Consumerization of Enterprise Software — Part II
Building a Unique Identity in the Age of Enterprise Brands
In my last post, I covered many of the trends driving fundamental shifts in go-to-market for professional software today. It encompassed themes you’ve likely come across in the past around the sales process (self-on boarding), pricing (freemium, open-source), development (low-code/WYSIWYG), or category (collaboration, “future of work”). Let’s pick up where we left off around the idea of rising above the competition in an increasingly crowded world.
The barriers restricting who can build software and mechanisms constricting who can sell SaaS are crumbling rapidly, favoring egalitarianism. This has also led to a sharp increase in the number of enterprise-grade applications across every vertical in just the past 5 years.
Historically, outpacing competition involved a combination of being (1) Cheaper, (2) Better, (3) Faster. But intuitively, we know that as supply rises faster than demand, prices fall and profit margins asymptote to zero (Cheaper❌). Even as B2B Saas companies fight the tides by obfuscating prices online, with abundant VC capital available in the war for talent (Faster❌), and competitors ape-ing your best features mere weeks after you release them (Better❌), the old ways of navigating the storms won't keep your fledgling SaaS startup afloat for long.
So how does one keep from drowning under the crashing waves in unfavorable winds? By turning to the age-old life raft of human irrationality: Brand.
Rationalizing SaaS Purchases with Brand Identity
“Man is not a rational animal; he is a rationalizing animal.” — Robert A. Heinlein
What is the “value” of a brand, if not the willingness to emotionally overpay in the face of a more economically rational alternative? Lest you think this applies only to consumer luxury goods, data shows that enterprise purchasers tend to be just as (if not more) driven by emotion when buying or sticking with professional software. Their perception of your brand, rational or otherwise, is formed well before the buyer speaks to anyone at your company. Per Forrester / Neilsen 2015 research:
- 70–90% of the buyer's journey is complete prior to engaging a vendor
- Buyers engage with 11.4 pieces of content prior to making a purchase
- Buyers are 5x more dependent on content than they were 5 years ago
Asked to define the “brand” of your favorite “future of work” tool like Slack, Airtable, Superhuman, Notion, Figma, Coda, Invision, etc, you’d probably use words like “clean, colorful, fast, easy to learn, fun, enjoyable, responsive”, or “mobile” if they have a correspondingly enjoyable smartphone experience. But each of these tools faces competition from both incumbents and challengers alike, all of whom have less “delightful” offerings but, more-or-less, operate with feature parity. So why are these enterprise brands worth hundreds of millions, if not yet billions, of dollars in Enterprise Value?
I’d argue that in the end, it’s no longer entirely about what we do when we use professional software, it’s also about how we feel when we do. In order to understand the value of that perception and association, let’s isolate the components of brand identity that enable the best companies to establish loyalty with customers.
Applying Brand Identity Basics to a Bottoms-Up SaaS Company
“Marketing is about values.“ — Steve Jobs
My colleague Michael Coetzee ran this exercise with all of our Techstars NYC companies and I loved sitting in on many of these sessions. I won’t dissect Jean-Noël Kapferer’s Brand Identity Prism in immense detail here, as many other resources cover it quite well. But because any designer or marketer you hire will (or should) extract this information from you anyway, my intention is to highlight this as an easy, but important, exercise to do early in the life of your “Consumerized” SaaS startup. Let’s take my new favorite daily-use tool Notion as our example, starting in the top left, and moving clockwise. (Note: I am not an investor in Notion, but man, I wish I was!)
- Physique: This is the first thing that comes to your mind when thinking about Branding, it’s often made harder by a lack of focus on the other components. Notion’s color scheme and iconography are simple, clean, not flashy. Emojis are merely tools to help distinguish, find, and remember projects or files. Every component of your brand says something to the customer, and in product-led SaaS, it is the first thing that speaks for you.
- Personality: Cultivating a persona for a product or company can be challenging but when communication in a bottoms-up go-to-market is ‘one-to-many’, the care you take in designing your tone matters. Notion’s design assets and “doodles” make the product approachable, but not silly. This is a productivity tool after all. But who says work can’t be a little fun?
- Culture: Aligning your brand’s culture with the values of your core customers helps bond you to your user in a way that breeds product evangelists. Some of the most successful consumer brands have lengthy internal mission documents like The Toyota Way or Netflix’s Culture deck. For now, start with a basic outline of your customer’s company and personal values and map them against your own. How do you know what they value? Ask! Talk to your customers — as early, and often as you can!
- Self-Image: This is the part of the exercise where you do the word associations hinted at above. Notion’s messaging is clearly centered around making the user feel like a hero both within their teams and in their own work. “Write better. Think more clearly. Stay organized. Bring clarity to your team.” Traditional advertising plays to the ego of your target customer by presenting them with an easy way to be — or just feel like — their most perfect self. If you understand how your user wants to feel using your product and then build them something that consistently makes them feel that way — you’ll have won a customer for life.
- Reflection: The inverse of self-image, this is the outside looking in. If you already have an Ideal Customer Profile for your user, then you’re ahead of the game. Take the ICP a step further and break down how you want the people who use your product to be perceived. A good exercise is doing ‘Self-Image’ & ‘Reflection’ individually first, then coming together as a team or company to triangulate around words that overlap the most. This also helps to isolate where there may be a crucial disconnect among the team.
- Relationship: Engendering brand loyalty is the reason that, despite the competition, the best performing SaaS applications all have one thing in common: single-digit low (or negative) churn. What kind of touchpoints are you creating with your customer and how do you make each of those a positive interaction? Notion sends emails every 4–6 days, more frequently right after onboarding, but each one starts with an image or gif on how to use Notion better. Instead of upselling (yet) they are focused on turning me into a power-user / champion for the product first.
Clearly, it’s working.
Thriving in the Age of Enterprise Brands
In thinking about Brand, more simply, as a function of Quality of Product + Reliability of Experience, over Time, we have to recognize the customer touchpoints impacting (1) Quality and (2) Reliability have changed drastically as we move across the barbell from traditional top-down sales to a consumerized bottoms-up marketing.
Traditionally, your salesperson and account executives were primary “spokespeople” for your brand and if there were concerns with Quality or Reliability, the customer knew the proper channel to raise concerns. The diffusion of customer acquisition has also spread responsibility for gathering customer feedback and, for better or worse, create many new touchpoints for engagement with the product. This self-service nature also means that word of mouth can now, more than ever, become one of the most powerful drivers of organic growth and customer acquisition for a B2B startup.
Brand building is rarely top of mind for early-stage B2B / SaaS founders. Meanwhile, every consumer-facing app or D2C company obsesses about the facets of their brand identity. This is because they know that when Big Tech inevitably comes for their market, the perception of brand value and obsessive customer loyalty will be their only moats.
If you’re going to build a SaaS tool in an increasingly competitive market, with a product-led approach, launched via a consumerized go-to-market, shouldn’t your company be thinking about its brand in very much the same way?
Next time, I’ll continue my exploration by diving into other best practices for product-led SaaS and how I believe influencers — yes, influencers — will begin to play into customer acquisition in the Consumerization of the Enterprise.
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