Maturity Stage of Product Life Cycle: Three Strategies to Stay on Top
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In the ever-evolving landscape of the SaaS industry, navigating through the various stages of a product's life cycle is like a journey across diverse terrains, each with unique challenges and opportunities. The maturity stage of product life cycle is one of the most pivotal and intriguing stages in this journey. 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.
Characteristics of maturity stage in the product life cycle
The product life cycle curve explains the typical evolution of any successful product. Starting from the introduction stage of the product life cycle, early adopters provide the momentum behind uptake during the growth stage of the product life cycle. The followers swiftly catch up, leading to an upward trend, and finally, the curve flattens as the increasing adoption leads to saturation. In broad terms, this is the definition of the maturity stage in the product life cycle.
You climb the curve as high as possible, and when you're at point "A," you take a leap to the new growth or get ready to slide down to a decline stage of the product life cycle.
A quick check to see if you're heading your point "A ."How many points from the list below describe your company's situation?
- Customer acquisition is slowing since most people who need the product already have it.
- The lifetime value of new customers decline.
- Your focus moves from educating and building brand awareness toward winning customers from competitors.
- New entrants disrupt the market while weak companies can’t sustain competition.
If all those characteristics of the maturity stage of the product life cycle sound familiar to you, we’ve got some good and some bad news.
Good news: Neil Patel says that 90% of startups fail, and you definitely belong to the remaining 10%. If you've reached a maturity stage of product life cycle, you've reached a peak in market penetration. It also means a peak in profits and means you have some resources to recover from your startup fight for survival.
Bad news: Growth will slow down as you run against your core product's natural market size or market-share limits. As Matthew S. Olson and Derek van Bever write in their book Stall Points, once a company runs up against a major stall in its growth, it has less than a 10% chance of ever fully recovering. The remaining 90% move from maturity to decline, so you step into the mature enterprises' fight for survival.
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 — 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.
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.
Navigating through the maturity stage of the product life cycle is a critical juncture for any SaaS business. It's a stage where growth may start to plateau, but it's also ripe with opportunities for reinvention and expansion. Strategies like product development, market development, and diversification are not just theoretical concepts but practical pathways to inject new life into your product and business. The stories of Zoom and Slack exemplify the dynamic nature of this stage and the necessity for continuous innovation and adaptation.
At Eleken, we understand the complexities and challenges of the maturity stage. We believe that exceptional UI/UX design and strategic product enhancement can play a pivotal role in propelling your SaaS product into its next growth phase. Whether it's refining existing features, exploring new market segments, or venturing into entirely new product territories, our team is equipped to provide the design expertise and creative insights needed to keep your product relevant, competitive, and growing. Our experience in designing for various stages of the product life cycle, especially the critical maturity phase, positions us uniquely to help your SaaS business thrive and leap into new growth opportunities. Let's collaborate to ensure your product not only survives but thrives in its maturity stage and beyond. Contact us today to start crafting the future of your SaaS product.