Sunsetting A Product Without Alienating Your Customer Base

Nov 6, 2023   |   By SEI Team

Sometimes, the best thing you can do to grow your business is to let go, especially if a product or service you’re offering no longer serves your goals.

As a business, the goal is to keep your customers satisfied — but what if the product you’re offering is the cause of their discontent? Do you completely shelve the product your team spent time, energy, and money on and start from scratch? Or do you enhance the features that are underperforming?

While these questions may bring on feelings of hesitation and discomfort, sometimes less is more. Fewer features can mean more user-friendliness. Less product maintenance can mean more free time for your team to innovate. But how do you know whether it’s time to iterate a new version of your existing product or sunset it altogether? Hint: Data is going to be your best friend. From ideation to implementation, here’s how to successfully sunset a product and create a clean slate for a better offering without alienating your customer base.

Understanding Product Sunsetting

Before we get into the process of product sunsetting, let’s explore what it means and why it’s good practice when done well.

What is Product Sunsetting?

Product sunsetting is the strategic process of discontinuing a product or service that is no longer viable or aligned with a company’s goals. But it entails more than removing an offering from your roster of services and commodities — it’s the key to keeping customers loyal to your business while allowing your internal teams to be engaged on the right projects.

The decision to sunset a product can be made for various reasons, but leading factors include:

  • Low Profitability: Products that consistently generate minimal revenue or have high maintenance costs relative to their returns might be discontinued to reallocate resources more effectively.
  • Outdated Technology: When a product relies on software or hardware that’s no longer efficient, cost-effective, or secure, sunsetting may be necessary to make way for more advanced solutions.
  • Market Evolution: As market dynamics and consumer preferences change, products may become less relevant, making it imperative to abandon them to invest in more promising and fruitful opportunities.
  • Compliance Issues: Products that no longer abide by industry regulations or don’t comply with new ones may need to be sunsetted to avoid legal repercussions.
  • Business Direction Shift: Mergers and acquisitions, new strategies, and waning consumer demand often signal a need to sunset a product if it no longer fits within a company’s goals and plans.

Letting go of what no longer serves your business is a crucial step in leveling up. However, not keeping customers top of mind throughout the process can cause your sunsetting strategy to backfire.

The Importance of a Customer-Centric Approach

To successfully address your customers’ needs and wants, you need to think like them. Otherwise, you risk neglecting their perspectives and opinions, which can provide insightful feedback and guidance as you determine which products should and shouldn’t be retired. By prioritizing customer needs during product sunsetting, you can retain their trust and potentially convert them into users of other products in your portfolio. Likewise, a smooth and consumer-focused sunsetting process sets the stage for future success, demonstrating that your company values consumer interests and is committed to providing them with viable (and better) alternatives.

Strategies for a Smooth Sunsetting Process

Even clouds can block a picture-perfect sunset — here’s how to gracefully retire underachieving products and minimize the risk of unwanted consequences.

Conduct a Product Evaluation

Before you render a product or service obsolete, ask yourself: Will a sunset hurt or elevate our business? It’s a loaded question, but it becomes easy to answer with a thorough evaluation of your product. For example, if you find that sales are consistently declining for the product, maintenance costs outweigh revenue, the product can no longer meet market demands, and customers are expressing negative user experiences, these are all signs that a sunset may be your best route forward.

Make sure to look at the big picture of your product’s performance — if certain features are not performing to standard, it may be better just to optimize them rather than scrap the entire product.

Transparent Communication

When you decide to sunset a product, your customers deserve to know why and how this decision fits into the broader product management lifecycle. Be open and honest about the reasons behind the decision, and clearly communicate the timeline for discontinuation and what it means for your customers. Be open to what consumers have to say about this change by encouraging feedback and questions to foster a sense of inclusion and gauge initial reactions before you finalize your sunsetting plans.

Migration and Transition Support

To minimize disruption for your customers, provide robust migration and transition support. This includes step-by-step instructions and even explainer videos on transferring data to alternative solutions or newer versions of your products. Double-check if your customer support team is well-equipped to assist customers during this period, as you may get an influx of inquiries.

Offer Alternatives

Don’t just leave your consumers stranded, or worse, seeking your competitors’ products and services. Keep them engaged with your business by providing alternative solutions to your retired product. Build up enthusiasm and interest by offering discounts or incentives for switching to alternative products to sweeten the deal. By making this transition as seamless as possible, you reduce friction and strengthen retention as your team works on creating the next best thing.

Pitfalls to Avoid

Product sunsetting comes with its set of potential pitfalls that can alienate your customers. Here are some common mistakes to be aware of and how to avoid them:

  • Vague Statements: Using vague or ambiguous language when announcing a product’s discontinuation can leave customers uncertain about the future. Instead, provide clear, concise, and honest explanations as well as next steps for clarity and understanding.
  • Neglecting Updates: Not providing regular updates as you phase out a product can leave customers feeling left in the dark. Keep your customers informed about every step of the transition so that they’re not caught off guard.
  • Ignoring Feedback: Dismissing or ignoring customer feedback during the sunsetting phase can lead to missed opportunities for improvement. Actively seek and address customer concerns to enhance their experience while building your business relationship with them.
  • Assuming Needs: Assuming you know what’s best for your customers without consulting them can lead to solutions that don’t align with their preferences. Involve customers in the decision-making process to understand their needs better and create a product they’ll love.
  • No Upgrade Path: Failing to provide a clear upgrade path to a newer product or service can leave customers feeling lost. Offer a well-defined path to transition to alternative solutions to reduce the shock factor of the change and help them quickly adapt.
  • Skipping Evaluation: If you don’t conduct a thorough post-sunsetting evaluation, you may miss out on opportunities for learning and growth. Assess the entire sunsetting process to identify areas for improvement in future transitions.

At first glance, sunsetting a product seems to be a one-and-done task. However, approaching the discontinuation of a product or service in this way can tarnish your business reputation and weaken the reliability of your offerings in the eyes of customers.

Customer Feedback and Post-Sunsetting Evaluation

Collecting feedback from your customers during and after the sunsetting process is invaluable. During the sunsetting process, you should actively seek feedback through surveys, focus groups, and direct interactions with customers. Then, once sunsetting is complete, analyze the feedback to identify areas where you excelled and where improvements are needed. These customer insights can help you refine your product management strategies and ensure smoother transitions in the future.

Sunsetting Successfully with SEI

Whether you’re a startup experimenting with prototypes or a veteran corporation wanting to upgrade your current suite of offerings, SEI has the expertise to guide you through any product sunset. Our experienced consultants understand the challenges and complexities involved in retiring a product while preserving your consumers’ loyalty and trust in your brand.

We start by walking in your organization’s shoes to grasp your current business structure, strengths, and setbacks. From there, we analyze your product’s impact and influence on your business goals to craft a unique roadmap that seamlessly transitions users from the legacy solution to its upgraded counterpart. With a focus on long-term viability and sustainable success, SEI has the resources and expertise to help your company transform what can be an intimidating and risky step into an opportunity for new growth.

Speak to an SEI consultant today to get started on your product sunsetting journey.

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