Product, Pricing, Marketing, and Data: Essential Building Blocks for SaaS Success
I have always enjoyed the hands-on aspect of product development. You might say I was a geek before being a geek was cool. Early on, I also realized that I have a knack for articulating technical information in a way that business people can understand. This is a handy combination of skills in the SaaS world. It allows me to see a problem, figure out how to solve it technically and then effectively explain it to people who might not be quite as tech savvy.
These skills have served me well in a variety of roles, most recently as the CRO for Abstract, a small-but-passionate company that is addressing a technically ambitious problem: redesigning the design process. We have developed a common infrastructure that supports the modern design workflow and helps make the design process more accessible to the non-design teams within an organization. We’re working to wrangle the timeless and universal problem of version control on design projects.
My experience, throughout my career and here at Abstract, has given me the opportunity to touch so many parts of product development and marketing. I’ve learned that while the priority of the various building blocks of a SaaS company may shift a little depending on each unique organization, their audience, and their product – there are a few key elements that are always of utmost importance: your product market fit and pricing, your go-to-market strategy and your ability to capture and use your own data effectively.
Building Your Foundation: Product Market Fit and Pricing
When I started out, I spent quite a bit of time in tech sales before transitioning into a product manager role. While I loved being involved in writing specs, identifying requirements and working closely with the engineering team, I also loved being out in the field where I could engage directly with end users. This led me to focus my work more around early product market fit, which is such a crucial thing for any SaaS company to nail down.
Product Market Fit – Designing the Right Solution
Getting to product market fit demands both technical expertise and the ability to work and communicate effectively with many different groups of people. The whole process covers several key questions about a product: What will solve the end users’ problem? What will users pay for the solution? How do you define value to the user?
The beginning of the process is all about gathering information, designing a solution, and then the back and forth of multiple iterations needed to refine the original idea into a working prototype and eventually, a successful product. This process applies no matter what kind of product you’re developing. I once worked on a pharmaceutical product that was completely outside of my wheelhouse, but I was able to see the project through by simply following the process: interview a ton of scientists, help them define and articulate their biggest problems, and then translate that for the engineering team. From there, I worked with the engineering team to develop mockups that I could then take back out into the field before we ever wrote a line of code.
Pricing – Finding the Sweet Spot
Once you’ve figured out the technical solution to the user’s problem, the fun part begins—figuring out what they will pay for it. Not unlike the iterative development process of the product itself, coming up with your pricing involves a lot of experimentation. And like a product that’s always evolving, pricing is never really done; it will change depending on where you are in the product life cycle and what your customer base is willing to pay. In the early stages, you may need to set your pricing at a level that you know will get those early adopters in the door. Once you’ve established product value, your pricing may go up a little, and then it might come down a little as competitors enter the market. It’s always going to be in flux, depending on outside influences.
A big part of adapting your pricing has to do with constantly adjusting to find that nirvana between what the customer is willing to pay and the perceived value of the product. This is a constant dance, and I recommend reviewing pricing every quarter to see if you’re in the right place, based on how market factors might have shifted.
In addition to the actual dollar amount, there are other pricing factors to consider. Pricing transparency, for instance, is something that seems to follow a cyclical pattern, from being super transparent to completely opaque. At one end of the scale, you might be dealing with large, perpetual-license enterprise deals that don’t include a detailed breakdown of the pricing. These kinds of situations give a SaaS team a lot of flexibility to do value selling and really focus on figuring out where the most advantageous price break is.
At the other end, you have self-service models or smaller contract deals in which everything is up front for everyone to see. You also have to think about things like how to price differently for distinct global audiences, which might have different pain points and different ways of calculating ROI in order to justify the cost of your product. There are a lot of variables.
From the inception of the product idea to the research and development and then the product market fit and pricing, it’s important to always stay open to change. Nothing about any of these aspects of a SaaS business is ever written in stone.
Connecting with Your Audience: Go-to-Market Strategy
As the CRO, my job doesn’t end with product market fit or pricing. From there, we venture into the wild frontier of the go-to-market strategy. At Abstract, we consider ourselves to be a product-led organization that relies on our product’s ability to deliver immediate value and create loyal customers who help spread the word about what we have to offer. Our revenue model includes two paths: a traditional, self-service path and a sales-driven path. The former allows people to download our product, see value right away, and monetize on their own. This works because we established a great product market fit, we solve a real problem and the product is easy to use.
The sales-driven side of things often comes into play after a small group of designers within a Fortune 100 or Fortune 2000 company start using our product and realize they may need help in onboarding and educating their teams and decide to sign an enterprise deal. From there, the deal often expands organically across the company as disparate teams across the organization are quick to realize the value and they want to get on board.
Marketing Strategy – Solving Customer Problems
Whether your business is self-service or sales-enabled—the key to success is proving your product’s value by exceeding your customers’ expectations. For example, when dealing with a technical audience, it’s about proving your product’s value without any marketing fluff.
Abstract sells to designers, who are a unique audience and who are not huge fans of switching processes or tools. Because of this mindset, change management becomes as much a part of our sales process as product tooling. We need to help our audience get past the natural fear of change.
To do that, and to cut through all the noise, marketing to technical audiences is all about helping them solve a problem right now. They want solutions and answers, and they want them in a format that’s quick and easy to digest so they can implement them immediately, if not sooner.
When working to reach an audience like this, quality content that’s highly relevant is key. You have to address their pain points head on, give them the tools up front, and show them how other people are using your product to solve the same problems they face. Think “educational” when developing content, rather than traditional marketing materials. The technical audience appreciates it when you skip the rah-rah and get right down to brass tacks.
Marketing Tactics – Choosing the Right Tools for the Job
The most effective marketing tactic for reaching this audience is word of mouth. Whether word of mouth will work for you depends on whether you have a good product market fit. If you do, you can find influencers who use your product, and you can get them to tell their story. It’s always better, whenever possible, to have someone else say how great your product is. Social sharing is another part of this same idea. When your product is inspiring positive shares and comments online, word spreads quickly. And because the reviews are coming from other customers, your prospects will trust them more than if they were reading reviews you’d curated yourself.
Every once in a while, one or more users will engage in spontaneous content creation that showcases your product. At Abstract, for example, we had a super passionate customer in Australia who wrote a 19-part series about how to build a design system; and he built the entire design system using Abstract. You can’t really engineer these kinds of opportunities, but if you focus on delivering great value by solving real-world problems, you just might inspire this kind of activity.
Finally, another marketing tactic that worked well for us is using meetups. Technical folks attend meetups in order to learn from other people. If you can encourage (and compensate) existing customers to talk about your product in this environment—tell their stories about how they used your product to solve a universal problem—that can go a long way toward reaching new customers.
Learning from Experience: Data Analysis
In addition to being a tech geek, I’m also a data geek. I’m all about slicing and dicing the numbers to really drill down into the different stories they tell. Each morning, I review my top-level metrics. I look at revenue (both self-service and sales-driven or sales-touched). I’m looking for patterns and analyzing details like the ACV of each deal. Also, because we’re focused on the inbound model right now, I review the inbound funnel and conversion rates in order to assess which levers we should be pulling to make the biggest impact on revenue.
I also look at website traffic via Google Analytics to get a sense of how people are hearing about us. We’re just starting to use other tools like Marketo and Salesforce, but we do have a great data science team who helps us look at the behavioral patterns so we can see what designers are doing before they monetize. This will eventually help us tailor our go-to-market strategy and specific marketing tactics to dovetail with those behaviors.
We have actually built a big data warehouse that is informing many teams within our organization. Our engineering team can look at performance-based data like where users are getting stuck and where they are running into error messages. Our growth team—a combination of product, design, engineering and marketing—can look at the funnel and onboarding flows, identify speed bumps and roadblocks in those processes, and adjust accordingly to increase conversion rates and product engagement.
Ultimately, it all comes full circle when we use the data across our organization to continue iterating and refining so we’re always delivering the best experience and best value to our customers.
Putting It All Together
Whether you’re a tech geek, a marketing fanatic, or a data nerd, things will work out best for you, your company and your customers if you realize the importance of combining efforts across these three core elements into one cohesive, product-led strategy. While each one can—on its own—help you make great strides toward success, working together they can transform your business and give you a serious market advantage.
Todd talked to us about what exactly “product led” means, how a product-led strategy extends way beyond acquisition, and how the less-is-more concept can make a big difference.