#24 Product Cannibalization

Ever launch a new product, pat yourself on the back for that big unveiling, then realize... it’s basically stealing sales from one of your existing lines? You’re not alone. This phenomenon—product cannibalization—happens all the time. Instead of expanding your overall revenue, the new product just robs the old one of its glory.

But here’s the twist: in many cases, that’s exactly what you want. Because if you don’t cannibalize your own lineup strategically, a competitor will happily step in to do it for you.

Two Faces of Cannibalization

1. Constructive Cannibalization

Not all cannibalization spells doom. Some of the world’s most successful brands actually embrace it. Think about Apple: they repeatedly release new versions of their core products, even though it means older models lose steam. Why? Because the updated versions keep customers excited, boost revenue, and protect market share. If Apple didn’t introduce something new, Samsung or another rival would swoop in and snatch those customers.

So, when new product sales outweigh the losses from the old product—and overall revenue goes up—cannibalization can be a strategic win.

2. Destructive Cannibalization

On the flip side, destructive cannibalization drags down your bottom line. It happens when sales of the old product collapse faster than the new product ramps up, causing a net revenue dip. Common culprits: confusing product positioning, poorly timed launches, or a pricing strategy that makes your older product look downright unattractive.

How to Launch So Cannibalization Works For You

1. Measure Market Demand & Differentiate

First, make sure your shiny new offering is truly filling a gap or enhancing an existing experience—not just duplicating it.

Example:

• Stress Relief Tincture: Marketed for acute stress situations—fast-acting relief for high-pressure jobs or last-minute deadlines.

• Relaxation Support Tincture: Suited for ongoing daily stress, sleep issues, or consistent anxiety relief.

The overlap is intentional, but the angle is fresh. You’re not just replacing “Relaxation Support” with “Stress Relief”; you’re expanding your customer base and meeting more needs overall.

2. Price for a Win-Win

If you slash the older product’s price too aggressively, you risk devaluing the entire line. Instead, keep its price steady and position the new product as a premium or alternative option. That way, curious customers can upgrade or switch without gutting the profitability of your existing SKU.

Example:

• Set the Stress Relief Tincture at a slightly higher price point than Relaxation Support Tincture—signaling it’s a specialized add-on rather than a discount replacement.

3. Smart Cross-Promotion

If you already have a loyal audience for the older product, let them in on the new one in a way that adds value instead of replacing their favorite product.

Example:

• Encourage existing customers to bundle both tinctures for a comprehensive stress-management regimen.

• Target them with personalized emails that highlight how the new product complements their routine.

Telling the Good from the Bad: Tracking Cannibalization

1. Check Sales & Revenue Trends

If you see old product sales nosedive after the new product launch—but total revenue stays the same (or goes up)—that might be healthy cannibalization. If total revenue doesn’t budge (or falls), you’ve likely overcooked your own goose.

2. Compare Key SKUs

Line up the numbers on your old vs. new items. If Old Product’s revenue decline is exactly mirrored by New Product’s upswing, you’re shifting buyers instead of attracting new ones.

3. Understand Your Customer Segments

Did the new product draw a fresh crowd—or simply lure your current buyers away from an old favorite? If it’s the latter, decide whether that’s acceptable within your overall brand strategy (and keep an eye on total revenue).

4. Watch the “Stickiness” Factor

A genuinely successful launch will draw in higher-value customers who come back for more. If the new product doesn’t encourage repeat purchases, you might just be juggling the same revenue around.

Wrapping Up

Cannibalizing your own products can feel risky—no one likes to see a beloved SKU overshadowed. But in a fast-moving market, fresh offerings are essential to keep people excited and stay ahead of the competition. The trick is to do it strategically: differentiate your new product, price it so it doesn’t undermine your old offerings, and then watch the data closely to ensure you’re growing overall revenue instead of just reshuffling it.

After all, if you don’t steal your own spotlight, someone else will. By paying attention to the numbers—sales trends, SKU comparisons, and customer segments—you’ll know exactly when cannibalization is working in your favor (and when you need a course correction). So go ahead, launch that exciting new product. Just be sure you’re outsmarting yourself—and your rivals—every step of the way.

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That’s it for this edition!

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Cheers,

Alex