MD: Product managers have to supervise a product throughout its life cycle. Here is a guide to its primary stages and characteristics.
Whenever a new product enters the market, it has to live through a series of life cycle stages to get adopted by the users and stick around. Thus, every product development team-oriented at their product’s sustainable growth and success in the market needs to understand those stages and take proper measures at each phase. There’s much valuable information about this process in the article about product roadmap, which will be of much use to those who take the product life cycle seriously. Now, let’s proceed to the life cycle stages in detail.
The initial stage of any product’s life is its introduction to the market. Every product needs to pass through this stage regardless of whether it’s a new version of something well-known or a completely new product with no predecessors and analogs. The primary aim of the whole team behind the product is to tell the world about it and communicate its value.
This phase is the most challenging for the product development team. It is a decisive moment in terms of investing time and effort in its promotion. Experts analyze the user adoption metrics, look at what features people find valuable and which are redundant, and decide on the product’s destiny.
It’s essential to keep in mind that you shouldn’t expect any substantial revenue at this point. The sum you can earn on the first adopters of your product is meager compared to the investment you have made to create and launch it. So, keep patient and be attentive to all aspects of the product’s introduction. Measure the users’ adoption rate, and do the troubleshooting and changes. Only when the user base grows, and people come back with more orders can you realize that your digital product moves to the second stage of its life cycle.
The introduction phase is over, and the product gets integrated into its market structure. Now it’s time to think about its growth and expansion. You can achieve the revenue expectations by scaling the product and start earning real money on it. If you produce a physical product, the benefit of the growth period is in the reduction of costs per unit. Besides, as time passes, your production quality is sure to rise. You will experience fewer defects and unpredictable errors in the process. Scaling is even easier with digital products. You may sell many more subscriptions and downloads to users without the need to expand your staff or physical facilities.
Yet, along with the realm of opportunities you can get in the market in this period, you should start addressing new challenges. First of all, it is the rising competition. Brand-new products have no rivals in the market when they start out. They try to embrace a new niche with fuzzy revenue perspectives. But as time goes by and your product proves successful, you get many copycats wishing to get a share of the new market niche.
As soon as you see the intensifying competition, you need to take measures for differentiation or pricing. It’s hard to keep pricing high enough when competitors downshift your pricing policy. So, it’s better to adopt flexible pricing approaches (e.g., tiers, use-based models, etc.) to give the users more control over price-setting. Another path is to differentiate your product from the competitors as a pioneering offer in the field. You can also offer new appealing features to enhance the value of your offer and keep loyal customers with better service packages.
As soon as the turbulent growth period ends, your product enters the maturity phase. Many product managers fear this stage. It comes with the decrease of new users, while the need to compete with rivals in your market niche remains.
So, what can a product manager do when the inflow of new customers weakens? The wisest strategy at this stage is to preserve what you’ve achieved. Keep customers with differentiation and added value. Look at all the well-known tech giants in the market. They never stop on the achieved and add new features, perks, and updates to their existing products, no matter how good they are.
It’s vital to choose new features with a high ROI to ensure that the revenue stream from your mature product stays the same and does not reduce critically for the company’s health. At this stage, in-depth UX research and user behavior analysis can help you stay on the same page with what users like and need from your product, thus adding only the needed features to your value proposition and keeping your users committed.
Times change and every product finds a replacement or experiences a major decline in demand in its market. These events typically don’t depend on the product itself as they happen because of the larger market trends. For example, the market for regular cellular phones dwindled upon the advent of smartphones and the wide Internet dissemination.
So, the task of product managers overseeing a mature product approaching its decline is to embrace the market changes and use them to the company’s advantage. It may be a high-tech rebranding of a well-known product, which will be easier to promote than a brand-new offering. For instance, Apple did a good job capturing the falling demand for desktop devices and dynamically switching to mobile products, while McDonald’s has been pursuing a healthy food agenda for the past decade to retain its customers concerned about healthy eating. The main idea behind innovation is to bridge the old product with its new version. In this way, the customers will get the feel of the good-old brand identity in the new, high-tech cover.
Why the Life Cycle Knowledge Matters
As you can see, the product’s life cycle is inevitable, and all companies need to go through these stages with their products. The most challenging one is introducing a new offering and making the market love it. The most appealing is the growth stage at which you increase revenues and enjoy the rising demand. However, maturity and decline can also be used to your business advantage if you have a skilled product management team.