Product lifecycle management is arguably the most underutilised tool in the product management toolkit. In this five part series, we explore the basics of product lifecycle management and provide some practical advice for managing products in each lifecycle stage.
In part 1 we give an overview of the lifecycle and how to identify where your product is with a product value metric. Part 2 will dive deeper into the first stage of the lifecycle, introduction, part 3 into the exciting growth stage, part 4 into product maturity and the series will finish off with tips for managing product decline in part 5.
But first, what is a product lifecycle and why is it important that we actively manage it?
The Product Lifecycle
We all know as product managers, a product is a bit like a living and breathing organism. Perhaps it is unsurprising then that it indeed has a life that goes through multiple stages.
Launching a new product is a bit like the birth of a new fledgling bird. It is followed by huge potential and promise as the bird hatches from its egg, but often what first gets into market is featherless and a bit funny looking. It takes a while for a product to grow into its features (or feathers) before it really takes off and learns to fly.
Later in life, it can be hard and much less exciting to manage a product as it matures, slows down and looks to retire. But these are incredibly important life stages with strategic decisions that impact the profitability and lifespan of the product significantly.
It is essential that product managers learn to understand and appropriately manage a product to its lifecycle stage in order to ensure opportunities are taken and investments are made appropriately. Without proper recognition of a product’s lifecycle stage, the wrong type of investments may be made. This not only wastes precious resources, it squanders growth opportunities and, worse case, significantly impacts the sustainable commercial viability of a product, leading it to prematurely fail.
Truly understanding the product lifecycle is like having a crystal ball to peer into the future. It allows you to make confident strategic decisions and place your bets in the right ways to maximise the sustainability and profitability of a product.
So how do you know where your product is in its lifecycle? It all starts with your product’s value metric.
The Product Value Metric
The rate of change of the value metric, now and historically, is how you tell what stage a product is at. This avoids a ‘gut feeling’ that the product in introduction is in growth or maturity for instance.
The value metric needs to accurately predict the future direction of growth of your product, early enough to do something about it. This means it cannot too significantly lag actual changes in customer uptake – especially important for the introduction and maturity stages.
The choice of value metric will depend on the product. For some products it may be revenue, units sold or ordered. This may be particularly reasonable for a new physical product like a new model of iPhone. But this is not the whole picture for other types of products.
If your product has a significant free customer base, like Canva for instance, revenue will not accurately predict growth as new paid users will frequently convert from free. A metric like monthly or daily active users may be more appropriate in this case.
Also if your product relies on multiple revenue streams (some of which are decoupled or follow product growth), total revenue will also not be appropriate. For instance a news app that has advertising revenue (anonymous views), paid subscribers and paid content partnerships may find daily views better underlie the growth of the product and future revenue.</p?
Lastly, the value metric needs to be something you can easily measure and something hard to game. This may mean you need to put some caveats around the measurement. For instance, it would be easy for me to game a daily views metric by deploying a bot army – so I may want to qualify what counts as a view.
Once you have your metric, observing how it behaves identifies where you are at in the lifecycle. Accurately understanding what lifecycle stage your product is at is essential as different actions should be taken at different lifecycle stages to set your product up for success. Next, let’s go into how the product value metric behaves in each lifecycle stage.
Stages of the Product Lifecycle
At Brainmates we use a 5 stage lifecycle, with one pre-launch stage (development) and then four stages following product launch – introduction, growth, maturity and decline – that outline the natural life of a product. It is important to note that life is not necessarily linear particularly for growth and maturity (it is possible to go from maturity back to growth) – but, for the majority of products, this is how life plays out.
The lifecycle starts at launch
While most lifecycle graphics will include a ‘pre-launch’ phase (in our case called development), as the product is not available to market, the lifecycle has not started yet. Once a product has even a limited or beta release, it should be treated as in the introduction stage.
While pre-launch a product lifecycle may not be able to be measured, important decisions are already being made that will impact the product for the rest of its lifecycle. One of the most important is how your product will be positioned and for who. This has driven all of your product development and will impact how you launch and who’s feedback you listen to in introduction.
Often development happens in a bubble, without a structured process for asking the right questions. This is where having a solid development process (like the Brainmates product management framework) that introduces customer research and opportunity analysis early can be essential to the success of a product. While many lessons will have to be learnt in the introduction stage of a product, it is possible to forego some of the most obvious with a solid development process.
The Introduction Stage
The introduction stage is characterised by slow, linear growth of your value metric, with most of your customers being early adopters. It is fairly easy to tell where this stage starts – at product launch – but can be more difficult to tell where you exit introduction into growth.
Contrary to popular opinion, the introduction stage does not have a definite time frame or revenue to hit. A product may be in introduction for decades before it finally grows. Or it may never exit it at all (this usually means it has no market fit).
The introduction stage ends when a product reaches product market fit (also an elusive concept). Practically, this will mean when your value metric goes from linear to an exponential rate of growth for a sustained period of time, usually at least a few months.
Products that successfully exit the introduction stage into growth will have identified a compelling proposition to a large enough customer base to expand beyond early adopters.
The Growth Stage
Unlike the introduction stage, where it can feel like every customer acquisition is a battle, the growth stage feels like you hardly have to try to sell your product at all (think ChatGPT). This stage is characterised by exponential value metric growth.
When talking about growth it can be popular to assume that growth comes from an exciting one off occurrence. Just one post from one influencer is what we need! Or perhaps we need to build this new ‘virality’ feature.
While luck does indeed come into many product’s growth stories, in reality, growth generally comes from a deep understanding of your unique customer segment. In particular developing a deep and enduring proposition for them that makes their lives easier, better, [insert your meaningful customer benefit here]. It also comes from rapidly delivering on that value proposition faster and better than anyone else that may be coming after you.
The Maturity Stage
Coming off growth sometimes feels disappointing. You go from exponential growth in your value metric, back to linear growth. Each sale becomes more of a struggle, you miss acquisition targets, and generally your customer acquisition costs go up as you try to access more elusive customers.
The majority of the biggest products you can think of are in mature growth. They are consistently growing, but their growth is off a larger base and it is incremental. This may be one of the longest stages for products that continue to invest in incremental improvements to retain, attract and re-acquire customers. But it may also be short-lived if your competitors are more effective.
Because both introduction and maturity are both characterised by linear value metric growth, these two stages can sometimes be misassigned. This is why it is so important to look at your metric historically. If there was never sustained exponential growth, then your product is probably still in introduction. Even if it has been 10 years since it was launched.
The Decline Stage
Contrary to popular opinion, it is possible to make a lot of money from a product in decline. This is frequently the whole business model of aggregators. The trick is to have a plan.
The decline stage, as it sounds, is characterised by an overall decline in the value metric as customers either churn or force down the price as the product is seen as a commodity. A product enters decline when the product is no longer needed (e.g., the problem is no longer a problem), it is effectively outcompeted by an alternative or the customer base erodes (e.g., societal change).
Products in decline will have an eventual use by date, but it may be a very long time. Even the much maligned Blockbuster and Video Ezy brands still exist as a handful of franchised kiosks. Usually the speed of decline depends on how good the product is at retaining its existing customer base.
Join us for the next part of our five part series, where we go into the introduction stage in more depth. We will discuss how what you launch matters, what you need to know about getting your first customers and how to handle research, feedback and prioritisation.
