7 Tips to Ace SaaS Product Management
SaaS product management can be the difference between its success & failure. As technologies and business needs change, how a product evolves to meet its user needs depends on how it is managed. Good product management is proactive, forward looking and has deep connection with its customers. It creates a roadmap that translates customer needs into features, solves their most hard pressing problems and provides them a tool to get things done.
SaaS product management is the art of dealing with complexity, chaos and constant changes, but keeping things streamlined. It works with an influx of innovations, ideas and problems to deliver compelling solutions that make SaaS products indispensable. Here’s a guide to SaaS product management from the experts:
1. Understanding Customer Needs
The most important element of building a good SaaS product is a deep understanding of what the customer needs. You cannot guess and anticipate the needs of the customers. Figure out a way to connect with your customers to learn more about their needs, their environment and reasons why they use your SaaS product.
Customer needs can be understood using some of the following:
i) Usage Analytics
Track the features used by customers and study the patterns of what they are trying to accomplish.
ii) Time Spent
How much time is spent by the users on your product?
What is the frequency of their usage?
iii) Alternatives
What are the alternatives for customers to get things done, if they were not using your product?
iv) Interactive Support
Is your product interactive enough for customers to articulate what they need. Do you have means to collect surveys and opinions of the product users? How often do you have customer calls & review meetings?
2. High Impact Work
Time and resources are limited. It is better to develop things that create the highest impact for the customers than trying to do everything & being average with things. SaaS product management requires careful analysis to zone into the highest priorities of the customers.
Customers prefer SaaS products that are the best of the breed. In a way, if your product is an email campaign tool, it should help customers run campaigns better than any other product. Customers love products that help them do things better. It doesn’t matter, if you have fewer features than other products, as long as your features are better. There is a book on product management, Essentialism: The Disciplined Pursuit of Less. The core philosophy of the book can be summarized as-Less but better.
Know the problem you’re solving for the customer, how you are solving it better than your competitors & the desired outcomes for the users.
3. Feedback Loop
SaaS Product management evolves based on the leanings and iterations overtime. Companies that build successful SaaS products understand the importance of prioritizing feedback from customers, sales & marketing teams, help desk support, users & product usage data.
SaaS product managers use prioritization frameworks like Rice, MoSCoW, Kano etc. to plan product developments. The schedules for deliverables are created according to the priorities and expectations of the customers. Every member of the team knows their role in contributing to products overall success.
4. Striking the Balance
SaaS product management is striking the right balance between all the stakeholders. The stakeholders for your products could be:
i) Customers: People who will pay for your product and determine whether it is successful or not. You’re building the product for them and meeting their goals.
ii) Management Team: Your management team is responsible for orchestrating the product teams and providing the resources for building the product.
iii) Users: These are the people who interact with your product. For e.g. accounting professionals in an organisation will be responsible for using your product to create their management reporting etc. Your understanding of the users, their behavior and environment will go a long way in building the right product.
iv) Product Team: Your team will be responsible for building the product; adapting it and making it work in the long run. Building a culture of transparency, trust and open communication can help you steer your product in the right direction.
v) Marketing & Sales: The marketing teams will be able to convey what your product does, for whom the product is built and the expected results from your product. The marketing teams can spread the awareness about the value your product offers. Your sales teams will be able to bring in the revenue from the customers by educating and exciting the customers about it.
vi) Support & Operations: Your support and operations team will work with your customers to provide them the help they need to run your product. Proactive customer support can save a lot of team’s research and development expenses.
vii) Others: If you are building a product that needs accreditations for security, compliance etc. you will need to go through governments/regulatory authorities to get things approved. There could be legal agreements, supplier contracts, usage agreements, data and security policies etc. that need to be addressed.
SaaS product management coordinates between all the stakeholders, aligns their expectations and engages everyone to contribute to the project success.
5. Measure Customer Value
To build a sustainable SaaS product, a business needs to provide continuous value to its customers. The value creation process needs to be understood and articulated for both product teams & customers. Some of the questions that help product management teams measure customer value:
How are customers deriving value from your SaaS Product?
Why do customers use your product and not alternative options?
What are the switching costs for customers?
How do you measure customer value from your product?
How do you measure customer satisfaction for your product?
What is your product replacing for your customer?
6. Sales & Revenue
Sales and revenue analysis is very much part of SaaS product management today. A key understanding of the conversion rates, the cost to bring in a trial prospect and converting them into a paying customer is integral to developing a better product. Product managers have to keep a pulse of the customers and make the product interactive enough to initiate a sales closure.
Many companies are now depending on the product-led growth. SaaS companies can build products to maximize conversions by carefully instrumented workflows. When product managers understand the resources it takes to get customers onboard, they develop features to retain customers and provide them great value.
Product managers need to be able to assess:
Cost of customer acquisition
Cost of losing a trial customer
Customer Lifetime value
Retention rate of their product
Monthly recurring revenue and expenses
7. Big Picture
While building products, it is necessary not to add features that don’t meet the cut, but there is an increasing need for integrated solutions. Customers prefer vendors and SaaS companies that can offer them end to end experiences for performing their business functions.
Customers are looking at SaaS product offerings that can offer them a complete solution for their needs. For e.g. in business management software, they need the software to do their accounting and provide them with everything they need to run their company. Customers don’t want to end up with too many vendors for different solutions and end up with difficulty to integrate or manage licensing.
Product teams that understand the holistic picture of client needs and business use cases can deliver better SaaS products for them. The big picture involves fitting the pieces of the puzzles together for the customers and helping them become more successful in what they do.