1. Customer Support or UX

To build a product with profitability, it is integral to have the fundamentals right. User onboarding is your great opportunity for winning or losing your customers. When a new user signs up on your product, does the user need customer support for the onboarding process?  If yes, you would already be losing most of your customers.

Customer support for onboarding new users is expensive, it adds friction and unnecessary costs. It is a hindrance to product sales. On the contrary, when your product is engineered with great UX, it leads to improved conversions and sales of your SaaS product.

The top companies invest in crafting rich UX to make their users achieve their goals. The UX is geared to increase customer engagement, welcome users with personalisation and provide them an actionable tour of the product. It can help the users to achieve what they want from the product leading to conversions and sales.

Companies that provide self service tools, knowledge articles, product tours and simple actionable steps to their users improve conversions and retention.

Customer support calls on the other hand are usually handled manually. These incur not just inbound support teams, but more importantly it interrupts the flow for new users. As per a study done by Groove, highly engaged customers buy 90% more often, spend 60% more per transaction, and offer 3X the amount of annual revenue compared to unengaged customers.

2. Quick Wins For Users

Customer engagement is the key to winning users. You have a very short attention time from the user. If you fail to engage the users, they will not come back to use your product.

Customise, personalise and optimise your product UX to engage your users. Companies today use AI-driven customer engagement for profit engineering. For e.g. the workflow and product experiences are tailored as per the profile of the user. The data onboarding is done using third party integrations.

The user profiles are mapped to include key outcomes for each user. Once the key outcomes are mapped to the user profiles, the users can then get actionable nudges from the product to achieve their goals. A good product understands the interests of its users and the key tasks they are looking to complete, it helps accomplish these tasks with automated workflows.

When users score quick wins and get their tasks done, they are more likely to continue using the product. For e.g. an accounting software that helps the accountant prepare bookkeeping reports using AI algorithms to reduce the time to prepare upto date bookkeeping reports. 

3. Profit Engineering 

The best products are developed with understanding of causality. They zone into the root cause of problems and solve them. They don’t treat the symptom, but the root cause of the problem is to build products profitably.

Expedia customers had a problem where many of their users ended up calling customer support to enquire why they didn’t receive emails for their purchases. The customer support often diagnosed incorrect spelling or email as the cause of this. It typically costs them $5 for servicing this trivial matter. However, by then they had grumpy customers and lost revenue. For a million users, even $5 makes it $5 million for additional customer support.

Expedia team fixed this problem by introducing a two-step verification before purchase was confirmed. It eliminated the root cause of the problem. Engineering products with profitability needs elimination of problems. It needs prevention of problems proactively to improve conversions, revenue & profitability for your SaaS product.

3. Multidirectional Approach 

Building a good SaaS product requires a multidirectional approach. When developers are building the product, they have to address not only the use cases but also the non use cases to have a good understanding of their product.

What will the product do, for whom and what it will not do are all important aspects of building the right product. In his book, “The Opposable Mind”, Martin shares that, “thinkers who exploit opposing ideas to construct a new solution enjoy a built-in advantage over thinkers who can consider only one model at a time.”

A multidirectional approach considers strong business models and approaches. For e.g. Skype uses the traditional internet infrastructure for making VOIP calls free. It also reduced costs to international calls considerably using SIP based calling systems. A multi-model consideration that evaluates different approaches for business helps teams build SaaS products with higher success rates.

4. Product as a Service 

Every product offers some service to its customers. How your product is able to connect with users, meet their needs, support them and upgrade your product is crucial for its adoption. 

Today products can engage with customers on a deeper level to offer them superior experience when interacting with your brand. Your SaaS product is expected to take care of the needs of your customer by offering them services they need from your product.

For e.g. the accounts receivables take care of sending automated invoices to the clients when employees submit their timesheets and payments are due. The product also sends reminders and provides reconciliation support to the customers when payments are received.

Customers are not buying products but they are looking to fill a need in their lives. Is your product addressing your customer needs? When products provide services to their customers, it drives sales, creates word of mouth PR and increased customer retention rate. SaaS products like Docusign, Evernote and Slack are good examples of companies which are driven by user driven sales.

5. Daily Active Users

Rich user experience leads to sticky products. Every successful brand tracks its users meticulously to improve their engagement and interactivity. Are you measuring user engagement? What is the average time a user spends on your product? Are your users motivated to use the product frequently?   

DAU/MAU is a popular metric SaaS product companies use for measuring engagement. This is expressed as the ratio of daily active users over total monthly active users. This metric is measured as a percentage. Anything over 20% is considered good engagement, lower engagement could mean users are not finding value from the product quickly enough. The leading SaaS products with excellent engagement have an engagement ratio over 50%.

A rich UX unleashes a quick value proposition for its users. For e.g. congratulating the users for completing a task like linking their corporate bank accounts for accounting automation. Dividing the heads in steps for measuring progress like introducing 3 steps to completion etc.

A SaaS product needs to capture users attention quickly by providing value. The focus should be on the key outcomes customers are looking to achieve using visual cues and actionable triggers built into the product. When users spend their time productively, accomplish work and achieve their primary outcomes, they continue to use your product.

Kreyon Systems provides SaaS product development services to build scalable solutions. If you have any queries for us or need help in SaaS development, please reach out to us.

The post How to Build SaaS Products Profitably Using Rich UX  appeared first on Kreyon Systems | Blog | Software Company | Software Development | Software Design.

Product led growth is the new panacea for SaaS companies looking to scale and succeed. Product led growth is when a company relies on its product as the key driver for customer acquisitions, conversions, referrals, retention and growth. The product essentially drives the business and growth of a company. It creates a seamless and flowing model which helps customers derive indispensable value from the product. 

There are many SaaS companies adopting product led growth as the go to strategy for their business. The emphasis is on building the best product and using it to increase sales and business opportunities for a company. 

Why Product Led Growth?

There is a growing cost of customer acquisition and lower revenue per users, the sales driven approach may not be the best one to achieve scale. Products like Slack, Dropbox, Netflix etc. on the other hand are subscription based purchases made by the users. These products reduce the dependency of sales representatives and friction for company growth.

The sales driven company growth leads to higher costs and often not the most scalable mode for a SaaS business. The product led growth acquires customers at a lower cost and creates higher lifetime value for customers.

Product led growth focuses on customer success. It helps companies acquire customers without involvement of sales teams. A SaaS product typically offers a free trial that is used for winning customers. The trial period helps customers derive value from the product.

Modes of Product Led Growth

Product led growth is driven by finding qualified prospects, offering the products for use, and winning customers by providing aha moments for them. The product is not dependent on sales teams for generating revenues, but smooth onboarding and superior product experience leads to revenues.

The product led growth companies typically rely on offering their products in the following ways to their customers:

i) Free Trials

Enterprise customers want to experience and vet products before buying them. Companies offering free trials and great product experience often generate more sales than the ones that don’t. 

ii) Demo

Some products are often sold through demos and guided sessions for customers. Products that are built for specific niche customers are often introduced to their customers with demos. 

iii) Freemium Model

A free version of the product can be used to win a large user base and these customers could then upgrade to premium functionality upon payments. The freemium model can be expensive and hurt the business model of a company, if it is not supported by the right monetisation models. LinkedIn is a good example of a company that employs a freemium model with a good business model. 

The right approach for offering your product to the customers will reduce sales cycles, lower customer acquisition costs, and generate higher revenue per customer. Essentially, the product led companies employ the complete team for bringing revenues and winning customers. 

Product Specialisation

The product led growth is often reliant on specialisation for acquiring customers. For e.g. Google docs used a stripped down version of Microsoft docs to target its user base. The idea is to target the right audience for your product and provide them with a clear value proposition. Products that are used frequently by users accelerate its sales. Slack is an example of a product whose sales is driven by its users. It depicts a bottom up selling strategy.

The bottom up selling strategy helps companies target the users for their products. Once users love the product experience and are able to map the outcomes they want from it, they buy the product. The user’s motivation drives the sales of the products. 

Strong Value Proposition

Customers buy products when they can derive value from it. Products that are intuitive, help users accomplish what they want and provide tangible value for the customers generate revenue for companies. 

The value needs to be explicit for the customers. It should be easy for customers to understand. What is the value for the customer? What does your product help your customers achieve? For e.g. a product that helps customers save their costs or increase their revenue in tangible terms. 

Product led companies ask their customers what outcomes they are looking to achieve. They help their customers achieve those outcomes to justify their product value proposition for them. For e.g. CRM is linked to increased revenue generated. A 10% revenue increase is an outcome that generates great value for a customer. If your product helps your customer achieve this, you’re in business.

Product led companies zone into the right customers with specialised focus. They target the right customers and ensure that the outcomes they are looking for are met. The product trial is a great opportunity to showcase value metrics that customers can get.

Growth Metrics

Product led growth is driven by tracking key metrics to understand customer insights. When customers are able to use your product to meet their desired outcomes, they are likely to buy your product. The value perception of your product is shaped when key customer considerations are met. Companies can understand these considerations using metrics like:

What percent of your sign-ups lead to paying customers?
What percent of your customers churn after a given time period?
Who are your target customers?
What is the lifetime value of a customer?
What are the customer acquisition costs?
Why did Customers Churn?
What is your annual recurring revenue?
What is your monthly recurring revenue?
Are your customers able to achieve the primary outcomes they are looking for?

The sales driven method of growing a company is becoming obsolete. Great products that deliver on their promise, help customers achieve key business outcomes and offer rich product experience are the new growth levers for a SaaS company.

An incredible user experience leads customers to introduce your product in their networks, which leads to faster growth, increased reach and scalability for your business. Zoom is a great e.g. of a company that achieved amazing scale with network effects where users introduce a product in their network. It achieved a revenue of over $2.6 billion in 2021.

Kreyon Systems is a SaaS product development company. If you have any queries for us or need help in building SaaS products, please reach out to us.

The post What is Product Led Growth for SaaS Companies? appeared first on Kreyon Systems | Blog | Software Company | Software Development | Software Design.