In my series about product marketing, I’ve written about the essential skills of a product marketer and how to start using the AARRR framework to develop your product. In today’s post, I’d like to take a deep dive in the product life cycle theory and analyze each stage of the cycle.
I will also check how could you prepare for each stage as a marketer, and which strategies to use to make sure your product thrives, no matter if it’s in the introduction or the decline stage.
Let’s jump straight in.
Product life cycle stages
1. Introduction stage
This is when the fun begins. I would call the introduction stage an experimentation stage. You’re still trying to find product-market fit, iterating your product quite often, and keeping in contact with its early adopters. This stage is also characterized by a low-profit margin and a limited distribution.
2. Growth stage
The number of your users starts increasing. So does the amount of sales. You’re now in the growth stage. You may feel tempted to stop experimenting and just focus on what works, but while you don’t need to pivot entirely, this is also when you have enough data to discover who your users really are.
While you may feel great about your product finally getting traction, you may also be surprised by how complex work is becoming. It’s not enough to ‘move fast and break things’ as you’re now navigating a growing user base and raising funding, all while handling the process of hiring the best people to keep your product growing.
3. Maturity stage
The sales are slowing down, and your competitors have caught up. Your focus now should stay on keeping the market share intact while increasing your revenue at the same time. It’s not an easy task, and you may start feeling a bit panicky.
As with all things product, this is the time to focus on continuously delivering value to your customers. Don’t jump on the new-feature-every-month bandwagon, make sure that you still know what your customers’ problems are and how you could help them solve these.
4. Decline stage
The technology and your competitors have not been asleep for the past few years, and your sales and the number of users are declining at great speed. The only thing that’s soaring is your churn rate.
Now is the moment to decide on the future of your product. Is it time to relaunch it in a fresher form? Should you retire it altogether? The answers to these questions will depend on quite a few factors, and I will write more about in the section below.
How to check which stage is your product at
Once you know what each stage of the product life cycle represents, determining where your product is on this scale is easy. You can start by taking a look at your key metrics: sales, the number of users, and retention. Are they going up or plummeting?
Also, check what your competitors are doing. Have they come out with products similar to yours? Do you have to compete with more companies than ever? These could be signs of market saturation, and while your product may still be in its maturity stage, it may start to move towards the decline phase.
Now that we know what the specifics of different product life cycle stages are and how to discover where on this spectrum your product is, let’s analyze a full cycle using two Apple products as examples.
iPod vs iPhone
Take iPod. The device was originally released in 2001, and now, only one model — iPod Touch — is still in production. The others were discontinued and removed from the store in 2017.
The original product went from the introduction stage where its sales were relatively slow until 2004 to the growth stage in January 2007. Back then, Apple reported its quarterly revenue at the level of $7.1 billion with 48% of all sales coming from the device.
This stage ended in the last quarter of 2008 where Apple reported only 14.2% of revenue from iPod. A year later the line was frozen. In 2013, the new model has been released which seemed like Apple’s last attempt to revive the product.
Looking at the release history of Apple’s another flagship product, iPhone, one starts to think that the company has learned its lesson. Since iPhone’s first release in 2007, the company has been successfully able to introduce a new model at least every year, extending the product’s life cycle with an end in sight.
How should you approach different stages as a marketer
If you’re a marketer like me, I know that you’d love to know which strategies work for each stage of the cycle.
Let’s explore it together.
This stage is all about building awareness and exploring different customer acquisition techniques. Some of the questions you should find responses to in this stage are:
- Who your ideal early adopters are, and what jobs they employ your product to do?
- Where do they hang out, and what is the best way to introduce your brand to them?
- What is your ideal market like, and what could you do to achieve product-market fit?
- What is your product’s Unique Value Proposition, and how could it help in getting these early adopters on board?
In this initial stage, you should focus on all marketing techniques that will help you achieve a product-market fit and get first customers as early into product development as possible. Networking, cold email outreach, customer calls, in-person testing sessions, growth hacking, you name it.
The purpose behind all of these should always be leaving the introduction stage and gaining momentum for your product.
One of the companies that has been able to do it early on was Slack. Do you remember their Wall of Love on Twitter? In the early days, it was Slack’s CEO Stewart Butterfield who personally responded to all tweets mentioning the company. All team were scraping for user feedback anywhere they could find it. As Butterfield claims,
If you put that all together, we probably get 8,000 Zendesk help tickets and 10,000 tweets per month, and we respond to all of them.
And while it may seem a bit excessive, this strategy allowed Slack to grow at a fast rate. The main focus has always been their user, and it’s visible all across their platform.
You can read all about Slack’s go-to-market strategy on the First Round blog.
As I’ve mentioned, this is the stage when you’re starting to get enough data to genuinely analyze who your users are, instead of making assumptions based on personas or ideal customer profiles. I’ve listed some of the questions you may want to find answers to below:
- What segments could you divide your users in?
- What are the differences between these cohorts?
- What makes each of these come back to the product and keep using it?
- What value do they get from your product, and how could you make sure that what you’re providing?
There are quite a few ways you can approach user segmentation as a marketer. As Christopher Gillespie writes on the Mixpanel blog:
Any piece of data companies track on their users can be useful in segmentation, so long as those distinctions are meaningful. Customer segmentation should always tie back to a business goal such as purchases and revenue.
While it may be challenging to keep cross-department collaboration flourish as your product and your team are growing, it’s important to remember that the growth stage is about making sure your whole company shares their goals and values.
The maturity stage is when most of founders and teams start feeling a bit nervous. You start losing a market share, and your competitors are just an inch behind your back. You may feel tempted to start shooting new features out like gunfire, or even just simply copy what other companies are doing with their product.
My advice here is: don’t do it. Go back to the drawing board and once again, laser-focus on discovering what your product’s real value is.
Some of the key questions at this stage are:
- What differentiates your product from other mature tools?
- Why are your users decided to use it in the first place?
- How could you make your existing features better?
- What are your product’s main bottlenecks, and how to overcome them?
As I suppose, these are exactly the questions Mailchimp had to face prior to its recent rebranding.
As the product was growing, its elements were less and less consistent when it comes to design and copy, and the brand was slowly moving away from its trademark unique and quirky style. Just as Gene Lee, the VP of Design at Maichimp writes in the blog post announcing the rebrand:
Since the beginning, design and user experience have been a core part of our business. In fact, our co-founder and CEO Ben frequently reminds us that design was the first discipline he staffed when the company was founded in 2001. It’s part of what has always differentiated us, and it’s in everything we do.
The maturity stage is often the very first moment when you can pause and re-evaluate your product growth, and remind yourself as well as your team what made users drawn to it in the first place, and what your company values are.
That’s it, your product’s hay day is over. Or is it?
When your product is already in the decline phase, there are some truly tough questions you should ask:
- Is there any chance to extend your product’s life cycle?
- Why is it in decline?
- Are there any new markets that are still interested in using the product?
- When and how to decide if it’s time to pivot or start developing a new product?
If you decide to overhaul your product, you can follow advice from Austin Chang, a product manager at Google and a former product lead at Pinterest. Make sure that you streamline your users’ journey into something called ‘Critical User Journey’.
How to identify it?
Start with two metrics: One user acquisition metric at the top of the funnel that measures how many new users are signing up and taking their first action. And then one user engagement metric further down the funnel that measures how often these new users engage with the product over time.
These data will help you define your — as Chang calls them — ‘product levers.’ They’re essential user steps helping them move down the activation funnel. It could mean something as simple as interacting with other users in the first 24 hours since registering if you’re developing a social platform.
Once you have this flow figured out, you should focus on showing your users a way to discovering your product’s real value. Leave us many hints (be it notifications or activation emails) and watch if your product engagement increases.
Over to you
Phew, that was a lot to digest! What are your tips for marketing products at different stages of the product life cycle? Let’s discuss these in the comments below.
Originally published at partners.livechatinc.com.