Almost all products eventually reach their natural end-of-life. So it becomes product’s job to take them through the phase-out or sunsetting process. The coroner’s report on a retired product might list any number of causes of death. But your typical end-of-life product reaches this point for a few reasons:
- The product is no longer generating enough revenue to support the costs of maintaining it.
- The company no longer wants to be in that specific market.
- The company has developed a better solution.
Unfortunately, the scenarios above are never going to be as clear-cut in your organization as they appear in those sentences. An alarm bell won’t ding on your computer the moment one of your products stops generating enough revenue. And even if you do determine conclusively it’s time to sunset your product, the end-of-life process is complicated. Sunsetting products or features requires a lot of strategic planning to avoid disruption within your organization.
So, if you think it might be time to sunset one of your products or features, here’s a basic checklist to follow during the process. We’ve divided the end-of-life process up into three phases.
- Phase 1: Deciding when to sunset a product
- Phase 2: Getting buy-in on your decision to end-of-life a product
- Phase 3: Planning and communicating an end-of-life plan for a product
Phase 1: When is it time to end-of-life a product?
It would be ideal if there were an end-of-life algorithm for products, where you could simply plug in some numbers and—bang—out popped the correct answer. “Yes, it makes strategic sense to end-of-life this product.” (Or, “No, this product has another year of useful life.”)
Unfortunately, that algorithm doesn’t exist. And there is no simple formula to tell you definitively whether or not it’s time to retire your product. Knowing whether a product has reached its end-of-life is equal parts art and science.
That said, try to plug in as much science as possible. Start by doing an assessment of what the product is costing you, how much it’s earning, what the revenue trend looks like, etc. In other words, start this assessment with a few big questions.
1. How is the product performing right now?
Figure out how well the product has been selling over the recent past, and then step back and do a broader assessment to see the sales curve for the product over a longer timeframe.
If you chart this out and find a consistent downward curve for the product’s new customer acquisitions, seat licenses, maintenance agreements, or other revenue metrics that matter to your company, you might be right that it’s time to think about end-of-life.
Here’s something else you’ll want to add to the equation: To what degree is the product “in-flight” with your sales team? In other words, how many units of your product are listed on current sales invoices? And how many would your reps say they’re in the process of closing?
This should be factored into your decision because perhaps what you’re seeing is not a product whose useful life has ended, but simply one that’s been in a slump and could see a surge in revenue in the near-term.
2. How many development resources does the product consume?
Now that you have some idea of how the product is performing in terms of revenue generation and new customer acquisition, it’s time to start measuring this against what it’s actually costing your organization to maintain the product.
First, you should investigate how many development hours your teams are devoting to this product. That goes for updates, patches, bug fixes, testing, and general maintenance. And then…
3. How much effort from support does the product require?
Next, you should do a similar investigation into how much the product in question is costing your company. Consider things like customer support time and resources.
It stands to reason that if your product is nearing end-of-life, it’s likely to have amassed more baggage than your newer solutions. That means the product might be responsible for a higher proportion of customer complaints and requests for help.
4. Calculate the value of the resources you could unlock by re-deploying these resources onto more profitable products.
Now that you have some broad data about your product’s dollar inflows and outflows, you can begin to think about resource reallocation. By retiring the product, you can redirect resources onto more profitable initiatives.
Remember, this is part art, part science. But if your intuition is telling you it’s time to end-of-life a product, these exercises above can help you infuse data into your decision.
5. Pro tip: Develop an end-of-life product roadmap.
You can build a roadmap specifically to strategically think through and map out your plan for taking your product through the end-of-life process.
If you have the right roadmapping app, you can use it not only to create a specific plan for your end-of-life product but also to help you determine whether or not retiring the product is the right move in the first place.
That’s because this app will allow you to plug in all of the factors we’ve been discussing, and apply a weighted score to each one. This can help give you the full picture of how your end-of-life decision could benefit your organization (freed-up resources) or create risks (unhappy customers), and how much each of those factors should weigh on your decision.
Phase 2: Get approval for your end-of-life plan.
6. Discuss the issue with stakeholders.
Retiring a product is not product management’s call alone. This is an important strategic decision that could affect many other departments. Therefore it should involve other members of your organization, particularly your executive staff.
And now that you’ve done the work of building a case based on evidence—and not just your gut—you can take your data-supported proposal to end-of-life your product to your executive stakeholders.
By the way, by developing an end-of-life product roadmap and using a roadmap app that includes weighted-scoring capability, you’ll see some benefits when it comes to presentation. You can make your case much more effectively to executive stakeholders if you can bring up a clean, visual summary of your proposal and your strategic thinking behind it.
Phase 3: Plan and communicate your end-of-life plan.
7. Work with your sales team.
So you’ve persuaded your executive team to give you the go-ahead with your plan to end-of-life your product. Now you’ll need to discuss the issue with your sales team.
You’ll want to discuss how this will affect their sales presentations and help them find alternatives to steer prospects toward in the future.
8. Tell your existing customers.
Communicating with customers about a product phase-out is one of the most important steps in the end-of-life process. And, it’s a step many organizations get wrong. You want to give your customers plenty of warning. Don’t make them feel like the tool they’re using is being suddenly ripped out from under them.
You’ll also want to have alternative solutions to suggest to these users. Perhaps a swap or perhaps a newer and more robust alternative you’ve since developed.
Depending on the size of your organization and your user-base, it may make sense to establish formalized policies for end-of-life products. These can help set expectations for customers. Cisco, for example, went so far as to create an end of product lifecycle policy.
9. Coordinate with your marketing team.
You should also sit down with your marketing team and review marketing materials and messages. You want to see where the product you’re about to end-of-life appears, and how you can update those materials with other, more relevant solutions.
10. Consider where the freed-up resources should be reallocated.
Now that you have a sunsetting plan, you can start preparing to redeploy the resources and budget you will free up. Perhaps it may be a good time to cull technical debt by allocating some development cycles to refactoring efforts.
Sunsetting or retiring a product can be difficult. Perhaps even emotional, if you’re the product manager who brought it to market in the first place. But this is the cycle of life. The good news is if you handle the end-of-life process strategically, you’ll find you have extra capacity to make newer products more successful.