Guest Post: To Kill a Product: Why, When and How, Part 2/3 | On Product Management

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Guest Post: To Kill a Product: Why, When and How, Part 2/3
Posted in Guest Blogger, Product Management, Product Marketing, Roadmaps - 26 August 2009 - 13 comments
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Note: This is the 2nd of a 3 part series of articles by guest blogger Chris Brown. If you feel inspired to write a guest post of your own, click here to find out how to submit it to us.

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Guest Post: To Kill a Product: Why, When and How, Part 2/3 | On Product Management

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Part 2: When to kill a product

No one wants to manage a dying product. No one wants to sell, support or, certainly, buy a dying product, either. The role of the product manager includes performing the kill analysis thoughtful, thorough and completely unbiased and making a recommendation that is best for the business.

Knowing When Its Time

When do you know its time to kill a product? To make the case, the product manager should demonstrate the products performance over its lifetime and build an impartial view of the situation, and then make a recommendation. With the data points listed below presented and analyzed fairly, the decision to kill or not should be obvious, and the recommendation will carry sufficient weight to sway senior managers. (In some instances, a product may be unfairly on the chopping block, in the doghouse, for one reason or another, of senior management or a CEO. Performing this analysis could just as easily demonstrate why a product should be salvaged and invested in, rather than killed or left to slowly die.) Here are some telltale signs your product is on life support: Steady decline or flat sales volume or market share. Downward or flat sales volume over a long period of time indicates apathy on the part of the market, the sales team or both, neither of which are good. Apathy for one product can have a negative halo effect on others, which is discussed in more detail later. Decreasing or flat revenues and/or margins. Lower/flat sales volume shouldnt be the lone factor in a kill decision. Perhaps your products audience, to quote Spinal Tap, has become more selective. No problem: If a product is specialized and valuable enough to that audience, revenues can continue to climb based on price increases. But if the market is unwilling to accept a price increase and volume is in decline, then youve got a kill situation. This is why margins should also be analyzed. Products become more profitable as they reach economies of scale (products typically have lower margins in the launch and growth stages, and higher margins as the product reaches maturity, assuming steady volume growth). Tight margins, especially well after launch, indicate that the
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Guest Post: To Kill a Product: Why, When and How, Part 2/3 | On Product Management

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product may never reach the scale it needs to be truly profitable in the long term. Lack of investment. Products that are on their deathbed often get ignored during budget cycles. This is not by accident, and can be a self-fulfilling prophecy, but is often a telltale sign that the organization has lost interest. Over-investment. The converse of products that consistently get no budgetary love are the money pits, the ones that suck resources but see no return on investment. Again, the decision to kill these products tends to be a little easier, yet expensive-yet-poor-performing products can inexplicably live on. If high direct costs are the problem, youll see this in your margin analysis. But other costs, like ongoing technical, marketing and customer support, may take more effort to ferret out. KPIs are in the dumper. This is important. Every product has a set of key performance indicators (KPIs) or metrics, other than sales or revenue, that measure success. These can be customer satisfaction scores, usage statistics, conversion rates, etc. Sometimes a product can have very strong KPIs, but slow sales. This could mean you have a marketing or sales channel issue. Ambiguous or conflicting KPIs may indicate a positioning or even tracking problem. In either case, the product may just need some tweaking or new messaging. But if KPIs are and have been in a steady state of malaise, then consider it a bad sign. Strategic misalignment. Strategies can shift from year to year, and a product that was aligned with a strategy when it launched may not be in line with current strategy. Or, it becomes clear that the product was never able to deliver against the strategic direction, even if that direction has not changed. Either way, if your product is not delivering key strategic objectives, then it only becomes a distraction. (This will be obvious in your KPIs, which should be aligned with strategic objectives.) None of these in isolation should serve as a reason to shut down a product. Even together they should be utilized as a basis for discussion of whether or not to go down the path of sun-setting. A products KPIs could be in the dumper, for instance, because the product is lacking key functionality, which it cant have without investment, but no one wants to invest because sales are down, which perpetuates the above mentioned self-fulfilling prophecy. Youre better off applying these criteria to a grid, like the one below, and using this as the basis for a deeper analysis.

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The table will serve as a guide, but each of these areas should be fleshed out with data and analysis by the product manager. In addition to these data points, present information that (hopefully) already exists, primarily a market analysis (who makes up the market for this product and how has it shifted, and what are competitors doing?) and an updated roadmap (features and enhancements necessary for product growth, and the level of investment needed to build these features). Combined this information and view it through a clear lens, and the right direction should be obvious. - Chris Brown Chris is vice president of product management at Apartments.com, a division of Classified Ventures, LLC. Email him at cbrown@apartments.com or follow him @Brown784 Coming up: Part 3: How to kill a product. How do you kill a product? Youve made the decision to pull the plug, now follow these steps to ensure a smooth sun-setting process. Previously: Part 1: Why you should kill a product. If its generating some revenue, even a little, why kill an underperforming product? Because ineffective products divert focus and resources from core and growth products, and ultimately dilute the overall value proposition of the business.

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Related posts: 1. 2. 3. 4. 5. Guest Post: To Kill a Product: Why, When and How part 3/3 Guest Post: To Kill a Product: Why, When and How, Part 1/3 Guest Post: Measuring Product Management (part 1) Guest Post: Measuring Product Management (part 2) Guest Post: Measuring Product Management (part 3)

13 Responses to Guest Post: To Kill a Product: Why, When and How, Part 2/3

1. OnProductManagement says: August 26, 2009 at 5:50 pm 0 0 Rate This Guest post: WHEN to kill a product: http://tr.im/killproduct2of3 Thanks guest blogger @brown784! Reply 2. OnProductManagement says: August 26, 2009 at 5:52 pm 0 0 Rate This Guest post: WHEN to kill a product: http://tr.im/killproduct2of3 Thanks guest blogger @brown784! #leadership #prodmgmt #prodmktg #tech Reply 3. Chris Brown says: August 26, 2009 at 7:22 pm 0 0 Rate This RT @onpm: Part 2of3 of my guest post: WHEN to kill a product: http://tr.im/killproduct2of3
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Thanks @onpm! #leadership #prodmgmt #prodmktg Reply 4. Dheeraj says: August 27, 2009 at 5:22 am 0 0 Rate This Chris, That is a great table. It covers most of the key things that product managers and business heads consider. There are some other aspects as well that merit mention: The people factor: The dev, test and program management team are often galvanized around a product, its technology and plans for future versions. Killing a product might involve re-skilling costs at one end and might serve as a great breather for a burnt-out team. This is a soft cost that really adds up. Communicating the right message to people who refer: When killing a product, sales is often engaged in talking to new prospects, building new channel alliances or educating channels etc. Often people (past clients mostly) who have been championing your product for free also need to be taken into account. This is a diverse set and tackling it takes time. However it is vital to take your voluntary brand ambassadors along. Regulatory bodies: If your product is serving the Government, getting clearances for a phase out is a real pain even when everyone realizes the benefits. Reply 5. Pieter Gabes says: August 27, 2009 at 11:46 am 0 0 Rate This Reading: Part 2: When to kill a product http://bit.ly/3zoQrg Reply 6. Olav de Swaaf says: August 27, 2009 at 1:02 pm 0 0 Rate This RT @pgabes: Reading: Part 2: When to kill a product http://bit.ly/3zoQrg Reply 7. Chris Brown says: August 27, 2009 at 9:41 pm 0 0 Rate This

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Another great comment, Dheeraj. Thanks! In Part 3 I talk about the communication aspects. Great catch on the regulatory bodies, which in my industry I dont have to give too much consideration to, but can be critical in others. Youll see that I do recommend early and frequent communication with your legal department, which would undoubtedly take regulation into consideration. Thanks again, Chris Reply 8. Robin den Buurman says: August 28, 2009 at 7:26 am 0 0 Rate This Again a very usefull post. Thanks. As PM I like to sink off atleast 15 products that are in my opinion not feasible but need strong arguments to let go of that revenue. Reply 9. Guest Post: To Kill a Product: Why, When and How, Part 1/3 On Product Management says: August 28, 2009 at 7:32 pm 0 0 Rate This [...] This post is contributed by Chris Brown, Vice President of Product Management at Apartments.com. This is the first in a three-part series that takes an in-depth look at that process and makes its own set of recommendations on why, when and how to kill a product. (Part 2, When, is here.) [...] Reply 10. Titus Osikoya says: September 3, 2009 at 2:27 pm 0 0 Rate This I was refered her by someone on LinkedIn Question and answer. I appreciate this post a lot. Thanks Chris Reply 11. While you were out: Top GUEST posts of the summer from ON PM On Product Management says: September 8, 2009 at 10:41 pm 0 0 Rate This [...] kill a product: Why, When, and How (3 parts, Chris Brown, VP PM at [...] Reply 12. Guest Post: To Kill a Product: Why, When and How part 3/3 | On Product Management says: July 5, 2010 at 6:17 am 0 0 Rate This [...] Part 2 When?: When is it time to kill a product? Part 2 offers up six areas to keep an eye on for
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telltale signs. Its examining these areas that will help product managers build the case to kill or keep a product. [...] Reply 13. Elisabeth May says: February 12, 2012 at 12:38 pm 0 0 Rate This Guest Post: To Kill a Product: Why, When and How http://t.co/ASvsqC8R Reply

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