In the ever-evolving landscape of the SaaS industry, navigating through the various stages of a product's life cycle — introduction, growth, maturity & decline — is like a journey across diverse terrains, each with unique challenges and opportunities. Among these stages, the maturity stage of the product life cycle is one of the most pivotal and intriguing. It's a phase where the initial euphoria of growth and expansion starts to plateau, signaling a critical moment for businesses to reassess, strategize, and innovate.
Imagine a river where salmon tirelessly leap against the current, striving to reach their destination. Similarly, in the maturity stage, SaaS companies must exert effort and ingenuity to avoid being swept downstream by market saturation and competition. This stage is not just a test of endurance but an opportunity to redefine the product and explore new horizons.
In this article, we delve into the intricacies of the maturity stage of the product life cycle. Through real-world examples and practical insights, we aim to equip SaaS businesses with the knowledge and strategies to navigate this crucial stage successfully and set the stage for continued success and innovation.
What are the four stages in the product life cycle?
Before we dive deeper into the maturity stage, let’s quickly review the full journey of a product through its life cycle. Each stage comes with its own goals, challenges, and strategies.
- Introduction
This is the launch phase, where the product is introduced to the market. The focus is on raising awareness, attracting early adopters, and gathering valuable feedback. Sales are typically low, and marketing efforts are intensive to build initial traction. - Growth
In the growth stage, the product begins to gain traction. Sales increase rapidly, the customer base expands, and competition begins to heat up. The goal at this point is to scale effectively while continuing to meet the evolving needs of customers. - Maturity
The product reaches its peak market penetration. Growth begins to slow down as the market becomes saturated. At this stage, the focus shifts from acquiring new customers to maintaining market share, standing out from competitors, and enhancing the product with new features. - Decline
Eventually, the decline stage of the product life cycle comes when demand starts to decrease, often due to changes in customer needs, new technologies, or better alternatives. Companies must then decide whether to redesign and reposition the product, target new markets, or prepare to phase it out.
Now that we understand where the maturity stage fits within the broader product life cycle, let’s take a closer look at what makes this stage so critical — and how businesses can navigate it successfully.
Characteristics of maturity stage in the product life cycle
The maturity stage in the product life cycle is the third phase when a product has captured most of its potential market, growth slows, and competition becomes fiercest. At this point, your product is no longer new — it's a mature product, widely adopted, and your main focus shifts from gaining new customers to defending your market share and extending profitability.
Key characteristics of the maturity stage include::
- Sales growth plateaus as the market becomes saturated.
- Customer acquisition slows because most people who need your product already have it.
- Price competition intensifies, and weaker competitors may exit the market.
- Innovation and differentiation become critical to maintaining relevance.
On the product life cycle curve, the maturity stage is the point where the steep climb of growth flattens out — reaching what’s often called point "A."
From here, companies face a crucial decision:
- Leap forward by finding new growth opportunities (through product updates or market expansions), or
- Slide into decline if they fail to adapt.
Recognizing these signs is critical because the maturity stage is a turning point. If these patterns sound familiar to you, there’s both good news and bad news.
Good news:
If you've reached the maturity stage, you’re part of the top 10% of startups that survive the initial phases (according to Neil Patel).
Mature products typically enjoy:
- Peak market penetration.
- Maximum profitability.
- Strong brand recognition and resources to drive future moves.
Bad news:
Growth will slow naturally as you run up against the limitations of your market size or market share.
Research from Matthew S. Olson and Derek van Bever (Stall Points) shows that once a company encounters a major growth stall, it has less than a 10% chance of fully recovering. Most move from maturity into decline unless they act proactively.
This makes the maturity stage a critical pivot point for your SaaS product.
The strategies for the maturity stage of the product life cycle
While every company’s circumstances are unique, there are three strategies that help to regain growth during the Maturity stage:
- Product Development: Activities such as creating new products and improving the existing products with improvements and developments.
- Market Development: Includes localization for different locations and selling to the new audience segments.
- Diversification: This can be made by entering a new market via acquisitions or developing brand-new products for a new audience.
We'll consider those strategies in practice. Slack and Zoom are the first two SaaS companies that come into mind as examples of maturity — they are reaching the maturity stage of the life cycle before our eyes because so many people already have their accounts (or their competitors' accounts.)
Both companies have shown stellar growth driven by the freemium pricing model. Since they make software for remote work, they have been helped rather than harmed by the pandemic. Both compete with giants — Google and Microsoft build video and communication capabilities.
However, one company is riding the year high with $21.7 million of net revenue, while the other, staggering under $91 million of losses, has ended up selling itself to a strategic acquirer.
Let's watch what maturity-stage challenges both companies faced and their moves to cope with them within product development, market development, and diversification strategies.
Product development strategy for mature SaaS
The key idea here is to update the product to keep up with its expanding user base and deal with emerging issues and new requests. It allows you to hold the current market share and prolong the maturity stage.
Security issues became one of the main concerns for Zoom in 2020. A series of high-profile security mishaps — including Zoombombing, a vulnerability that led to cameras hijacking, and routing calls through China — resulted in a great loss of credibility.
Zoom maneuvered quickly to address privacy concerns:
- On April 1, Zoom CEO Eric Yuan announced a 90-day plan to channel all engineering resources into fixing safety and privacy issues.
- Acquisition of Keybase, a startup that specializes in end-to-end security.
- Recruitment of Alex Stamos, former Facebook security executive, and adding the end-to-end encryption.
- Two-factor authentication as an additional security level.
In 2020, Slack was forced to figure out ways to rapidly scale its infrastructure instead of refining its product and building out the features that users wanted. However, there was at least one long-awaited update.
Mashable welcomed an updated app with the headline "Slack's redesigned mobile apps are less likely to make you bang your head against a wall," and I couldn't agree more with that wording. Don't get me wrong, Slack is a great app, but it should have gone more mobile-friendly long ago.
Don't be like Slack. We at Eleken can help you create a mobile app that attracts potential users and doesn't scare them away.
Learn more on how we work – read our case study on designing a mobile app for HabitSpace that helps people track their habits and improve their quality of life.
Market development strategy for mature SaaS
With a market development strategy, you expand your existing product into new customer segments or geographies. The lockdown helped both our objects to accelerate the global adoption that was finally slowed down due to the tough competition in the maturity stage.
Thanks to its freemium model, Zoom has acquired a large audience among individual users and small/medium-sized businesses. However, being popular with the masses doesn't necessarily lead to more income — the largest revenue segment comes from large enterprises.
Corporate users not only tend to pay more — they're less likely to cancel the service when, thanks to vaccines, in-person meetings become possible again. And looks like Zoom has lost that solvent customer segment.
A number of prominent companies, including Ericsson, Bank of America, and Tesla, decided to avoid the service over security concerns. Microsoft Teams and Cisco's Webex took advantage of the situation and started the fight for the enterprise segment with one another.
Slack started out as a favored tool among quite a narrow segment of developers and corporate IT departments. Its market expansion strategy was to build a brand head and shoulders above the competitors so that employees evangelized Slack within their organizations, demanding management to buy the app.
Over the last years, Slack has been working to gain traction with a wider, more general business customer base beyond IT in verticals such as education, customer support, and human relations. Here, with more hierarchical companies, the viral bottom-up adoption turned out to be unable to compete with the massive distribution system of Microsoft Teams, for instance.
Diversification strategy for mature SaaS
To jump-start a new cycle of growth after reaching maturity, companies enter a new market with a new product. Within this strategy, our two objects took the opposite courses.
For Zoom, the greatest danger that pushes the company into diversification is the overblown video conferencing market. It out and will inevitably deflate to a greater or lesser extent as soon as the pandemic gets left behind. The company's stock dropped nearly 20 percent in November after the positive vaccine news.
So Zoom builds new products around its core tool to jump from maturity into the new growth curve as a remote communication ecosystem. The potential revenue streams lie in new webinar capabilities, Zoom Rooms for business, and cloud-calling Zoom Phone solutions. The beta release is running for OnZoom, a marketplace for video events that enables ticket sales.
Slack's life as a Silicon Valley underdog ended in 2016 when Microsoft Teams entered the game by copy-pasting Slack's basic design. While Slack was fighting for each newcomer, Microsoft played dirty, including Teams, in its huge 365 bundles without increasing the price — it took Teams from zero to 115 million users in no time. The integration is seamless since most enterprises are already paying for that bundle, like, forever.
Slack's biggest downside in its maturity stage is its standalone collaboration tool competing with an enterprise collaboration platform. Consequently, companies using Slack need to pay extra for other tools if they want to make prezzies, send emails, or work with spreadsheets.
Unlike Zoom, which builds supporting tools around the core one, Slack attempted to join an external suite of business solutions and offer its own bundle similar to Microsoft Office.
In 2018, the company partnered with Atlassian, which owns a project management software ecosystem that includes Jira, Trello, Bitbucket, Confluence, and a number of other tech solutions. Nowadays, after being acquired by Salesforce, Slack has a new chance to fight back against something as significant as Microsoft Teams. So, place your bets.
Wrapping up
Navigating the maturity stage of the product life cycle is a defining moment for any SaaS business. Although growth may plateau, this stage offers a wealth of opportunities for reinvention, innovation, and expansion.
Strategies like product development, market expansion, and diversification are practical pathways to extend a product's lifespan and set the stage for renewed success. The experiences of Zoom and Slack show that with the right moves, mature products can leap into a new growth cycle instead of sliding toward decline.
At Eleken, we understand the challenges and opportunities that come with the maturity stage. Whether you need a product redesign, new feature development, or a fresh UX strategy to re-engage your users, we’re here to help you unlock new potential and future-proof your SaaS business.
Let’s collaborate to ensure your product not only survives but thrives — even when the initial growth surge slows down.
