When Should You Sunset A Product

Deciding the right time to sunset a product is a crucial decision for any company. A product goes through various phases in its lifecycle: introduction, growth, maturity, and decline. Once a product reaches the decline stage, it may be time for companies to consider sunsetting it.

Sunsetting a product means removing it from the market. This decision should not be based solely on the lifecycle stage. Several factors must be considered before making the final call. Here are the key factors to evaluate.

Relevance of the Product

How relevant is your product in the market? The utility and desirability of a product can change due to technological advancements, consumer preferences, and market dynamics. If your product is no longer relevant, it may be wise to sunset it and direct resources toward more profitable opportunities.

Sales Performance

What do the sales numbers indicate? Consistent decline in sales over time, even after promotional efforts, can suggest that it’s time to consider removing the product from your offerings.

Profit Margins

Are the profit margins sustainable? A product might still sell, but if production, distribution, marketing, and maintenance costs are rising faster than the profit margins, continuing the product may not be worthwhile. Regularly evaluating profitability can provide insights into its impact on your company's financial health.

Support Load

Is customer support becoming an issue? Some products, particularly technology-based ones, can create a significant support burden. If the costs and complexities of customer support outweigh the benefits of keeping the product, sunsetting may be a better option.

Strategic Alignment

Does the product align with your strategic goals? A product should fit within the broader strategic framework of the company. If it no longer supports your long-term vision or current objectives, sunsetting may be a suitable choice.

Once the decision to sunset a product is made, managing the process thoughtfully is essential. Consider the following tips for effective product sunsetting:

Transparent Communication: Clearly inform all stakeholders, including customers, employees, and partners, about the decision to sunset the product. Provide timely and clear reasoning for the decision.
Phasing Out: Gradually phase out the product instead of discontinuing it abruptly. This approach minimizes the impact on customers and allows them time to find alternatives.
Support During Transition: Offer assistance to customers during the transition. This may include FAQs, support articles, or guidance on migrating to new or alternative solutions.

The choice to sunset a product requires careful consideration. Focus on maximizing value for customers and the business. Sunsetting is not a failure but a necessary step in managing the product lifecycle. Done correctly, it can lead to more innovative and profitable opportunities in the future.

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