Sunsetting a product

One of the hardest things PMs have to do is to sunset products.

Products may be sunset for a variety of reasons including

• Falling demand - Market trends and customer needs have changed, and the ROI target of maintaining a product is not met. This needs to be evaluated not just with direct revenue from the product line, but its importance in a bundle suite of products.
• Product performance - New technological developments necessitate evaluation if existing products can be enhanced or if it is better to build a new product altogether without the historical baggage. This decision should be done with cost/ benefit analysis but also customer transition, new workforce training etc.
• Regulatory changes - In some scenarios, regulatory changes lead to a product becoming defunct and sometimes overnight. The goal is to be always be on top of regulatory changes while they are being discussed and debated.
• Brand risk and strategic focus: A company may take a strategic decision to no longer offer solutions in a category and put together timelines for exiting the product line.

Sunsetting a product in the right way can win you customers for life.Doing it in the wrong way can lead to brand backlash, customer churn and hastily revisiting the decision.

Careful assessment of impact: This requires significant analysis of the user base and how this product adds value to their goals and jobs-to-be done.

• Assess revenue impact: Are there concentrations (even a small number)where this product adds an outsized value. Is this a differentiating feature? Sometimes a single feature for a very large client may need to be minimally supported and cause a churn. It is also important to understand if this feature helps in customer acquisition, and if ROI is low, a potential option would be to make it a paid feature.
• Assess legal obligations: This requires careful analysis of the contracts to understand what was promised and the legal implications of sunsetting the product. It will also help understand the timelines for phase-out - if the contracts are renewed every 2 years, then that's likely the timeframe to keep the product supported
• Brand risk - Is there a brand recognition tied to this feature. Anolder product of the company many have a better recall for the brand.While this may not be the reason, not to end of life, the transition will need to be coupled with other brand building/ association activities.
• Stakeholders impact - The impact assessment should include not just customers but also internal teams, partners and other stakeholders.

Providing alternatives: For the impacted customers, if a brand proactively offers alternatives by tying up with other providers or even communicating the alternatives, it helps the customers significantly to have a trusted solution without trying to scrabble to find something themselves.

Stakeholder communication: Phase-out of the products should be communicated well in advance for customers to make the necessary changes. For consumer products it can range from a few months, to even years in advance for Enterprise products.

Transition planning: This is the most important part of the change management

• If the company is providing alternate products, then the customers should be encouraged early on to try the new features and get familiar with them. This is also an excellent way to get feedback about the new product and ways to enhance it to make the change more compelling.
• Provide incentives for early adopters - Discounts and add-ons can help with early adopters and offering free of cost of migrations can help for enterprise clients
• Communicate Timelines: Communicate clear timelines when the product will cease to work well in advance and with more urgency as it becomes closer to the due date.
• Phase out operations: Gradually stop offering updates, customer service/ support and slowly ceasing operations.
• On-going monitoring throughout the process would be very important to ensure any adverse impacts are caught early on
• Feedback and learning - Reflection on the success (or gaps) of the process would be very important when planning for the future evolutions.

Finally, do ensure to celebrate with all the stakeholders for achieving a monumental task.

Having personally transitioned and sunset many products, the outcome is worth the effort. It not just enabled better utilization of resources, enables easy of development of new capabilities, keeps the product optimized but also can yield a much superior customer experience.

So fear not, venture forth and plan the product transition.

May the force be with you!