Product lifecycle extension strategies to maximise revenue

Vikash Kumar Director, Acuity Knowledge Partners

Amid the current competition, pressure on revenue and margins, and constantly evolving technologies, it has become important to explore all avenues that could help an organisation achieve its objectives One area organisations can look to explore is product strategy Both the market and customer needs continue to evolve; it is important for organisations to recognise this and proactively take steps to ensure not only customer retention, but improvement and expansion of products

The typical product lifecycle is discover – build –grow – mature – decline. Customer requirements are at the core of all stages, and the more a product is closely associated with these requirements, the higher its chances are of success.

At Acuity Knowledge Partners, we offer market leading products catering to multiple business areas of a Financial Organization like Commercial Lending, Investment Banking, Investment Research, Compliance etc. One of the fundamental principles behind establishing Acuity as a product company has been our philosophy of experiment driven product development approach with customer at core of it. Our approach of consultative engagement with our customers has helped us in delivering robust products which is close to customer needs.

Customer at the core of the product lifecycle

Discover

The organisation understands the customer need and the gap in the current product offerings, and based on user research, starts working on a prototype of the product The prototype is used in customer discussions to further validate and refine the product idea

When the organisation ensures the product is addressing the customer need, the product is built iteratively and introduced in a phased manner; features are enhanced based on regular customer feedback

Growth: Maturity:

Once the product has been accepted by customers and starts generating regular revenue, the organisation focuses more on brand awareness to increase market share Again, customer feedback is important to maintain this phase

At this stage, the product is well accepted in the market and customers are satisfied with product offerings Competitors start to offer similar products, and competition is at its peak

Decline

Here, either a competitor’s product has replaced the organisation’s product due to better offerings or the customer need has changed. The organisation sees no benefit in investing more in the product, as customers have shifted to alternative products and product revenue has started to decline.

Identify and expand the product’s market

Penetrate a new market by adding features required by that market; this could be as simple as the product supporting the local language. In the case of payment or delivery apps, the strategy could be to enable support of payments in local currency or enable delivery to/from a particular city. A recent example is Zomato adding intercity delivery, with users able to order and get food delivered from different cities. Another way to expand the product’s market is by collaborating with a partner that has a presence in the new market.

Increase awareness

While most products follow this lifecycle, there are many ways in which an organisation could intervene and delay the decline stage and extend the growth and maturity stages This would prevent the product from becoming obsolete while driving extended sales and profit

Product lifecycle expansion strategies

While there are different strategies that could be implemented to extend a particular stage of the product lifecycle, the ideal stage to extend is maturity, where the product is at its peak and the organisation is generating maximum sales and profit from the product with minimum investment This would ensure optimal extension of product life and the maximum benefit is derived from the effort and investment required for doing so It is also important to measure these efforts through KPIs such as NPS, revenue, retention and margins to ensure they lead to desirable returns

·Add new features

Based on customer feedback, add new features to improve product experience and use Seeing the organisation value their feedback, customers would associate more with the product and build loyalty This would help manage the competition, retain market share and increase the chances of expansion It could also lead to product penetration in new market segments A recent example is WhatsApp increasing the group limit from 256 to 512 and then to 1,024, keeping competition and customer need in mind

The customer base could be expanded by more focused and targeted marketing campaigns, increasing brand awareness and market share Organisations also explore rebranding to introduce a freshness A recent example of this is Grocery delivery App Grofers, rebranded to Blinkit where proposition is 10-minute delivery promise in line with the rebrand

Product pricing strategy

Giving discounts to first-time users or using different pricing tactics in the new market could attract new customers Uber and Zomato follow this strategy

To conclude, I will say that by adopting such strategies, organisations could extend the product lifecycle especially the maturity stage Success would depend on an organisation’s willingness to invest more in the product at that stage and there being new markets and customer bases to tap Extension of product lifecycle and seamless execution need to be planned properly if they are to deliver the maximum benefit This would help a product unlock new revenue potential and gain a new life and competitive edge