Products are introduced, compete in the market, evolve, and are eventually discontinued. Product end-of-life happens and a variety of factors drive this decision. Innovation never slows. New technologies, manufacturing techniques, and improved materials can quickly make existing products or services obsolete. Supply chain disruptions or availability of existing or new parts and components may change something about your product’s form, fit, or function. Market conditions change. Customer demand or behavior evolve. Profitability and the cost of business may make sustaining a product or service line impossible. Or, the business has evolved and your capital needs to fund other innovations or investments. Whatever the reason, product discontinuation is not something people look forward to confronting.
What’s driving inaction around product end of life
Why is it that people rarely want to talk about product discontinuation? We see several factors at play from fear to focus. But as with several aspects of business, there is risks in not acting before it’s too late. For example:
- Nobody wants to be the bearer of bad news to the customer. Sellers need to deal with delivering what they anticipate will be a negative reaction and they need to mitigate the risk of losing a customer.
- It may be difficult to know what and to whom to communicate the information, especially if data management systems are not in place or if there’s a channel involved and the go-to-market strategy is complex.
- Sales and product teams often fear competitive fud. There’s an instinct to keep it quiet so the competition doesn’t seed criticism of your company as being non-reliable or not being customer-focused by taking something away or creating rumors about the health of your business because you’ve chosen to discontinue a good, service, or line of business.
- It’s not perceived as fun. Everyone loves the bright, shiny new thing and they want to talk about that, not what’s going away.
- Perhaps communicating product discontinuation has not been managed well in the past and that’s the playbook you know. You may have managed it by not managing it or jacking up the price on the product ahead of end of life to discourage purchases.
- The human element, ego. There is pride in legacy products and innovation. There can be an emotional attachment to “what got us here” that may compel leaders to ignore market information and make decisions from the heart not head.
Rewards of product end of life
That may all seem overwhelming. Be assured, the benefits outweigh the risks of communicating (and even campaigning) about a product’s end of life. Here are things to consider.
- Any promotion can be a quick win. Your business will have the opportunity to move inventory and create revenue from soon-to-be stranded goods or discontinuing services.
- Every business has a responsibility to their customers. Informing customers of product discontinuation demonstrates goodwill by being honest. You may even have a legal obligation to do so – out of contractual obligation or in cases where their business or personal health may be dependent on your goods or service.
- Optimistically, it gives you the opportunity to promote your next product or service. It demonstrates your company is thriving and investing in the next thing to keep them happy whilst possibly boosting your profitability or market differentiation.
- It opens a dialogue to gain greater insights with the customer. Starting this conversation ensures you understand where and how customers use the good or service, their reliance on your product and future needs, and creates an opportunity to re-evaluate what you propose going forward.
Managing product end of life
So, we trust those benefits outweigh the risks and that you’ll think differently about this moment. When you do, be sure you communicate the following details about your product’s end of life.
- Plan to bridge the gap with your inventory of the discontinued good or its replacement. Be prepared. Know what you’ll do if you cannot fulfill demand.
- Communicate early and often. Remember, your timeline is not theirs. So, make sure you give enough time for them to “hear you” and respond. It’s likely they will need to do some internal investigation about what they need and how this change may impact them.
- Before you discontinue, have ample run-up time where you’re promoting the “new” thing and convert as many customers to the new product before the turn-down. Consider online ads, redirects from website pages, and incentives to try the new thing.
- Invest in sales enablement training for your direct sellers, distributors, and other partners of the “new” well ahead of the discontinuation. And, when the product or service turn-down happens, re-engage them for robust training on the communication plan.
- And keep information clear. Include specific descriptions (SKUs), precise end dates for last-time purchases, repair, and replacement services, and any other key moments. Tell them what’s next. How will you support them during the transition? Consider having an interim hotline. Have questions and answers prepared so your staff can easily manage questions and remain consistent. And have the information in written and digital form.
Rely on expertise for these critical situations
There are plenty of nuances to managing product end of life. It’s understandably complex. You’re navigating your business needs, managing your customer and partner relationships, and this one decision will create a waterfall of activity. Effective discontinuation will raise a myriad of questions, actions, and details to manage. Here’s the good news. We have the blueprint and can help you through this critical time so you can keep your eyes on the ball of your everyday business.
Contact us. We’d love to help!
Wondering if working with an agency on product end of life or other services is right for you? Check out our blog on that topic.
Pingback: Product packaging for a great customer experience - Wild Plum Marketing