What’s the best strategy for my product?
I receive this question more than you can imagine, but unfortunately, there’s no easy answer. Before discussing strategy, you need to understand the stage of your product in the product life cycle. For instance, a growth strategy won’t work for a product in the decline stage.
To help you understand the status of your product, this article will provide an overview of the different stages within the product lifecycle, as well as the limitations that arise from using such a model.
In 1966, Raymond Vernon released the product lifecycle theory, which defines the four stages of products. Although it’s before the digital era, it’s still applicable to our reality. The following image shows how the lifecycle develops:
Now, let’s clarify the meaning of each phase:
Before you hit the market, you’ve got a lot of work to do. When creating a new product, you need to:
This phase is dangerous. A common strategy is to build, present, and sell. Seldom does it work unless you’ve got a brand that customers already love. A better approach is to speed up the learning time to understand what resonates with your potential customers.
During the introduction phase, you want to mitigate risk as much as possible. A good way of doing this is to receive customer commitment as fast as possible. Instead of building to sell, you can sell to build.
For example, I wanted to craft a course to help people hone their discovery skills, but creating a high-quality course takes time. I needed to ensure my value proposition spoke to my audience, so I made a landing page available (it took me two hours) and promised a live course in the future.
I’d create the course only if I secured five paying students. I got the students within a week and only then created the course. If I didn’t get them, I would’ve just refunded the five students and reworked my value proposition.
When do you know you’re in the growth stage?
You know you’re ready to scale up once:
The growth stage isn’t a black-and-white science, but it means your product has reached market fit and is time to scale up. Yet, I must warn you that scaling up your product too fast will backfire, so start slow and grow gradually.
During the growth stage, it’s crucial to simplify how you acquire customers. A few good practices are:
When you’re in the growth stage, traction, customer acquisition costs, and lifetime value are vital to measure. Adapt as you learn, but be aware that what worked for a few customers needs to evolve to work for more. Keep your learning speed at full steam.
When your product reaches its maturity, your strategy should prioritize customer retention. Competition will be stronger as you reach a solid user base because your competitors will want to win them away from you.
The key to retention is to steadily deliver value for your customers and ensure you differentiate from the competition. Also, you can increase loyalty in different ways. For example, as an Apple customer, I am reluctant to change as everything is integrated. When I think about moving to Android, I remember I have a set of Apple products that work seamlessly.
Hook your customers in and get ready for the next stage.
Your product won’t last forever — that’s natural. Eventually, something will come and steal your customers. The iPhone took over the Blackberry market and lately, digital photography got Kodak. That’s why it’s critical to prepare for that.
During maturity, strive to create another product to hook your current customer base so the decline won’t be lethal for you.
Let’s take Apple as an example. The iPod was the high-runner from 2005 until 2009, but Apple was already facing fierce competition. Realizing that, the iPhone was born, which Steve Jobs introduced as an “iPod, a phone and an internet communicator.” Within that, Apple not only entered a new market, but also could still give a reason for the iPod users to stay with them.
Although the iPod was officially discontinued in 2022, the decline started in 2010:
The product lifecycle will help you understand the big picture and guide you in the right direction, but it doesn’t give you all the answers. Let’s talk about a few limitations.
The growth stage tends to be the longest; the challenge is understanding who you are targeting. For example, targeting the whole market is unwise once you hit market fit. You need a strategy to grow, gradually moving from early adopters to early majority, and then late majority and laggard.
Understanding your product stage is fundamental to crafting your strategy, organizing your team, and setting goals. Without that, you may run in circles and struggle to progress. However, you need to be aware of the model’s limitations. Combining the product life cycle with the product adoption will give you better guidance to evolve.
If there’s one thing you should take away though, remember not to craft a product strategy without a clear understanding of your product stage.
Featured image source: IconScout
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