By Felicia Anderson
SaaS provides a treasure trove of new user insights.
As customers adopt Software as a Service (SaaS) in record numbers, those software providers that effectively leverage SaaS’ unique advantages will move into industry-leading positions. Companies that fail to do so will lose competitive ground.
Here are 3 areas that every SaaS product team should consider to make the most of the SaaS opportunity.
Instrument your products to observe true user behavior
SaaS providers have unprecedented visibility into users’ activities. Product teams should add capabilities to track user behavior quantitatively and use that information to improve the product. This approach typically yields much better results than activities such as focus groups because it shows what users actually do, not what they say (which is often notably different than what they do).
Intuit, a company renowned for its practice of following customers home to monitor user behavior in a natural environment, got dramatically different results when talking with users about a solution versus silently observing their behavior from within the product. In one case, they were considering how to improve the onboarding process for new payroll customers.
Initially, they mocked up screens to show the option of running the first payroll prior to completing the full configuration. With screenshots in hand, they met with 20 prospects and asked if they would choose the option of running the first round of checks before completing the set up. Not a single prospect expressed interest in this option.
Then they changed the screen on the actual site to show this as an option. They didn’t have the backend functionality yet but wanted to test user behavior. Intuit founder, Scott Clark, recounts that “when they actually didn’t ask an opinion and just watched behavior, 58% clicked, “I want to cut the checks first.” 58%.”
That’s an eye-popping difference: zero percent interest when talking with the prospects versus 58% interest when presented with the option in the product. The product team proceeded to add the capability, which resulted in the fastest customer growth for that product in ten years.
Use SaaS’ superior customer feedback options
Great SaaS products enable users to provide feedback within the context of the user experience itself. With an easy-to-find, simple, in-application feedback capability, users will typically provide more accurate and more useful feedback. Well-designed in-app feedback can reduce customer service cost, increase issue resolution speed, and result in more actionable enhancement suggestions.
Tweet this: Great SaaS products enable users to provide feedback within the context of the user experience itself
EdX, the nonprofit that provides free online courses from MIT, Harvard and other leading colleges and universities, provides a great example of in-application feedback. The user goes to the same place for all types of feedback, and the form is very simple and short (just 2 questions, see below). But possibly the most important feature is that access to the help tab moves with the user so that it is always visible, even when the user scrolls down. When users have a suggestion or concern, they do not have to scramble to figure out where to go to share their feedback.
EdX Feedback Form: Simple, Short, and Easy to Find
SaaS industry leaders understand this simple truth:
“the single biggest driver of long term profitability for your cloud business…is the renewal rate of your customers.”
To minimize churn, mine the data from your SaaS user base to identify leading indicators of attrition. One useful practice is to monitor usage by account to identify accounts that have recently reduced either their log-in frequency or their transaction volume. These accounts are frequently at risk of churning, so coordinate with sales, professional services, or customer support to intervene prior to losing the customer.
Tweet this: To minimize churn, mine the data from your SaaS user base to identify leading indicators of attrition
SaaS provides exciting, new ways understand and stay close to customers. With on premise products, product managers could only speak with and get feedback from a limited number of customers each year.
With SaaS products, on the other hand, it’s possible to glean insights from the entire user base, whether that’s 100, 1,000 or 100,000 users. Armed with superior information across a broader set of users, product managers of SaaS products can deliver solutions with even greater customer value.
Tweet this: What’s different about managing SaaS products http://wp.me/pXBON-4rH #cloud #prodmgmt
About the Author
Felicia Anderson is Director of Program Management, Cloud Services at OpenText. She helps product teams improve product investment decisions and increase launch success of cloud-based products.
Why Intuit Founder Scott Cook Wants You To Stop Listening To Your Boss, Fast Company, http://www.fastcompany.com/3020699/bottom-line/why-intuit-founder-scott-cook-wants-you-to-stop-listening-to-your-boss
 Byron Deeter, Bessemer Venture Partners, http://www.bvp.com/blog/customer-success-company-success