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How can you best discontinue a product?

Posted on August 25, 2008 · 5 Comments

Question: What are best practices for discontinuing a product?

We have decided to End of Life a Product from our portfolio as there is another improved product that does the same job and have an upgrade path from the old product. We are a channel driven organization and operate in B2B space. What are the things that we have to have in mind to EOL the product? We are also doing some government deals that take a long time to end/change which involve the product that we are trying to EOL.

Answer from Greg Cohen of 280 Group:
There are really a number of factors to consider, such as whether

  • the new product will cost less, more, or the same.
  • the migration is very involved or relatively transparent to the customer
  • there is a cost to migrating. (e.g. Does the customer have to pay the channel partner for migrating?)
  • the customer needs to train their staff, rewrite interfaces or other customizations, change any processes.
  • the company is willing to support the legacy product for an extended period of time.

Understanding the above would influence the approach. But there is one aspect I will assume and that is:

90% of the current customers are satisfied by the legacy product and do not consider the benefits of the new product worth the effort and/or cost of migrating.

With that, I would offer the following advice:

  1. Brief the channel well in advance of any public or customer announcement. And arm them with everything they need to know to address any customer concerns.
  2. Focus communications on customer and channel business benefits respectively. Don’t focus on features or benefits to your company. Having some reference customers could also prove beneficial.
  3. Meet all contractual obligations and accept the fact that the govt accounts will require longer term planning and execution.
  4. Work with each channel partner to manage the timing of each account migration. Thus, this will take dedicated account and project management time. Budget appropriately and develop a consistent and repeatable process. You need to provide the framework for your channel partners and the customer.
  5. Depending on urgency of migrations and costs, you might consider offering incentives to all customers and channel partners who complete their migrations by a given date.

5 other answers so far ↓

  • Adam Hazdra // Sep 3, 2008 at 1:20 am

    We were facing the same problem and I must agree with Mr. Cohen on the importance of early communication.

    We also uderestimated the clear communication of benefits of the new solution which resulted in misunderstanding and lack of support among our sales force.

    Two more thing come to my mind. First, gather all the information about the ending product (it can affect a lot of marginal places). Second, create the next product with EoL in mind (time-limited contracts, continuous innovation as product’s/ customer’s advantage etc.)

    Good luck!

  • Steven Haines // Oct 20, 2008 at 1:16 pm

    Good points on discontinuation. Other things to think about focus on the ‘de-operataionalization’ of systems. Including decommissioning product ordering and billing codes, as well as related deactivation of related accounting system elements.

    Anything tangible? Think about last-time orders for parts and stocking additional documentation.

    Lastly, think about pricing programs during the discontinuation cycle. Increasing prices for maintenance on software is a popular way to encourage rapid migration.

    Steven Haines
    Author: The Product Manager’s Desk Reference

  • Cheryl Perkins // Jul 16, 2009 at 1:56 pm

    Is there a template that addresses the steps of decommissioning a product available?

  • Steven Haines // Jul 16, 2009 at 2:59 pm

    Cheryl,

    There is a chapter in my book, with a guideline for discontinuation. However, you can make one based on the format and flow of a Business Case. Instead of investment, it’s a divestiture. Beware of contractual commitments, inventory (if you have), intellectual property, migration, and of course, people who have to take part from a cross-functional perspective.

  • almustapha // Jan 3, 2013 at 4:33 am

    iam i to consider unit price per product when deciding to discontinue its production?

What do you think?