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  • Are Legacy Products Hurting Business Growth?

    bookmark_border Gee Ranasinha    access_time  

    How does your organization deal with legacy products? You know, products that have outgrown their usefulness to the market? How long does it take before you pull the plug on products, services – or features – that are past their prime, or maybe never made much of an impact in the first place?

    Why the questions? Well, I know a company that sells a product that was originally developed more than 20 years ago.

    You'd think that's a commendable thing, right? You'd think the product's still selling because of the forward-thinking nature of the company, how it was ahead of its time, how it anticipated the market so much in advance that, two decades later, the product is still selling.

    You could be excused for thinking that. Except that there's one vital piece of information that I haven't shared with you until now: the product in question doesn't sell.

    The company hasn't sold any of this particular product in years. The product's outdated in its assumption of how it will be used. It's also more difficult to use when compared with competitive products that sell for a tenth of the price (yes, ten times cheaper).

    Yet the product steadfastly remains on their pricelist.

    Why? Because the company concerned is of the opinion that, since the product has paid for itself many times over since it was introduced, it doesn't really cost anything to keep it alive. And if a customer ever comes along that wants it (however far-fetched that may be) they can still buy it. Win-win, right?

    If You're Not Innovating, You're Stagnating
    Without getting into the argument whether the very action of keeping a legacy product in your inventory costs you money or not, there's something else at work here.

    I'm talking about the various ways that your audience forms an opinion on your brand. It's how relevant (or otherwise) your value proposition is seen in their minds, based on their perception of your agility as an organization.

    If You Don't, Someone Else Will
    Some businesses, like the one in my example, take the position of hoarder. Product development is only ever a one-way street, with more and more being added every year while nothing gets removed. The inevitable result is that the once lithe and nimble speedboat has become a heavy, slow, and cumbersome oil tanker. Getting anything done now takes forever and it's just a matter of time before the whole thing sinks.

    Other businesses, in contrast, seem to almost revel in their willingness to adopt new ideas, technologies or design that might make their legacy products obsolete, even if it has the effect of cannibalising existing business models. They take the position that if they're not the ones doing it, their competition certainly will.

    How long does it take for decisions to be made that rupture the past, for the good of the future? How long did it take you to stop shipping boxes of your software and offer a direct download from your website? How long did it take to stop charging for Wi-Fi access at your hotel?

    Today there are only two options: you're either trying to work out how to keep things the way they are, or you're looking at how to to change things. If you're not looking at how to keep that product going, you should be looking at how to replace it. There's no middle-ground.

    Antiques Are For Museums
    In an environment where competition is scarce, maintaining the status quo has quantifiable value. It's important to keep those legacy products, services, or features around. There's no need in upsetting existing customers if you don't have to, right? Why upset the apple cart?

    But today's environment isn't one where competition is scarce – it's quite the opposite.

    No matter what business you're in, I'm betting your industry is advancing at a faster rate than ever before. And the faster it advances, the greater the likelihood that someone will come along who's happy to live without all that legacy baggage that you're hanging on to with all your might.

    Unencumbered by what's gone before, they create something that redefines the 'solution' to the customer problem. They disrupt the industry, and the landscape.

    They've made everything you're doing suddenly look 100 years old.

    Source: KEXINO.


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