Success Becomes a Trap: How Brands Can Regain Product-Market Fit

By
Sue Duris
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Success Becomes a Trap: How Brands Can Regain Product-Market Fit

Even established brands can lose product-market fit as customer needs evolve. Explore warning signs, recovery strategies, and how CX, digital reinvention, and customer-driven innovation can help companies stay relevant and resilient.

The irony of business success is that the very achievements that make you an established brand can also become the anchors that drag you away from your customers and could create issues down the road. 

Product-market fit (PMF) isn’t just for startups; it is something that even the most successful companies must pay attention to and can lose sight of as markets evolve, customer needs shift, and new competitors emerge.

The Silent Erosion of Product-Market Fit

For established brands, losing PMF often happens gradually, like a slow leak in a tyre. Unlike startups that either achieve PMF or die quickly, established companies have the resources to mask declining fit through increased marketing spend, aggressive promotions, or relying on brand equity built in better times.

What makes this particularly relevant for customer experience professionals is the intimate relationship between product-market fit and customer experience (CX). 

PMF isn’t just about having the right product—it’s about delivering value in ways that resonate with how customers want to engage, purchase, and derive benefit from your offerings. When customers struggle to see value in your product or find it difficult to achieve their desired outcomes, you’re simultaneously experiencing both a PMF problem and a CX problem. 

The two are so intertwined that improving one inevitably impacts the other, making CX teams uniquely positioned to both detect early warning signs of declining PMF and drive the customer-centric innovations needed to regain it.

Warning Signs Your Brand Is Losing PMF

The symptoms are often subtle but telling:

  • Declining organic growth despite increased marketing investment.
  • Rising customer acquisition costs with falling retention rates.
  • Increasing reliance on discounts to drive sales.
  • Growing disconnects between product features and customer feedback.
  • Market share erosion to newer, more agile competitors.
  • Internal conversations focusing more on competition than customers.

Three Strategic Pathways to Recovery

When established brands recognise they’re drifting from product-market fit, they typically have three strategic options: product pivots, digital reinvention, or customer-driven innovation. Each requires different approaches and timelines.

  1. Product Pivots: Reimagining Your Core Offering

Product pivots for established brands are fundamentally different from startup pivots. You’re not just changing direction—you’re redirecting a moving ship with existing customers, brand equity, and market expectations.

Strategic Approach:

  • Gradual vs. Radical Pivots: Most successful established brand pivots happen incrementally, allowing you to test new directions while maintaining core revenue streams.
  • Leverage Existing Assets: Use your brand recognition, customer base, and distribution channels as launching pads for new directions.
  • Portfolio Strategy: Consider launching new product lines alongside existing ones rather than an entire replacement.

Success Example: Microsoft’s transformation from a software licensing company to a cloud-first, subscription-based platform illustrates successful pivoting. Under Chairman/CEO Satya Nadella’s leadership, Microsoft shifted from defending Windows to embracing cross-platform strategies, resulting in its market cap growing from $300 billion to over $3 trillion.

Key Lessons:

  • Started with Azure cloud services while maintaining Windows revenue.
  • Gradually shifted Office to subscription model (Office 365).
  • Embraced former competitors like Apple and Google as partners.
  1. Digital Reinvention: Technology as the Bridge Back to Customers

With business leaders increasingly recognising AI’s transformative potential—as evidenced by 78% of organisations now regularly using generative AI in at least one business function—digital transformation has become a critical pathway for regaining customer relevance.

Implement a digital reinvention framework like the below.

The Digital Reinvention Framework:

Customer Experience Layer:

  • Implement AI-powered personalisation engines.
  • Create omnichannel experiences that meet customers where they are.
  • Use data analytics to predict and respond to customer needs proactively.

Operational Layer:

  • Automate routine processes to free resources for innovation.
  • Use real-time data to improve product performance.
  • Implement agile development cycles to respond faster to market changes.

Business Model Layer:

  • Explore subscription and service-based revenue models.
  • Create platform strategies that connect customers directly.
  • Develop data-driven insights as new value propositions.

Success Example: Nike used a very similar model to transform itself from a traditional athletic wear company to a digital-first brand, demonstrating effective reinvention:

  • Nike Run Club and Training Club apps: Created direct customer relationships and valuable usage data.
  • Nike By You customisation platform: Enabled personalisation at scale.
  • SNKRS app: Transformed shoe launches into cultural events.

As a result, according to its 2024 annual report, Nike’s direct-to-consumer sales grew from 16% to over 40% of total revenue.

  1. Customer-Driven Innovation: Rebuilding from the Ground Up

The most sustainable path to regaining PMF often involves fundamentally changing how you listen to, understand, and respond to customers.

The Customer-Driven Innovation Process:

Deep Customer Research:

  • Move beyond surveys to ethnographic research and customer journey mapping.
  • Create customer advisory boards with rotating membership.
  • Implement continuous feedback loops through multiple touchpoints.
  • Use social listening and sentiment analysis for real-time insights.

Co-Creation Strategies:

  • Involve customers in product development from ideation to testing.
  • Create beta communities to validate new product features.
  • Implement rapid prototyping with customer feedback integration.
  • Establish innovation labs that customers can visit and contribute to.

Organisational Alignment:

  • Create cross-functional teams with direct customer exposure.
  • Implement CX metrics and financial KPI dashboards.
  • Establish customer advocacy roles within product development.
  • Develop regular “customer immersion” experiences for leadership teams.

Data-Driven Recovery: Metrics That Matter

Regaining PMF requires new measurement approaches beyond traditional business metrics:

Leading Indicators

  • Net Promoter Score (NPS) trends across customer segments.
  • Product usage depth and feature adoption rates.
  • Customer effort scores for service interactions.
  • Organic growth rates vs. paid acquisition.
  • Customer lifetime value to acquisition cost ratios.

Advanced Analytics

  • Cohort analysis to understand retention patterns.
  • Predictive churn modelling to identify at-risk segments.
  • Customer journey analytics to identify friction points.
  • Sentiment analysis across all customer touchpoints.

The global economy is expected to see substantial benefits from digital transformation initiatives, making data-driven decision-making not just a competitive advantage but necessary for survival.

Common Pitfalls and How to Avoid Them

The Innovation Trap

Many established brands create innovation labs and digital transformation initiatives that look impressive but don’t optimise the customer experience. Focus on outcomes, not activities.

Once Successful, Always Successful

Your past success can become a prison. Be willing to discontinue products, services, or strategies that no longer serve customers, regardless of historical investment.

The Need for Speed

Research from Harvard Business Review shows that digital transformation failure rates range from 70% to 95%, with an average of 87.5% not meeting their original objectives, often because companies prioritise speed over understanding. Being agile is good, but do take time to deeply understand customer needs before racing to solutions.

Building Long-Term PMF Resilience

Regaining PMF isn’t just about recovery—it’s about building systems that maintain alignment with evolving customer needs:

Organisational Capabilities:

Cultural Shifts:

  • Reward customer-centric decisions over short-term financial metrics.
  • Encourage intelligent failure and rapid learning.
  • Create direct pathways between customer insights and decision-making.
  • Maintain a startup mentality within established organisational structures.

The Path Forward

Regaining PMF as an established brand requires acknowledging that your past success doesn’t guarantee future relevance. It demands the humility to listen deeply to customers, the courage to change profitable but outdated approaches, and the discipline to measure what truly matters.

The companies that successfully navigate this challenge don’t just regain their market position—they often emerge stronger, more resilient, and better positioned for future market changes. In an era where customer expectations evolve rapidly and new competitors emerge constantly, the ability to regain and maintain PMF becomes the ultimate sustainable competitive advantage.

The question isn’t whether you’ll need to rediscover product-market fit—it’s whether you’ll recognise the need early enough and have the courage to act decisively when the time comes.

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