5 Steps to a Strategic Product Catalog

Your product catalog serves as the foundational representation of everything that your organization does. Having a clean product catalog is important so customers can intuitively find what they want. Plus, a good product catalog helps your sales team can spend less time searching for the right product or tailoring configurations, pricing is more consistent, integrations with ERP, inventory and other systems are simplified, and analytics on product performance are accurate to better inform product development and marketing initiatives.

That’s a lot! At CLD, we encounter an increasing number of client product catalogs with unnecessary complexity. This typically indicates uncoordinated or constrained decisions not aligned with good product catalog hygiene. As more businesses seek to employ AI, it is all the more crucial that the underlying source data is accurate and of good quality to maximize expected benefits. 

In this article, we explore the main causes for product proliferation in organizations, indicators that your product catalog might need attention, and how to approach a product cleanup initiative.  

What causes a product catalog to grow uncontrollably? 

Before discussing what to do or how to identify a potential issue with your product catalog, it is important to understand why proliferation happens. Several factors contribute to unmanaged growth: 

1. Lack of governance: If we had to choose just one contributing factor for product proliferation, this would be it! Without clear processes for governing product creation and retirement, catalogs can quickly become overly complex and out of control. 
2. CPQ tool constraints: Hand in hand with a lack of governance, we find that CPQ tool limitations or ineffective implementations also directly contribute to product proliferation. Limited or misapplied configuration capabilities, a weak rules engine, and manual quote processing often result in the need to create “one-off” products to meet business needs. Without the proper CPQ tool, often the product is the only “place” to put all the attributes related to what’s being sold. With the right CPQ tool that leverages a product catalog and structure aligned with the business needs, the product is centered on what is truly being sold, while the CPQ tool handles all the other attributes and configurations. 
3. Disconnected product teams: Some business units or regional teams operate in silos within an organization. This results in products that potentially overlap or that are not standardized due to the lack of centralized coordination and management.  
4. Finance-driven organizations: Organizations where finance requirements drive the product catalog definition often result in a product catalog that doesn’t truly represent what or how the organization sells.
5. Mergers & Acquisitions (M&A): Product catalogs are simply merged during the M&A process rather than evaluated to identify and eliminate inconsistencies and duplication. 

Troubling Indicators

It’s best to stay ahead of product proliferation. However sometimes, its happens faster than organizations realize. Watch for these warning signs when assessing if the product catalog aligns with current needs:

1. Mix and match of products with attributes: A product should represent what is being sold. It should not represent where it is delivered, who will deliver it, the role, shape, form, size, number of units, term, level, etc. It is simply the “thing” that is being sold. Although required in a quote, any other attribute should not live in your product catalog. 
2. Inability or increased complexity in associating roles and effort with existing products: This alone should be an early warning for service organizations. When the product catalog is unnecessarily extensive, repetitive, inconsistent, or ambiguous, it is hard to associate roles and effort with a particular product. This information is foundational for demand and capacity analysis, and a solid product catalog paired with the right services quoting tool like PSQuote is a must for services organizations.
3. Regional duplication: Product names should not include the region. If you need to control the availability of a product based on region, your CPQ tool is the right place to do so with qualified/disqualified rules. The product should not determine regional attributes. 
4.  Reporting challenges: This is a common early sign that your product catalog needs attention, often manifested by the difficulty of producing clear reports on product performance across categories or difficulty answering C-level questions.
5. Increased time to create quotes: Sales teams are spending a lot of time finding it hard to create quotes. 
6. Poor CPQ performance: Slow load times, timeouts, or consistent errors in the CPQ tool might indicate that the product catalog has grown too big. Note, there may be other contributing factors, i.e., it is not an exclusive indicator, but still should not be ignored. 

5 Actionable Steps to a Cleaner Product Catalog

Okay. You determined that your product catalog needs cleaned up. Plus you’re trying to stay ahead of AI…so what do you do now? Congratulations! You’ve taken the most important step: acknowledging that you have a problem. Here’s 5 steps to a more strategic product catalog.

1. Establish Governance
2. Conduct a Thorough Product Audit
3. Define a Product Rationalization Framework
4. Revisit the Technical CPQ Solution
5. Communicate Guidance to Teams and Users

Step 1: Establish Governance

Remember, governance is key. We put it at the top of our list of contributing factors because, without it, even if your organization cleans up your product catalog, you are likely to find yourself facing the same situation again in no time. Governance is a must. Without the right governance, individual teams can continue to add and modify products to optimize for their immediate needs. This could make the catalog inefficient for the overall organization. 

Proper governance ensures strategic alignment between new products and overall business strategy. It establishes the authority of who can create, modify, or retire products. Proper governance also implements consistent processes for product addition requests, gives cross-functional visibility, and creates accountability for maintaining catalog health with specific metrics and responsibilities. This includes a quarterly or bi-annual catalog review process and a regular health check to ensure that the process is still supporting the organization. Remember, product catalog management isn’t a one-time effort!

Step 2: Conduct a Thorough Product Audit

Once you have the right governance process in place, the next step is to conduct a thorough product audit. Before you can fix the problem, you need to know what the problem looks like! Review the current product catalog to identify:

• duplicate/redundant products
• obsolete products
• underperforming products

Analyze sales/order data, frequency, and performance to separate strategic products from those that exist as one-off exceptions. This exercise often reveals hidden inefficiencies and low-value clutter that’s been quietly accumulating over the years.

Step 3: Define a Product Rationalization Framework

As a third step, define a product rationalization framework. Not every product needs to stay, but the decision to keep, merge, or retire should follow a consistent, objective process. Define criteria for product viability based on factors like sales volume, profitability, strategic importance, customer demand, and operational complexity. Use this framework to make tough but necessary decisions to avoid convenient, emotion-based product management.

Step 4: Revisit the Technical CPQ Solution

Fourth, be willing to revisit your CPQ solution. The right CPQ tool (and configuration) provides a solid foundation for establishing and enforcing good product catalog discipline. 

• Ensure your CPQ platform is able to effectively manage product configurations, pricing, and regional rules outside of the product record itself. This prevents the need for one-off product variants created just to meet quote requirements. 
• Invest time in CPQ optimization alongside your catalog cleanup to maximize long-term benefits. 
• Consider a full quote-to-cash solution like Salesforce Revenue Cloud if your processes involve complex pricing, orchestrated order fulfillment, usage-based products, or you find yourself navigating disconnected applications.  (Learn about the Salesforce Revenue Cloud Selling Model)
• If you are in a services organization, use a robust services quoting tool like PSQuote on Salesforce to set a solid foundation for capacity and demand analysis and downstream services delivery activities, either as a standalone tool or in combination with your product-oriented CPQ tool such as Salesforce CPQ or Salesforce Revenue Cloud Advanced (RCA). 

Step 5. Communicate Guidance to Teams and Users

The last but equally important step is to communicate and train. You will be better able to maintain a healthy product catalog if people understand how to use it properly. Provide clear guidance to sales, operations, and product teams. Explain how the catalog is structured, where product attributes live, and how to request new products. Transparency around the governance process builds trust and reduces the likelihood of workarounds that can unravel your efforts.

Final words

Product proliferation is almost inevitable in fast-moving, customer-driven, and growth-focused organizations. However, ignoring the issue will not solve it. With the right governance framework, supported by modern CPQ tools and a cross-functional commitment to catalog discipline, organizations can regain control.  

A clean, strategic product catalog isn’t just operational hygiene: it’s a competitive advantage. As AI and advanced analytics increasingly shape business decisions, it becomes critical for organizations to not treat their product catalog as a dumping ground of legacy decisions. Instead, the product catalog should be a carefully curated asset that reflects and drives business strategy. The right CPQ tool on top of it sets organizations up for success and best positioned for the future.