Understanding your customer is the most important factor to take into consideration when defining your SaaS strategy. Without customers your product is nothing. There was a time when you could get away with selling a business need to another business, but that time is long gone. Today, people try products and based on their experience, emotional response, and perceived value to the business determine how to move forward.
Products Are For People
Given the plethora of SaaS tools and services that exist today, the human connection has become critical to your growing your SaaS business. It’s a fact that your customers hold all of the power in the buyer/seller relationship and you have a limited opportunity to deliver the value of your product to them.
Product are for people.
The Best Intentions
Founders set out with an idea that is often fueled by a desire to improve some function of their work, life, or both. They identify a problem and develop a solution designed for a specific target audience. In the early days this is all that matters, your SaaS strategy is all about building a solution to a problem you have identified.
Founding teams spend a great deal of effort working on clearly defining a target audience and market, and defining a product to meet the needs of the market.
It’s all about the customer.
There has been a ton of recent interest in Product Led Growth (PLG), a SaaS business strategy that is all about understanding your customer and delivering value. PLG is not a magic wand. It does not guarantee your business will go public, or that you’ll beat your competitors, or that growing your business will be easy.
But, when implemented properly a product led SaaS strategy does ensure you’re focused on delivering value to your customer at every turn.
Seems simple right? Well, it is … until you have a board breathing down your neck, or you’ve missed target for the second month, or your sales lead just quit, or your biggest customer just churned … you pick the scenario.
The point is, when your back is up against the wall the decisions you make will determine your fate.
All SaaS businesses start out with nothing but the best intentions, but staying true to your mission when the pressure is on is what makes great businesses, great. Easier said than done. Here are some things you can do to help keep your SaaS Strategy focused on the relationship your customers have with your product.
Clearly define your target customer
Chances are you worked tirelessly to define your target market and customer when forming your company and used that information to develop your prototype and alpha products.
You probably used some, if not all, of these techniques in the process:
- Define the problem The first step to understanding your customer is clearly defining the problem you’re solving for. Until you have a rock-solid definition of the problem you can’t move on to the next step.
- Develop a thesis regarding your target customer You’ve defined the problem, now you can develop some theories regarding the people your product, in its current state, best serves.
- Validate your problem statement Leverage your friends, business partners, colleagues, LinkedIn, and any other sources at your disposal to have conversations with your target customer. The goal here is to collect feedback on your existing problem statement to add color to your overall SaaS strategy.
- Update your target customer profile Incorporate your learnings and build as much detail as you can into your target personas.
- Create a handful of user stories These user stories will help keep your teams on the same page and working towards the same goals. They provide context for both the problem you are solving for and the customer you are targeting. They help keep you honest, they help keep you focused, and they are the foundation for everything that is to come. Do not skip this step.
Build a solution to solve your target customers problem
Your product is for people. People that have a business problem that you have worked to define and map out a solution. It’s time to build it. You’ve completed all of the foundational work — the picture is as clear as it’s going to get at this stage — it’s time to build the solution.
- You’re not building a bridge across the ocean. Your SaaS strategy should be focused on your target customer.
- Solve the problem as cleanly as possible using the stories you’ve developed as a guide.
Validate your product / solution
Leverage your community of “friendlies” during the development process to ensure you’re building a service that adds value to your customer’s existing workflow. Your product doesn’t need to be perfect at this stage, but it does need to deliver value and provide some level of insight into the longer-term vision.
- Hold regular feedback sessions with advisors that represent your target persona
- Leverage services like Full Story and/or Hotjar to record user sessions. Use these recordings to identify points of confusion and friction.
- Define and instrument event tracking to identify Activation and Value using Google Tag Manager, Segment, or Mixpanel
- Lastly, go into these user sessions with clearly defined goals and objectives, and a plan to collect, analyze, socialize, and incorporate the findings into the overall strategy for your SaaS.
Pay attention to user experience
Your SaaS is only as good as your user experience. Meaning, you can build the most valuable product the world has ever seen, but if the user experience sucks it will fail.
As founders, we are reluctant to admit there are other tools out there that can replace ours, but the truth is people have more choice in the tools they select that ever before, and the cost (in time and money) to switch from one service to another is extremely low.
SaaS has enabled founders to bring new tools to market and innovate, but it has also shifted the control to the consumer by giving them the power of choice.
- Focus on user experience early
- Your product can’t be for everyone which is why you spent so much time upfront defining your target customer and market. Stay true to the SaaS Strategy to defines and focus on solving your target customers’ problems.
Trying to solve everyone’s problems is a recipe for disaster – don’t do it. - User experience is not limited to your product, it requires attention at every customer interaction. marketing, customer success, product, sales … these experiences, together, make up the whole of your customer experience. Get them aligned, keep your promises, and work to continuously improve them.
Deliver value
If you’re not delivering value to your customer they will leave you, just as you’re not likely to return to the restaurant that delivered you food poisoning. Products that deliver value quickly, and with minimal effort take on a life of their own and grow.
Value is about solving your customer’s problems. In order to do that you need to understand and focus on your target customer. It should be clear by now why it is so critically important to understand your customer when defining your SaaS strategy.
It’s ALL about your customer.
