At the heart of every product person, there’s a desire to make someone’s life easier or simpler. If we listen to the customer and give them what they need, they’ll reciprocate with love and loyalty to your brand.” – Francis Brown, Product Development Manager at Alaska Airlines
The above quote was coined by Francis Brown, and it is very much relevant in SaaS product management.
What is SaaS?
Software as a service (SaaS) allows users to connect to and use cloud-based apps over the Internet.
SaaS provides a complete software solution that you purchase on a pay-as-you-go basis from a cloud service provider. You rent the use of an app for your organization and your users connect to it over the Internet, usually with a web browser. All of the underlying infrastructure, middleware, app software, and app data are located in the service provider’s data center. The service provider manages the hardware and software and will ensure the app’s availability and security of the app and your data with the appropriate service agreement. SaaS allows your organization to get quickly up and running with an app at minimal upfront cost.
When we compare traditional product management and SaaS product management, a few niche skills are needed specific to SaaS Products. The SaaS product is signup and the customer should be able to use the product from the next minute. It is inevitable that customers of SaaS products are using the product and evaluating their choice for their needs daily, weekly and monthly. So, as a SaaS product manager, we should add value to the customers regularly.
In this blog, we are going to see the Top 5 tips for a Product Manager and tips to excel in a SaaS product Management role from my experience.
Top 5 tips for SaaS Product Management Success
There are many tactics for the success of SaaS Product Management Success. Here we are going to see The top 5 tips are below:
- Empathize with customers
- Hassle free Onboarding
- Talk & Listen to the customers
- Track Product Usage
- Product Performance metrics
The below picture shows these 5 tips.
Empathize with customers
When you embrace the customer’s feedback, it will lead your customers to become brand ambassadors for your product and they will spread their happiness with their friends & family. Getting customers through r, in turn, in turn, reduces the Customer Acquisition Cost to the product. If you are curious to know more about it you can go through my another blog about Essentials to empathize with Customers.
Hassle-free Onboarding
Making a good first impression can be the difference between building a successful business relationship or losing a potential client. If you’re building a new company, a new product, we need to immediately and consistently be asking ourselves, how will this look to a new user, who has no idea what my company is about.
CUSTOMER ONBOARDING
Customer Onboarding is the nurturing process that gets new users acquainted with your product. An exceptional customer onboarding program involves step-by-step tutorials, unlimited guidance and support, and milestone celebrations when a customer achieves success through your solution.
How you are onboarding the customers set the stage for your relationship with the customer.
You need to spend more time thinking about your first impression, often. Get feedback from the audience who have no idea what your product is all about and your registration process. You have to question yourself why something should exist on your product if it is outweighed by the possible negative effects too.
If a customer had a frustrating experience early on their subscription, then they will leave. Since SaaS subscription businesses solely depend on monthly recurring revenue to scale, they should have a hassle-free onboarding process. We have to provide the value of the product early and showcase how it makes their life easy.
Word of mouth is the best way to get more customers on board.
Talk & Listen to the Customers
We should talk and listen to the customer’s both positive and negative feedback and act upon it. (not only reactive, but we should be proactive too)
Collecting customer feedback is vital for the betterment of the product. The customer feedback can be collected from multiple channels like from within the product, Online communities, client interviews, Usability tests
Usability Evaluation, Discuss with your support team, sales team to gather feedback. Online communities are a great way to analyze customer comments. An online community allows your customers to be heard without them interacting with you directly.
While communities can transform customers into advocates (85% of online communities have a strategy to encourage customers to become advocates for their brand), it can also drive customers to share their negative experiences as well.
Track Product Usage
You may think why as a PM, I have to analyze usage data. By analyzing the usage data, we will be able to understand the behavior of the customers. We will be able to know what are all the features used most and which one is used least by the customers. Based on that, we will prioritize making the user experience better for the most used features. This is very useful for me in my personal experience.
The objective is to get a summary view of how many users use a feature and how often they are using it. We can consider an example from your product on how many users have used the newly introduced product feature x.
Product Performance Metrics
The product metrics include how many people signed up for the product and how much data they have put into the product. Keep an eye on what features the customers are using and what they are not using. Make a habit of analyzing your product metrics daily.
Monitor the product metrics, and going through it helps to plan the next upcoming product features. When we take this approach to make the decision, it will make us less vulnerable to risky choices. For example, suppose you want to implement a new feature. In that case, we have to analyze how many customers are requesting that feature and using that particular module and how much data is put into the system. Based on this data, we have to prioritize that and make the decision.
There are many product metrics available such as MRR, ARR, LTV, Churn. Among all these metrics one North Star Metric of any product is Active Users of the product. The product metrics representation is shown below:
Next, we are going to see about these metrics in brief.
- MRR – Monthly Recurring Revenue
- Monthly Recurring Revenue (MRR) is the amount of predictable revenue that a SaaS product or company can expect to get on a monthly basis. MRR is critical to understanding overall business profitability and cash flow for subscription companies.
- ARR – Annual Recurring Revenue
- Annual Recurring Revenue is the amount of predictable revenue that a SaaS product or company can expect to get on a yearly basis.
- LTV
- Lifetime Value(LTV) is equal to Average Revenue Per Customer divided By Customers Churn rate.
- Churn
- Churn refers to how many of your customers cancel their subscriptions in a certain time period
I hope these tips will help you to achieve high growth in SaaS Product Management. Product is always a work in progress and we should be flexible in the details but rigid on our long-term vision.