and we have profits, that’s the kind of win-win VALUE marketing should provide.
The art of being wise is the art of knowing what to overlook.” – William James, Psychologist and Philosopher