SaaS Product Managers Must Overthrow Traditional Marketing (Opening Thoughts)
Opening Thoughts
Note:
This article covers opening thoughts of the “Mastering Product Experience: How to Deliver Personalized Product Experiences with Product-led Go-to-Market Strategy” book written by the Aptrinsic team: Nick Bonfiglio, Mickey Alon, and Myk Pono. Please like and share.
Building a great product is hard. Getting people to try your product is even harder. But the ultimate challenge is to ensure that customers not only try, but keep using your product over time. Succeed, and you achieve the ultimate goal of growing a base of customers who are loyal to both your product and your brand. Those who continuously derive value from your product will share their experiences with colleagues, peers, and friends; and there’s no better marketing than a referral from someone who loves your product.
How do you build products that people love? How do you make it easy and convenient for customers to try and buy your product?
While those challenges are big, one of the largest and perhaps most important challenges to solve is this: understanding your customers’ needs and what they value in your products and improving how they experience your product.
No wonder it’s only getting more challenging to be a product manager. Today’s product managers must take more data, and the overall customer experience, into consideration as they make critical product-related decisions. It is not enough to understand technology, UX, new software development methodologies, and the business side of your customers. Long-term product success requires a deep understanding of, and ability to influence, user behaviors inside your product.
This is especially true for product managers at Software-as-a-Service (SaaS) companies — that is, enterprise software companies. For their companies to stay competitive and grow, they must adopt a new go-to-market strategy, a customer acquisition process, and most importantly, a new way of thinking about the customer experience.
Early in my career, I learned how challenging it is to acquire, engage, and keep users in your product. At 3DO, I helped bring to life one of the very first internet games, Meridian 59 — a massively multiplayer online game that made it possible for people from around the world to play together. Our goal, obviously, was to build game features that would keep customers playing for as long as possible. Usually, players are not getting paid to spend hours playing the game, nor do they have a boss urging them to keep playing. So how do you create an environment where people willingly spend a significant amount of their time?
Gaming companies were the first to realize the importance of understanding players’ (a.k.a. users’) goals and behaviors. They pay more attention to user behaviors than to their demographics. At 3DO, we used the classical player behavioral segmentation — what is now commonly referred to as the Bartle taxonomy of four player types — which focuses on developing features aimed at increasing user playing time and engagement. Players were able to customize their avatars for a more personalized in-game experience. We awarded points for exploring the game world; points were also earned by beating weaker opponents and aggressive creatures. But more importantly, we built in-game e-mail and bulletin boards, guild voting, and political appointments. Even our user support system was built into the game; our support staff had their own avatars, and any player could ask questions and interact with these special support characters while playing the game.
Every feature was designed to keep users playing the game. Every communication with users happened inside the game. You could say that we used our game to acquire, retain, and grow our user base.
The idea of engaging customers through product experiences stayed with me as I moved into the enterprise software world, most recently at a company offering marketing automation as SaaS. While at Marketo, I chaired our Global Product Council, where we faced similar challenges as those at 3DO. Our goal was identifying the right behavioral data, and devising the right adoption methodologies, to drive increased growth without significantly increasing our customer acquisition costs.
But getting accurate and insightful behavioral data at an enterprise software company proved to be more challenging. That’s because we lacked a way to capture real-time product usage and customer profile data in a single system. Like most other enterprise companies, we cobbled together disparate systems which provided access to some amount of forensic data at best.
Compounding matters was the reliance on a sales-led go-to-market (GTM) model, as is common in most software companies. In other words, our sales organization took the lead for all sales development, customer meetings, demos, proof-of-concept installations, and the like. During this time, we came to realize that this expensive GTM model wasn’t going to work for less expensive SaaS offerings like ours that were disrupting incumbent, on-premise software providers.
Enter the marketing-led GTM model, where sales development representative roles were created to work in conjunction with account executives. This newer model gave companies more favorable prospect-to-sales-representative ratios. It was tilted toward mass lead generation and quick turnaround, leveraging the internet for webinars and online demos, while reducing office visits to far-flung prospect sites. But even this didn’t prove enough to address our needs and goals to help us get the insights we needed.
During my time at Marketo, I remember a meeting where people were guessing about issues with our newly introduced products. Because we had no first-hand data about how our customers were using our products, we couldn’t make informed business decisions. Further, our cross-functional team didn’t have the capability or tools to influence a customer’s adoption journey while they were using our products. However — and here’s the frustrating part for any product person — everyone seemed to have an opinion on what to change or add to the product.
We realized that software product teams needed a better way to drive and measure adoption, influence user behavior, and optimize in-product customer experiences. My experience in the gaming industry proved to be vital to understanding what enterprise software companies are finally starting to realize: The customer experience and behaviors in your product should inform how you drive your GTM strategy.
The need to shift SaaS companies to a product-led GTM strategy became apparent. As a global product team, we worked hard at Marketo to innovate and create great products. However, without effective customer adoption strategies to drive new growth and upsell our existing base, we might as well have left those products on the proverbial internet shelf. It was a disappointing reality check, and it was at that point that the market opportunity became very evident to Mickey and me — so we decided to do something about it.
We wrote this book to share empirical data about what has been happening to make this new product-led GTM strategy the preferred model for SaaS teams and companies undergoing digital transformation. It provides practical ideas for how to turn your software product into a personalized customer experience, and a go-to-market machine that will create more value for your customers and company. We also envision a new organizational culture emerging, geared toward generating Product-Qualified Leads (PQLs) rather than Marketing-Qualified Leads (MQLs). It is a customer-oriented culture that will fuel the next evolution of GTM strategies, and move us away from mass-lead demand generation toward creating and curating customer experiences.
As a CEO, I well understand the importance of identifying the key levers the company leader can pull to make the greatest impact on their business; and I am convinced that a product-led GTM strategy is the one lever every SaaS company needs to pull in order to make their businesses lasting ones.
Read the next chapter — The New Path to SaaS Company Success (Opening Thoughts)
Read the full “Mastering Product Experience: How to Deliver Personalized Product Experiences with Product-led Go-to-Market Strategy” book written by the Aptrinsic team: Nick Bonfiglio, Mickey Alon, and Myk Pono.
In this book, we share what we have learned about what it takes to succeed with a Software-as-a-Service (SaaS) company. We explain how to deliver a winning customer-centric experience strategy to your customers throughout the customer lifecycle, from acquisition to up-sell/X-sell. We show how to implement a faster and more effective product-led go-to-market strategy to meet changing customer expectations. And we share how to optimize Customer Acquisition Cost (CAC) and increase Customer Lifetime Value (CLV) by building better contextual relationships through personalized product-driven engagement.
