Tag Archives: sunsetting

Sunsetting a Product: Pricing

It may sound odd that you need to consider pricing when sunsetting a product or platform but you do – at least in some form.  This is the final installment in a series on decommissioning or sunsetting a product.  First you must get data to know exactly what the situation is; second, you must craft your communication plan, and finally, you need to consider the financial implications.

Refunds

If you are truly turning a service off, or ‘going dark’, you may have to consider whether refunds will be required for your existing customers.  If your business model is one of pre-payment, then you need to look into contractual obligations, notice periods and financial true-ups.  The potential impact of refunds may even dictate your sunsetting strategy, so you can minimize pay outs.

Let’s consider an example.  The company charges annually for the following year.  For example, on November 1st, you are charged fordollar_sign2 November 1st to October 31st of the following year.  The company will need to research the month with the highest number of renewals and you might base your decommissioning date based on that information to minimize the refunds.  If sunsetting this product is a large and complex effort, you might consider a rolling project where customers are moved off of the product or platform as their services expire contractually.  This approach can take up to a year to complete, but that might be ideal in certain circumstances.

Sunsetting a product: Get Data

As a Product Manager, one of the efforts that we are often asked to consider is the decommissioning or sunsetting of a product or platform.  It is not always a fun task, but it is very important to the business.  This blog series is dedicated to the steps that a strong Product Manager needs to consider when researching this kind of issue.  The first and most important thing to do is to get data.

If ever there was a project that should NOT be executed based on gut feel, this is it.  You need data to make sure you make the most sunsetprudent decision possible.  There is no way to sunset a product without upsetting some aspects of your business, so this is not something that should be taken lightly.  What kind of data do you need?

Customer Analysis:

You need solid data from the financial and CRM systems of the company to answer the following questions:

  1. How many customers are impacted?
  2. How important are those customers?
  3. What other services have they purchased?
  4. What prices are they paying?
  5. What is their lifetime value?