The innovation-obsolescence cycle
A product peaks within a year or two, then falls around 30% a year. Every launch ages the rest of the portfolio, so you launch to stand still.
Argente, Lee and Moreira followed product sales across their lives and found a shape every product manager recognises but few sales directors plan for. A product peaks within a year or two of launch and then declines at around thirty per cent a year between its first and fourth years. Worse, each new launch cannibalises the rest of the portfolio, so a firm has to keep launching simply to stand still.
For a key account this has one consequence. The offer you built for the customer three years ago is not the offer they are buying today, even if the invoice looks the same, because their alternatives have moved. Offer Development and Innovation is not a project. It is the first stage of a cycle that has to turn as fast as the products age.
Set out in full in: Creating Customer Value Propositions with AI (Kogan Page, 2027), chapter 1.
Related terms
The five pressures
Volatility, changing buyers, machine buying, shorter product lives and geopolitics, arriving together. Suppliers have to trim their sails more often.
Offer Development and Innovation (ODI)
The capability to repeatedly create propositions a competitor cannot copy. Three phases: needs analysis, offer ideation, value proposition.
Offer ideation
Diverge before you converge. The machine's gift is width; the cull is yours.
See the method run on one real account in three days: the One Page Proposition.