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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 - 13comments
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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 towrite a guest post of your own, clickhere to find out how to submit it to us.
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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 arecommendation. With the data points listed below presented and analyzed fairly, the decision to kill ornot should be obvious, and the recommendation will carry sufficient weight to sway senior managers. (Insome 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 aproduct 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 longperiod of time indicates apathy on the part of the market, the sales team or both, neither of which aregood. 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 factorin a kill decision. Perhaps your products audience, to quote Spinal Tap, has become moreselective. 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 priceincrease 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 havelower 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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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. Thisis 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 theseproducts tends to be a little easier, yet expensive-yet-poor-performing products can inexplicably liveon. If high direct costs are the problem, youll see this in your margin analysis. But other costs, likeongoing 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 customersatisfaction scores, usage statistics, conversion rates, etc. Sometimes a product can have very strongKPIs, 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 productmay just need some tweaking or new messaging. But if KPIs are and have been in a steady state ofmalaise, then consider it a bad sign.
Strategic misalignment. Strategies can shift from year to year, and a product that was aligned with astrategy when it launched may not be in line with current strategy. Or, it becomes clear that theproduct was never able to deliver against the strategic direction, even if that direction has notchanged. 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 beutilized 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 havewithout investment, but no one wants to invest because sales are down, which perpetuates the abovementioned 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 theproduct manager.
In addition to these data points, present information that (hopefully) already exists, primarily a marketanalysis (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 levelof 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 [email protected] 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. Guest Post: To Kill a Product: Why, When and How part 3/32. Guest Post: To Kill a Product: Why, When and How, Part 1/3
3. Guest Post: Measuring Product Management (part 1)4. Guest Post: Measuring Product Management (part 2)5. Guest Post: Measuring Product Management (part 3)
13 Responses to Guest Post: To Kill a Product: Why, When and How, Part 2/3
1. OnProductManagementsays: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. OnProductManagementsays: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
Reply3. 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. Dheerajsays: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 mightserve 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 channelalliances or educating channels etc. Often people (past clients mostly) who have been championingyour product for free also need to be taken into account. This is a diverse set and tackling it takestime. 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 evenwhen everyone realizes the benefits.
Reply5. 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
Reply6. Olav de Swaafsays:
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. Greatcatch 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.
Reply9. Guest Post: To Kill a Product: Why, When and How, Part 1/3 On Product Managementsays:
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 andmakes its own set of recommendations on why, when and how to kill a product. (Part 2, When, ishere.) [...]
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 Managementsays: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 Managementsays: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
http://onproductmanagement.net/2009/08/26/to-kill-a-product-why-when-and-how-part-23/comment-page-1/#comment-6697http://onproductmanagement.net/2009/08/28/guest-post-to-kill-a-product-why-when-and-how-part-33/http://onproductmanagement.net/2009/08/26/to-kill-a-product-why-when-and-how-part-23/?replytocom=3777#respondhttp://onproductmanagement.net/2009/08/26/to-kill-a-product-why-when-and-how-part-23/comment-page-1/#comment-3777http://onproductmanagement.net/2009/09/08/while-you-were-out-top-guest-posts-of-the-summer-from-on-pm/http://onproductmanagement.net/2009/08/26/to-kill-a-product-why-when-and-how-part-23/?replytocom=3778#respondhttp://onproductmanagement.net/2009/08/26/to-kill-a-product-why-when-and-how-part-23/comment-page-1/#comment-3778http://onproductmanagement.net/2009/08/26/to-kill-a-product-why-when-and-how-part-23/?replytocom=3781#respondhttp://onproductmanagement.net/2009/08/26/to-kill-a-product-why-when-and-how-part-23/comment-page-1/#comment-3781http://onproductmanagement.net/2009/08/24/to-kill-a-product-why-when-and-how-part-13/http://onproductmanagement.net/2009/08/26/to-kill-a-product-why-when-and-how-part-23/?replytocom=3780#respondhttp://onproductmanagement.net/2009/08/26/to-kill-a-product-why-when-and-how-part-23/comment-page-1/#comment-3780http://onproductmanagement.net/2009/08/26/to-kill-a-product-why-when-and-how-part-23/?replytocom=3779#respond -
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telltale signs. Its examining these areas that will help product managers build the case to kill orkeep 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
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29/05/13 10:17Guest Post: To Kill a Product: Why, When and How, Part 2/3 | On Product Management
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