This series is about how to survive the post-ZIRP era as a SaaS company, especially as markets turn into commoditized and customer loyalty becomes harder to earn, as I described in Part 1. In Part 2, we talked about the increasingly vital role of retention and expansion revenue. When you focus on this, your first task is to solve the customer’s problems. If your product team commonly engages with customers, as really useful in my previous article, you will know what problems need to be solved from the inside out. There’s a good likelihood that many other customers and potential customers are facing the same challenges.
Here’s a common problem we have seen with many customers and prospects in the retail industry: Catalog management process too complicated. For example, a seller cannot make easy changes to the way products are bundled, bundled or priced on their website. The result is a lot of custom development work that does not need to be done if the seller can simply handle itself. During conversations with each IT users and salespeople, we learned that separating the product catalog solves this problem. We now have a product that makes it much easier for the merchant to make dynamic adjustments as needed. We would not have learned this if we hadn’t listened to our customers – and now our catalog management product is a key competitive differentiator.
Customers can show you how to develop a product roadmap and maintain features based on real problems and real needs. This process goes each ways – positive and negative. Far too many organizations struggle with a lack of accountability if they do not listen to and adapt to negative customer feedback. If you are not listening, guess what? Your customer has many alternatives.
Challenging ineffective GTM applications
If you have taken these steps to invest in customer relationships, it is time to ask yourself what other elements of your go-to-market may be ineffective. Are you spending too much on customer acquisition through ineffective marketing or promoting? The payback period for these investments can take years and is probably not value it, especially as SaaS relationships turn into increasingly transactional.
Do you wish entry-level sales reps to generate more outbound leads? And more importantly, do more leads and repeat business translate into growth for your online business? Most often, these are sunk costs in the customer acquisition process.
But is there a way to let your product speak for itself? In a complex corporate sale, it could be prudent to consider a combination of: growth based on product and sales movement. If the prospect can evaluate at least some of your product on their very own, the next step will probably be to talk to a knowledgeable sales representative, a technical solutions engineer, a member of the product team, or a combination of each. A product-led lead must be treated similarly to a land-and-grow move with a traditional customer (which supports my point that product and customer success must be driven by the same team).
In other words, the bar is now much higher to maintain credibility with buyers. What does this prove? Gartner graphics In today’s B2B purchasing journey, most buyers take a “choose your own adventure” approach to product evaluation. They want to take many of the first steps on their very own. Once they make contact, they need greater than just a basic representative to persuade and convert them.
Avoiding a race to the bottom
In the age of incrementalism, customer relationships have never been more vital. Instead of engaging in a price competition, the higher query is: How can I add value to the customers I already have? Here’s the excellent news: a byproduct of focusing on customers is building software that many other people with the same problems also want. Not to mention, building with clients is based on reality, not theory or CAC cost models. While it could require changing the way things have all the time been done in your organization, focusing on your customers makes great things occur.