Insight: SaaS (40) Customer Value Proposition
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The rule for calculating bonuses of SaaS enterprises is described in the previous article. Let’s talk about the value proposition, which is a critical component of SaaS conversion.
Transactions in SaaS are based on rational thinking and judgment. Customers will not buy on impulse; instead, they will decide to purchase after assessing the pros and cons. So, when it comes to making a deal, what is the most crucial factor? I believe it is the great degree of overlap between the customer’s Need Proposition and the SaaS company’s Value Proposition, not the pricing, product, or sales method.
The value proposition of a corporation is referred to as the CVP. It is the company’s marketing statement, not the genuine customer’s offer. A genuine, customer-generated proposition is the customer’s need proposition.
Definition: A Need Proposition is the customer’s problem to be solved and the expected result.
Simply put, the customer’s need proposition is what the client is having an issue with and what the expected outcome of that problem is. If you present a table of all the customer’s inquiries and expected outcomes, sort them by the customer’s level of worry. This need will pass the test if the SaaS value proposition can solve the customer’s problem and provide a suitable result. The greater the overlap between the SaaS value proposition and the need proposition, the more likely the gap will close.
In principle, it is a model; in practice, things are far more convoluted. Clients today not only want the desired result, but they also want to know how to get it. The consumer also has specific preferences for how Problem A’s Result A1 is achieved. Even if the aims and expected outcomes are reached, when SaaS uses a manner that the consumer does not expect, the customer will not be totally satisfied.
And because clients are sometimes only partially pleased, we can assign a percentage to the score of this need and value proposition. The table that follows:
We may see that the projected answers for various issues deviate from the proportion of results and approaches. For example, in Problem A, Result A1 accounts for 50% of the total, but Approach a1 accounts for only 20%. Demonstrate that in Problem A, clients are more concerned with results than with processes. Problem B is the inverse; Result B1 accounts for just 30% of the total, while Approach B1 accounts for 40%.
In Problem C, we can also see that the customer’s expected Result C1 and Approach c1 are not fully realized. However, they all received high marks. This is a scenario that occurs frequently in real life. Although your solution falls short of a perfect score, it is acceptable.
Problem D, for example, does not cover the issue that the customer is trying to solve. So the customer’s issue is only half of the tale. As a result, the maximum coverage of result and approach is only 20% and 15%, respectively, although the maximum should be 40% and 30%. This occurs when your value offer only tackles a portion of the customer’s problem and fails to completely understand the customer’s pressing issue. This is a common occurrence.
Whether it’s the problem, the result or the approach, the shape of the customer’s need proposition is frequently hidden. Continue your investigation into the unknown in this table.
1. Explore all of the customer’s open issues as thoroughly as feasible.
The most crucial step is to identify the problem. Many clients don’t make this form public, but they secretly rate your plan. At the very least, this element will not be 0 points if your value proposition precisely addresses the customer’s problem. And the point is that this table will almost certainly evolve over time. Perhaps the client is unaware that he has an issue, and your value offer alerts him to it. Customers would perceive this SaaS company to be very professional and capable of foreseeing unexpected problems.
2. Recognize the preferences of customers in terms of outcomes and procedures.
The higher the standards for the procedure, the more professional the customer. They are concerned with both the end result and the methods used to get it. And those new clients are more concerned with outcomes. There should be a commensurate emphasis on the description of results and approaches in the SaaS value proposition. If you’re more interested in the outcome, for example, the outcome should be expressed by keyword in the value proposition, and there should be a descriptive procedure. If the Approach is more important, there are critical steps in the Approach.
3. It is preferable to have more Approach alternatives.
Some outcomes can be achieved in a variety of ways. In customer service, for example, we can contact customers via chat, email, and phone. Customers have their own tastes and choices. SaaS only needs to present these options to clients and allow them to choose. Some approaches, such as new technology, are more popular right now, and SaaS organizations should stay on top of them.
Understanding the customer’s need proposition is the most important aspect of developing a value proposition. If you understand the customer’s proposition, you can easily align your value proposition with the need. This has provided the most solid rational framework for the transaction’s conclusion, leaving only price, product, and sales abilities to decide.
Please send me an email (jasperhanlingyi@gmail.com) if you have any questions or suggestions.
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