5 Obvious Signs You Might Be Losing Product-Market Fit

When you're in the early stages of building your company, product-market fit (PMF) is everything. But what happens when it feels like you're losing it, or worse, never really had it? As we wrote previously, the path to PMF is not linear, and understanding when your product no longer aligns with your market is crucial for staying on track.

As a product strategy consultancy, we’ve worked with startups and scaleups navigating this exact challenge. Whether you’re struggling with user retention, facing growth plateaus, or just getting more negative feedback than you’d like, it’s important to recognize the signs early on. Here are five indicators that your company might be losing product-market fit – and how you can address them.

1. Declining Retention and Increased Churn

Customer retention and churn are often the first metrics to show that your product isn't resonating like it used to. In the early days, rapid customer acquisition can mask underlying issues. But when users stop coming back or start unsubscribing, it’s a red flag that your product isn’t meeting their needs. This is especially critical for startups and scaleups, as customer loyalty is the foundation for long-term success.

How to address it: Look closely at what’s changed. Have competitors improved or introduced something that attracts your users? Is your product evolving as fast as your customers’ needs? Leverage data to understand where users are dropping off and dive deep into feedback to identify and fix pain points quickly.

2. Slowed or Stagnant Growth

After an initial period of excitement and rapid growth, it’s normal for the pace of user acquisition to slow down. However, if user acquisition or revenue growth begin to flatline, it may be that your product has stopped being as attractive in its market as it once was. Yet for scaleups in particular, growth is essential to keep momentum and secure additional funding.

How to address it: Revisit your user segmentation. Are there new, untapped markets or customer groups to target? How is your product well-suited (or not) for these groups? Assess your product’s core value proposition and analyze if it’s still compelling. If you’re scaling quickly, it’s also critical to refine your user onboarding process and ensure your marketing channels are still driving effective conversions.

3. Rising Negative Feedback

Product-market fit is dynamic. What worked six months ago might not be solving today’s user problems nearly as well. If you’re seeing a sharp uptick in user complaints or negative product ratings – especially focused on your product’s core features – it’s possible that your product is no longer aligned with market needs.

How to address it: Start by listening to your users. Survey them, conduct interviews, and analyze support tickets. The feedback might highlight gaps in features or user experience that you can prioritize in your product roadmap. A well-timed feature release or improvement can quickly address dissatisfaction and regain confidence. If not, you will know that a bigger shift may be required in your product strategy, or even your long term vision – at which point you should be prepared to huddle around the drawing board with your product team. 

4. Resistance to Price Increases

If you’re getting resistance to price increases or customers are flocking to cheaper alternatives, it’s a clear signal that your product might not be perceived as valuable enough to justify its cost. This is particularly problematic for scaleups trying to increase margins and chase profitability.

How to address it: Look at the perceived value of your product. Is it still meeting the key needs of your users? Sometimes, the problem lies in how you’re communicating the value of your offering. Consider tweaking your messaging, adding new features, or even revisiting your pricing strategy to ensure that the perceived value aligns with what you're asking customers to pay. 

5. Struggling to Expand into New Segments

At some point, every growing company faces the challenge of expanding into new markets or user segments. If your product only resonates with a narrow group and you're finding it hard to penetrate new markets, it could be a sign that your product has outgrown its original audience but hasn't adapted for broader appeal.

How to address it: This is a crucial moment. Start by analyzing what your core audience really values and whether those features can be expanded or tailored for new segments. Dive deep on user personas and perform market research to ensure your product can scale across different verticals. At this time, it often helps to follow the traditional strategy-to-roadmap sequence: Start at the higher level, see if your product strategy needs an update, and then rethink your product roadmap to prioritize features that will unlock new market opportunities. 

Conclusion: Don’t Panic, But Do Act Fast

Losing product-market fit doesn’t have to spell doom, but it requires rapid, focused action to get back on course. Whether you’re in the startup phase and dealing with early-stage turbulence, or scaling and facing the complexities of a larger market, staying agile and responsive to your users’ evolving needs is the key to survival.

If any of these signs sound familiar, it might be time to take a step back and reassess your product strategy. The sooner you act, the better positioned you’ll be to regain PMF and keep your business on the path to long-term success.

Need help refining your product strategy or leading your product team through these changes? We specialize in helping startups and scaleups identify and address issues with product-market fit, whether that be through tailored strategy projects, interim/fractional product leadership engagements, or both. Let’s talk.