Why Manage A Product’s Life Cycle?
To create successful new products an organisation must, first and foremost, understand its customers, markets and competitors. The aim of product life cycle management is for an organisation assign people, data, processes and technology in an effort to reduce product development times and costs before launch. It’s also designed to reduce time to market, reduce risk entering the market, while also delivering a product that is unique and of a high enough quality to compete with existing alternatives and generate profit. Once a product has moved through its life cycle, it is the responsibility of an organisation to decommission the product with as little impact to the business or its customers.
Whenever a Product Manager builds a product, the product will typically travel through four main phases of the product lifecycle; introduction, growth, maturity and decline. A Product Manager could manage one or more products or features somewhere along the product life cycle at any given time. Ideally, a Product Manager would be there at the beginning of the process and see it right the way to the end but in reality, they will most likely start in an organisation and enter the lifecycle at any location other than the very beginning.
As the name suggests, this is when a product first enters the market. It is the role of the sales and marketing team to develop an effective marketing message through the appropriate channels to attract potential customers. At this early stage of the product life cycle, the product may well be pre-revenue and/or pre-user. Below is a diagram of a typical cash-burn graph. The beginning represents the amount of money, across time, that is needed to create the product of feature. The aim of an organisation is to reduce the burn rate as much as possible and get to break even as soon as possible.
During the growth phase of the product life cycle, a product should be getting very close to product-market-fit. Customer acquisition should be increasing and Cost Acquisition Cost should be decreasing as you refine your marketing and messaging. Sales and marketing efforts will change to include not only the front of the funnel but also the need to retain existing and reactivate dormant customers.
Here the product has been in the market for some time. If not already, its existing competition will have repositioned themselves to retain or increase market share and new competition will have also entered the market to take advantage of new opportunities. During the maturity phase of the product life cycle, the product should be generating significant profit and have been shifted into the business as usual operation of an organisation.
In the decline phase, often new technology has been introduced to the market, the market is saturated with competitors, margins have been reduced, or there is no longer a customer base for said product. Here the cost of maintaining the product is more than the product is generating for an organisation therefore It’s necessary to decommission the product and focus on establishing the next product to enter into the market.
Product Development Cycle
Within the high-level product life cycle mentioned above, there exists another cycle – the product development life cycle. It is made up of seven main areas which align with the overall product life cycle.
In this section, a Product Manager is trying to determine what should, and equally, what should not be worked on. To answer this question they conduct internal, external, quantitative and qualitative research to determine user needs, gains and jobs to get done for their customers. This is where a Product Manager is defining user needs and the core problem statements for each customer and/or user.
In the plan phase, a Product Manager will conduct additional research on all the ideas and possible solutions to the above-mentioned problem statements. In the identify stage, a lot of the suggested solutions are simply assumptions based on the data collected. They may be very good assumptions based on very good data but more research is need to validate or invalidate that a) the pain points are real and worth solving and b) the solutions suggested would be the correct ones for the customer segment being targeted. The best way to determine this is to conduct customer development interviews to test all the assumptions.
In this phase, the product team work together using Agile, Scrum and Lean methodologies to create the product strategy, product roadmap, epics, the product backlog, issues, stories, tasks, acceptance criteria and eventually the minimum viable product (MVP).
Once the MVP has been launched, data is gathered from different sources throughout the organisation including the service desk, analytic tools, built in monitoring tools, customer interviews, the marketing team and social media channels, etc. The purpose of the evaluate stage is to test the market acceptance and gather data. The data is then consolidated and analysed to allow the product management team to make informed decisions on if they should proceed with the product launch or if additional work is required to fine tune the product.
If the data from the evaluate stage is positive, then the product management team moves into the launch phase. During the launch phase is where a lot of cross-functional team work takes place to make sure the product is released into the market correctly. The service desk should have all the necessary documentation and information ready to assist customers, the marketing team should have all the marketing collateral, the development team should be prepared for any additional work that may come in once an organisation starts acquiring customers.
Collecting and analysing data is a mainstay of a product manager’s role. Once the product has been launched, marketing efforts ramped up and customer service calls increasing there will be a significant increase of data generated throughout an organisation about the new product’s performance. It’s the responsibility of the Product Manager to collect and analyse the data in order to incrementally improve the product’s performance and reduce costs. This data also provides insight into how the product roadmap should be developed and, on a more immediate level, what benefits or features should be delivered to the market next.
Every product should be measured against a key set of metrics. These metrics might be revenue, monthly recurring revenue, average revenue per customer, etc. The product management team needs to weight up the results of these metrics against the cost to keep the product in market. The product may have reached its end of life but have a significant market share. It may have been superseded by a newer version or model. The product may still have a high daily/monthly active user base however there are fewer and fewer sign ups and the customer churn suggests it’s time to kill the product or feature. It is the role of the product management team to determine if/when and how the product will be retired. The main challenge here is communicating this to existing customers in such a way as to not adversely affect business operation or profitability.
Over To You
This blog as provided a high–level overview of the product life cycle. It has then described, in more details, the product development cycle. Collectively, a Product Manager will work with their product management team along with other cross-functional teams within the business to take a product or feature from idea to commercialisation as quickly and accurately as possible while also reducing time to market and time to profitability.
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