The rise of the SaaS model in the product space has been swift, to say the least. So as product managers, knowing how to manage only traditional, on-premises software no longer cuts it.
We chatted with six experts (i.e. SaaS product managers) to find out how their role differs from an “old-school” software PM — and more importantly, what it really takes to be a SaaS PM. Breaking down everything from must-have skills to those special metrics to up-and-coming trends within the space, these insights from SaaS veterans can prepare any PM looking to enter (or those already in) the SaaS space.
Here’s who we spoke with:
- Evan Michner, Principal Product Manager at Atlassian
- Jill Renwick, Product Manager at ScribbleLive
- Ramin Shokrizadeh, Senior Product Manager at Zendesk
- Allison Burnett, Principal Product Manager at Oracle
- Olexandr Prokhorenko, Director of Product Management at Zuora
- Sue Raisty, Product Management Consultant and CEO at Sure Product Consulting
How does SaaS product management differ from traditional software product management?
The nature of SaaS implies that your customer is constantly re-evaluating your product — weekly, monthly, or yearly. Switching has become easier. And for a PM, differentiation becomes more critical. It’s a reminder to go back to the basics of ensuring we’re solving the right problems to create products that customers love.
If there was one thing a SaaS PM needed (tool, process, skill, etc.) to survive, what would it be?
For any PM, I think it’s the art of discernment. Looking at a problem carefully from all angles to pave the right path forward. Empathy is critical in that process — putting the customer at the center of your decision.
As a SaaS PM, how are you measuring success?
When a PM can go on vacation and trust the team to make the right decisions for the customer, that’s success in my book! It means that the PM has done a great job of communicating the problem and metrics of success for that project.
The data you focus on seems to be a key differentiator in SaaS product management. What’s the top metric a SaaS PM should focus on?
The AARRR framework is always a solid starting point: acquisition, activation, retention, referral and revenue. For example, take referral. Your job as a PM would be to move the business forward by building a product your customers love so much that they’re recommending it to their friends over and over again. A clear goal that impacts business.
From your time as a SaaS PM, what is a mistake you actively try to avoid today?
All of the time I wasted chasing the perfect product! I’m a perfectionist. It took me far too long to realize that a team could deliver more value to customers by shipping the first version than by sitting around perfecting it. Cast the vision, build the version. Keep iterating, keep shipping!
What’s one way to guarantee failure as a SaaS PM?
Never talking to your customers. And treating them as a number…or a dollar sign.
How does SaaS product management differ from on-premises software product management?
I’ve always worked on SaaS products — so I can’t speak to personal experiences on both sides — but there are definitely different revenue considerations. There are also different expectations regarding customizations you can offer.
We’re not creating one-off versions of software; we’re creating scalable, fast solutions. So as a SaaS PM, you want to build open and flexible products. This way different use cases can leverage the same features, but in various ways.
You mentioned different expectations regarding customizations. Can you expand on how user expectations differ for SaaS products?
For customers more used to enterprise or custom-built software, they might expect one-off customizations or features they can heavily customize. Also, they expect software to release differently. The cadence of how often we release new software — or new features — to clients is definitely different than offering an update to clients a couple times a year. So we need to offer a different level of training and hands-on approach from our client teams too.
Walk us through how you measure success as a SaaS PM.
There’s a bunch of different ways. To name a few:
- Overall client sentiment. Are clients seeing value in the platform? Are we solving an actual problem for them? Are we easily replaceable?
- Client retention
- Overall platform usage. How often are clients logging in and using key features?
- Monthly recurring revenue. How much money are you making from the platform?
- Feature-specific adoption
What’s one way to ensure failure as a SaaS PM?
I’d say lack of passion for your product. If you don’t care about the product or clients you’re building for, I’d say move on to a different role!
What trends are emerging in SaaS product management?
The evolution of single-product services or point solutions to larger platforms. Clients are looking to consolidate vendors and have more integrated solutions. For mature startups, this may come through in software acquisitions or new internal product builds.
What are the main differences between SaaS product management and traditional software product management?
My whole PM career has been in SaaS, so I can’t share first-hand experience on differences. But observing PMs who’ve transitioned, the biggest difference is development speed and frequency of deploying to customers. Also roadmap flexibility. The roadmap changes more often in SaaS, meaning more communication with stakeholders.
If you needed a tool or process or skill to survive as a SaaS PM, what would it be?
Strong data analysis and understanding of how to query data from databases. Funnel and segmentation analysis is key to SaaS product optimization. Focus on understanding data more generally and teach yourself how to write SQL queries. These skills will pay off tenfold.
How should a SaaS PM measure success?
Ultimately, a healthy SaaS funnel is one that has a low and sustainable churn rate with customers who are promoters. From emerging startups to medium-sized companies, organic referrals will always be critical to adoption of new features and a business’ overall success.
Since metrics are a big differentiator in SaaS product management, what would you say is the top metric for a SaaS PM?
I manage both web and mobile products, so I approach each slightly differently. For web, I primarily focus on net promoter score (NPS) and its trend over time, broken down by customer segment and persona type.
For mobile, I look at weekly retention rates by cohort to ensure we’re keeping new app users engaged over time. I also closely monitor and respond to ratings/reviews from the App Store and Google Play Store.
Let’s talk trends in SaaS product management. Anything you’re noticing?
Business funnels will have new emerging front doors such as conversational experiences on 3rd party platforms, like Facebook Messenger in North America and LINE/WeChat in Asia.
Within constraints of these conversational/bot platforms, copywriting is becoming even more important for feature or product design. Copywriting is not a common skill associated with PMs but it’s a great skill to have and there are some good books to help grow that muscle. (Persuasive copywriting was recommended to me early in my career.)
Title: Principal Product Manager
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How does SaaS product management differ from traditional software product management?
In SaaS environments you need to keep existing customers so they continue to pay for your service. Every release must be easy-to-use, provide value for your customers and not frustrate them. When making significant changes to existing functionality, the PM should understand the customer impact so as not to lose any users.
In my experience, SaaS applications tend to have faster release cycles. You constantly need to talk to your customers and gather data so you can quickly iterate on the product.
What’s one thing (tool, process, skill, etc.) a SaaS PM needs to survive?
Curiosity and defined overall vision. Always ask questions, don’t make assumptions and do research to make the right decisions for your product area. Know what you’re building and why, so you can quickly adapt to changes and still get valuable features out the door.
How do you measure success as a SaaS PM?
Depends on the goal of your product area, but in general successful adoption plus retention of your product in the market.
How do you guarantee failure as a SaaS PM?
While getting metrics on the product is always key, it’s important to remember ‘the why.’ Why are your customers using the product this way? How are they using the product to do whatever they need to do? Getting data is one thing; understanding the data and your customers is another.
Any key trends you see popping up in SaaS product management?
With recent political developments within the U.S. and the low Canadian dollar, I’m hearing more tech companies consider opening offices north of the border. And on the flip side, I’m hearing more PMs wanting to stay in Canada.
In the enterprise space, I’m hearing more about the right balance between agile and a fully defined roadmap (enterprise agile).
As a SaaS PM, what is the one tool/process/skill you need to survive?
It’s not necessarily a tool, but staying sharp with technology and having a holistic view of technologies around you. Your goal as a PM is to offer an end-to-end experience.
How do you measure success as a SaaS PM?
Profitability and cash growth. My general rule of thumb is if your LTV is at least four times your CAC, you can recover the CAC in less than a year. It varies though and is not a hard-and-fast rule.
At much bigger, more mature companies, look at profitability per employee, so you don’t overgrow what you can’t afford. With smaller companies, growth should never be a separate entity. It should be a responsibility of every employee to grow the company.
Looking back at your SaaS PM career, any cringe worthy moments or mistakes you’d avoid today?
Hiring mistakes. I try not to fall in love with logos, pedigrees, that kind of stuff. But sometimes you might end up hiring somebody just for the “Google” name on the resume and they end up not meeting the expectations.
Also, I’m currently working on the pricing model here at Zuora. There is no one-size-fits-all; it’s an ongoing exercise. You cannot price it and then fight your way to get pricing right. Keep iterating.
How can a SaaS PM set themselves up for failure?
This applies to any PM, but forgetting the fundamental thing you’re solving. It resonates with “build it and they will come.” Don’t. Because they won’t come.
Also scope creep. You can build the biggest thing ever and end up with the biggest failure ever. You’re not going to build something 100% right. 80% (or even less sometimes) is good enough.
Any significant trends in SaaS product management?
I do see vertical and horizontal SaaS scaling. Companies are going into specific industries (real estate, finance, etc.) or establishing themselves as role-specific (marketing, sales, etc.). Many start from the intersection of these two orientations and try to capture the whole area.
Also, it’s a little early, but I see a lot of interest in UI-less SaaS platforms. Trying to use already existing channels such as bots, messengers, emails, calendars, as primary delivery communication mechanisms. SaaS businesses aren’t concentrating on single entry points.
What’s the difference between SaaS product management and traditional software product management?
From my perspective — and I work mainly in B2B enterprise software — SaaS product management is now traditional. The B2B world has been mostly web-based since 2000, but customers managed servers in their own data centers. Nowadays, customers subscribe to cloud-based services and servers are managed by us.
With SaaS, I work with DevOps. I rarely think about simplifying the upgrade and migration process of server products because DevOps handles it; customers don’t have to. Before I used to track a giant matrix of what operating system-database-application server combinations were “supported” configurations for our product. I still do this a little, but it’s so much easier.
Is there a specific metric a SaaS PM should focus on to measure success?
I have different types of clients so it’s different for all of them. But when I help a Head of Product decide which metrics they should monitor, I suggest tracking the number of meaningful customer contacts each PM has per week. It fundamentally changes PM behaviour. Usually they’re not tracking it, so measuring it gets PMs prioritizing listening to customers.
Looking back at your time as a SaaS PM specifically, any cringe worthy moments you feel like you could avoid today?
Yeah, of course! If you’ve read my blog it’s full of many of my cringe worthy moments, I’m sure.
Specific to SaaS, there’s the mistake where you roll out an incorrect change. With SaaS, once you roll out a change everybody has it, right? So it’s more of an emergency than if you just published the link to the latest download. In SaaS, sometimes you think you’ve tested the heck out of something and then immediately you’re rolling it back.
What trends are popping up in the SaaS product management space?
User experience is becoming ever more important (a welcome change for enterprise B2B products, where the UIs were often horrible!).
I also see SaaS PMs think about how to analyze the large amounts of data their products collect. Sometimes this analysis can be so valuable to customers that you can charge for it as a new product.