August 2, 2024 No Comments
Customer Lifecycle Is a Complete Cycle of the Customer with the Business whereas Customer Journey focuses on specific paths or interactions. Assume a customer lifecycle
Sunset is the time of day when the sun disappears below the horizon, typically in the evening. Well, I can bet, that’s not why you clicked on this article, right? Yes, you will get the answer to “What Does Sunsetting Mean in Business?” here.
The phrase “sunsetting” refers to the process when a business decides an offering is no longer sustainable or beneficial, or when it has reached the end of its lifecycle. It can be a complex process for businesses as it involves dealing with financial, legal, and emotional aspects.
That’s why I wrote this article as a brief but concise guide to help you learn about sunsetting in depth. So, without further ado, let’s get right to the point:
In a business context, “sunsetting” is the process of gradually discontinuing or shutting down a product, service, or business division. This can include ending production or sale of the product, no longer providing support, or closing the business unit after a certain period of time.
Sunsetting could be a challenging procedure for a business as the company might already have invested its resources in developing and marketing the product. However, the sunsetting process can also be a mandatory step to make place for new products that better serve customers or go along with business objectives.
Many companies include sunsetting as part of their initial plan. It could also happen due to unforeseeable events. Let’s check some of the usual reason that causes Sunsetting:
If you look closely, you will notice that even the most successful and well-known companies have a small corner of products biting the dust. These are non-profitable products that ultimately go to sunset.
No matter how popular a product or service is, it might lose its utility over time. Also, older versions might offer a feature that is incompatible with new versions. A manufacturer might sunset a product considering its poor usefulness.
Despite having a large amount of usage and user base, sometimes product maintenance costs get too high. Companies sunset these products and services to avoid wasting resources in the long run.
Sunsetting can occur for a variety of legal reasons, including patent expiration, the need to comply with new laws or regulations, or legal conflicts over intellectual property or other issues.
When a business changes its overarching goal, it brings changes to its product strategy. As a result, some products contradict their core values. So, they are sunsetted to avoid attracting the wrong kind of attention or customers.
A business might have an obsolete product, an app built on an older system, or a free trial that draws attention away from paid versions. On such occasions, a business or company makes a decision to move forward with new products while sunsetting the older ones.
Delaying the sunsetting of a product’s life cycle can have severe consequences for a company. That’s why it is critical for a product manager to take the initiative to sunsetting a product at the right time. Instead of relying on gut feeling, the following factors might help to decide on sunsetting:
After a series of brainstorming, fact-checking, interviews, and consideration of the above-mentioned aspects, product managers usually take the decision to phase out a product from shelves therefore Sunsetting.
Let’s go through the stages
To make the right decision, the product manager collects and analyzes data, such as if it is necessary to sunset a product, how many customers will be impacted by it, their importance, their other purchases, the revenue that will be lost for sunsetting, and more.
Once the product manager finalizes the decision for sunset, then comes the communication phase. It takes both internal and external communication. A comprehensive plan for communication will help manage the effect of the sunset.
While you should give your marketing team and other teams plenty of time before sunsetting, you should also notify your customers. You can reach them using the following communication channels:
After giving a heads-up to internal teams and end users, then comes the development phase. This is where changes begin to start gradually. All planned strategy of discontinuing the product or service starts to be visible in this period.
Like every other sector of business, it is important to make proper documentation of every step of Sunsetting. The last step in sunsetting a product or service is to measure the results to see whether the changes made have the desired impact or any unwanted effects.
As I mentioned above, sunsetting might be a complicated process for a business as it impacts many areas. It may cause financial, legal, and emotional difficulties. Let’s go over some of the most typical issues that may arise while sunsetting:
Sunsetting might cause a financial impact as customers might require refunds, expenses for transitioning customers toward a new product, losing revenue from the Sunsetting product, costing for writing down the value of remaining inventory, etc.
Sunset causes disruptions for loyal consumers who have relied on a product for a long time. This might cause them inconvenience or force them to find a new option. So, it is most important to provide them with a new solution to minimize disruption as much as possible.
Of course, legal concerns are a major red flag when it comes to sunsetting. Contractual obligations, intellectual property, data privacy, and regulatory compliance all need to be taken into account while offering a sunset.
Customers may find it tough to say goodbye to a product or service that has been a part of their lives for a long time. Employees, on the other hand, might be emotionally attached to the item, might need assistance finding other positions within the company, or might even lose their jobs.
A company should have empathy for these emotional difficulties of customers and other stakeholders and provide support as needed.
Let’s face the hard truth: a Sunset offering is not a pleasant experience. It might lead to significant anomalies in the financial, emotional, and legal sectors. However, careful planning helps to minimize the toll it might take. These steps might come in handy in sunsetting:
Sunset offerings might lead to dissatisfied customers or lost employees. It’s important to notify your customers and employees beforehand that the service will be discontinued. This gives them time to be prepared and to find alternative solutions.
Even if there is a financial issue or a change in company strategy, let your customers and employees know the actual reason for sunsetting. Transparency will help you to be trustworthy.
If it’s in your hand, offer your customer an alternative solution and different roles for your employees. This can make the transition easier and lessen any negative impacts on your customers and employees.
So, this leads to the end of this article. Throughout the journey, I have discussed what does sunsetting mean in business, reasons for sunset offering, when to consider sunset, and most importantly, ways to sunset an offering.
Sunsetting a product may be challenging and stressful for a business. The good news is that, with a proper plan and execution, you can ensure that you’re prepared to support and transition those impacted as smoothly as possible.
Customer Lifecycle Is a Complete Cycle of the Customer with the Business whereas Customer Journey focuses on specific paths or interactions. Assume a customer lifecycle
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