It was revolutionary when you first introduced it. And it sold like hotcakes. But now other companies have jumped on the bandwagon with similar offerings. Your star product is now waning. Is it time to offer something new or should you keep it around? Here are some points small business owners should consider now that their once popular product is in decline.
This situation describes the last stage in a product’s life cycle—decline. It’s characterized by a general decline in a product category. For example, CDs once enjoyed a significant percentage of music sales. But with the availability of digital download services, CD sales have fallen significantly.
Generally, the options are to gradually phase the product out or to discontinue it immediately. Your choice is likely to depend on whether you think there is still a limited demand for it.
If there’s still a market, here are some options to consider:
- Downsize – You’ll want to reduce the options in your product so you’re only producing limited inventory. Perhaps it is only available in certain colors, sizes, or with no options. If it’s a service you are marketing, you might make it available only by appointment or during non-peak hours.
- Slim Down – Reduce where you offer your product or service. If you offer it in multiple locations, make it available in fewer stores. Some businesses choose to market their remaining inventory online where overhead costs are often less.
- Sharpen Your Pencil – Price competition is strong during this phase so you will likely consider additional price reductions, where it makes sense. Some companies use it as a loss leader to attract customers to newer offerings.
- Set a Reminder – Promotional efforts during this stage should concentrate on reminding customers about the uses of this product. The goal is to keep it visible to your target market. Reaching out to past customers might remind them to re-order based on their favorable past experience.
Ultimately, most businesses are working on their “next greatest thing “ to offer customers. But you may be able to transition to the new product by managing the existing one through its decline stage.