Browsing Tag

market

SaaS Foundations

Scott Sehlhorst of Tyner Blain has a really great post up on SaaS fundamentals. If you’re evaluating SaaS as a sales/delivery model, you owe it to yourself to read and understand these issues first. I especially like how he positions everything from the Point of View of the customer (which is how we should all think).

In addition to his article, there are some psychological aspects at play with SaaS that you need to evaluate for your market, I’ll list a few and let you (the reader) expand on them in comments:

  • People generally dislike pay-as-you-go pricing, and will actually pay more in a flat fee
  • Customers are worried about data lock-in and what happens to their data when they stop paying (you can disarm this by providing industry standard data export tools [CSV, Excel, etc])
  • The customer gets more leverage in a deal in SaaS than in a “standard” licensing sale, especially as an existing customer. As Scott pointed out, the economics of SaaS mean that keeping your existing customers is important since they are annuity revenue streams, and much less expensive to attain than new deals. Customers know this and use it to leverage better terms at renewal time; and since they are getting all of the upgraded functionality as it comes in the SaaS model, it is to their advantage to stretch out the negotiation process as long as possible. If you are a smaller company using SaaS selling into a large company, they will be able to figure out what rough % of your revenue stream they represent, and even if your contracts have good uplifts on the fees once a contract goes month-to-month, they may make the calculation and refuse to pay the uplift knowing that it is unthinkable that you’re going to cut them off, which is your best leverage. If you’re a startup – are you preparred to cut of access to the SaaS you are selling Ford? Morgan Stanley? Bank of America? Good luck with that!

Tuning Into Your Market

Last Month at ProductCamp, I had the privilege to work with some of the great team from Pragmatic Marketing, like Graham Joyce and John Milburn. They were kind enough to give me an advance copy of the new book from Craig Stull, Phil Myers, and David Meerman Scott entitled Tuned In. After reading it cover-to-cover, I can recommend it as a great resource and vehicle for the message that Pragmatic Marketing has carried for years.

The whole point of Tuned In is that there is a better way of developing products and services, and better products and services to be developed if only we listen to and understand our customers. This message will sound very familiar to anyone who has been to a Pragmatic Marketing training, or who has read their blogs. It is deceptively simple, and it sounds so easy – why wouldn’t you talk to your customers? Yet, most companies don’t.

Tuned In puts a wrapper around everything that Pragmatic Marketing teaches in their trainings, and David Meerman Scott’s message about how to talk with customers dovetails well with developing products that make sense.

My biggest beef with Pragmatic Marketing has always been that they are too theoretical, and that “the matrix” is academic. That theory means that you leave the training with a head full of good ideas about what you should be doing, but few ideas on how you should be doing it (e.g. connecting with customers, getting buy in from Executives, etc). My favorite part about Tuned In is that they start to break down these walls with some really great examples of putting the process to work “on the ground.”

Tuned In is not a how-to manual, but a good reference for you to refer to when you want to refresh what you learned. I’d also recommend handing it off to a skeptical Executive – my copy was just over 200 pages and I nearly finished it on a round-trip flight from Austin to Vegas, so you may be able to fit it within their attention span.

Some of the greatest ideas are great because they are obvious – or rather, they feel obvious after you’re exposed to them. The ideas presented in Tuned In are obvious and presented in such a “smack your forehead” way that makes you wonder why you didn’t tie them all together yourself. The mantra of know thy customer is real, is powerful, and is true. Reading Tuned In will get you re-energized, and it could be the spark that you need to get more budget, headcount, or political support – or more importantly, what helps you turn your product or company into a market winner.

On a side note, I’m going to try hard to keep Product Beautiful active over the next few months. I just started a new job and we have our first child coming any day now, so time for posting may be reduced. If any of you would like to guest blog on Product Beautiful, please drop me an email at pt.young@gmail.com to let me know – I’d love your help!

Japan Rising: The Importance of Knowing Your Customer

GeishaJapanese women are bound by cultural norms that by Western standards may seem strict. Over the past 20 years, a trend has developed where as Japanese women enter the workforce, they are delaying having children to have a career, and are becoming more assertive about their wants and needs as consumers. As a Product Manager, this is an interesting test lab for finding new problems to solve, since new groups of potential customers don’t generally appear as quickly or as aggressively as the working Japanese woman.

CNN is running a short video clip about a fascinating new business catering to this demographic in Japan: overworked, under appreciated Japanese women who feel constrained by the rules and traditions of Japanese society and appreciate the freedom and empowerment of their Western peers.

In this restaurant, hosted exclusively by Western males, the servers dote on their Japanese clients, almost in a reversal of the old geisha tradition. The best part of the video is that the owner went out and interviewed 200+ women about what they wanted before investing in the concept. There is nothing special about the food or tiara offered to each patron – these women are buying on the service and experience that they can’t get elsewhere. This is a great way to keep costs in line while differentiating your product. Ikea is another example in a different industry.

How do you listen to customers to differentiate your business?