The flip side is that we know that customers can grow fond of services and want to keep using them. Customers may have an emotional attachment to a service. This attachment reflects the meaningful role the service plays in their lives, whether through memories, identity, innovation, cultural significance, quality, or community. Read more in my earlier blog: Why services should die and what makes the process so difficult.
Handle with care! Curating your service portfolio
I’ve learned that once you start the end-of-life work, it benefits your organisation if you can:
- Be open about the business logic behind the decision.
- Work together with your customers to understand what is truly valuable to them.
- Make the end-of-life planning together as a cross-functional team.
I have found the following tactics valuable and useful when organisations are planning to curate their service portfolio.
- Conduct a comprehensive audit – Be data-driven when curating your service portfolio and identifying core offerings. Take a look at the competitive landscape. Use metrics such as user satisfaction and cost-benefit ratio. I don’t want to underestimate how hard this can be. However, be honest with yourself. A service may be more important to you than to your customers or to your business. Sometimes you just have to quit if the data says so.
- Focus on quality over quantity. Be strategic and seek to understand what keeps your customers engaged and satisfied. Focus on the intrinsic values and what truly matters.
- Streamline service categories and reduce variants – Limiting options is crucial in reducing the effort customers need to make decisions
It matters how it ends
According to the peak-end rule, people judge an experience largely based on how they felt at its peak and at its end. These moments are more important than the total sum or average of every moment of the experience. After you’ve made your decision on what services need to go and when, start planning. Answering these questions may help:
- Are you going to do a phased shutdown or pull the plug at once? Consider the magnitude of the disruption. Do customers need to transfer their valuable assets, for example, photos, playlists? Does your company need time to transfer resources or technologies?
- What kind of user support and assistance is needed before and after the change? Are you going to provide possibilities for self-service?
- How do you want to engage with the loyal customer community? Prepare for transparent and clear communication in each stage of the change.
- Is there a possibility for partnerships and collaborations? Could the service live on in another form, in another company?
- What metrics you need to monitor and evaluate during and after the change? Example: IKEA streamlined its product range by focusing on best-selling, high-demand items, eliminating underperforming products. Decisions were driven by a need for better inventory management, cost control, and simplifying customer choices. Measures used were sales, profitability, customer satisfaction, alignment with core brand values of affordability, functionality, and sustainability.
Reducing choices is a smart business strategy
By simplifying product selection or service offerings, a company can enhance customer clarity, improve operational efficiency, and focus resources on delivering exceptional value in its core offerings. There are some famous examples of this, for example, Apple reducing its product portfolio to focus on Mac, iPhone, and iPad. Or, Netflix, ended the DVD rental service, putting all focus on streaming which led to massive growth. A strategic approach can lead to increased customer satisfaction, stronger competitive positioning, and sustainable business growth over time.
So, check your portfolio, make data-driven decisions on what needs to end, and start curating and ending!
If you want to read more:
Anthony Ulwick, What Customers Want: Using Outcome-Driven Innovation to Create Breakthrough Products and Services, 2005
John Maeda: The Laws of Simplicity
Barry Schwartz: The Paradox of Choice: Why More Is Less