The SaaS industry is already very competitive and is becoming more so. The total amount that end users spent worldwide on public cloud services in 2021 was $332.3 billion, up 23.1% from the $270 billion spent in 2020.
Finding new customers, known as prospecting, is more challenging as you sift through accurate data. And even after capturing leads, the sales cycle for SaaS solutions typically lasts longer than other types of businesses — taking 4-6 months. It’s a long time to keep following up with a potential customer in the hopes of making a sale.
Thus, closing the sales faster requires effective SaaS product management that ensures the effective use of available resources (and teams) and unlocks true growth potential. It involves organizational aspects of product development, sales, marketing, and quality management, enabling managers and engineers to adapt to market dynamics quickly.
Think of it as a classic product management case, but here, products are software. That requires deep tech proficiency, basic coding skills, market understanding, and more. As many cloud-based software companies are CX-focused businesses, product management should also focus on UX.
A starter guide for SaaS product management includes creating MVP, staying growth-focused, optimizing the product, and leveraging a dedicated product management team.
Let’s get started!
Define your minimum viable product
A minimum viable product (MVP) describes a product with the bare minimum functionality but provides significant value to the user base while being cost-effective. Next comes prioritizing features, revealing which aspects need priority from the product team. Try comparing it to the early adopters and see if it matches the market expectations.
You can get closer to defining the parameters of your minimum viable product by defining the following:
- User persona(s)
- Solution(s) to the problem
- Action(s) required to solve their problem through your SaaS product
Enable Growth
A growth-oriented SaaS business must make a market-validated product that results in onboarding users and driving active subscriptions.
Here, product management tasks include—
- Computing ROI
- Framing a product roadmap
- Enhancing quality while making the brand stand out in the market
A general perception that SaaS product management won’t require much care once you have customers is wrong. It works the other way around. The real work begins when you have successfully generated the traction and now would leverage it for expansion.
Here are some of the key tasks that help unlock SaaS growth
- Keep up with or improve upon current monthly sales
- Cater to satisfy existing customers by promptly addressing their concerns.
- Consistently enhance marketing strategies that help grow new customers.
- Ensure the SaaS product continues to run smoothly, securely, and quickly to improve the scope of usage.
- Create brand-new functions.
- Pricing and the business strategy may be refined via iteration.
Utilize the available funds to rope in experts or expand your in-house staff to overcome growth challenges.
Ensure tracking the SaaS product management efforts with key KPIs like —
- Qualitative feedback on user onboarding
- CAC (Customer Acquisition Cost)
- LTV (Life Time Value of a customer)
- User churn rates
- And other growth metrics depending on your SaaS business model
Product optimization
Most SaaS product managers would turn to developers when product optimization becomes inevitable. But, changing the current SaaS scenario requires identifying value-adding changes to incorporate and gauge the impact of such modifications.
The project manager must work with the development teams and run multiple A/B tests before finalizing changes.
Once the product is launched, the product management team works for ways to optimize the same. Because if the product improves over time, it is bound to succeed in thriving competition. Therefore, an ideal SaaS product management often includes optimization which requires planning updates and collecting user feedback.
Product optimization is not limited to the product but also includes tapping into the following—
SaaS stack visibility: Leveraging SaaS product management tools to examine how effectively your business uses the available resources comprehensively. Look for opportunities to explore security aspects, resource utilization, license management, etc.
Optimized budgets: A footprint analysis of ROI help allocate funds for the expansion of each division. This is the first step to optimizing SaaS spending, effectively gauging update costs, and predicting future SaaS spending.
Licensing automation: A dynamic and automated workflow helps optimize SaaS licensing by provisioning, de-provisioning, downgrading, and upgrading per-user license tier. Such automated licensing management ensures that everyone gets the proper license type.
A dedicated product management team
Lastly, successful SaaS product management requires a dedicated team that will overlook the functional aspects of products. Below are some key roles that can play a major role in a product management team.
- VP, Product Management: This position is treated as a product owner who knows the product, in & out. A person in such a key position will make every major product-related decision.
- Product Manager(s): There can be one or more product managers who are charged with developing true empathy for customers and creatively solving their problems. They also hold the command line to make everyday decisions and ensure smooth team functioning.
- UX managers, designers, and researchers: A team of experts and skilled resources are hired to examine a product’s layout and information architecture that makes it simpler to use.
Ideally, a product leader would ensure keeping a high-functioning product management team with the following key tasks —
- Setting up a roadmap and product strategy
- Navigate and access possible growth opportunities
- Exploring the scope of the product
- Internally representing the product through various supports (sales and marketing), promoting products amongst evangelists, doing expert reviews, etc.
- Understanding the customer’s wants and pain areas
Putting an ideal candidate at the helm of the product management department would demand resources at the disposal and better control to assemble a team boasting the right skills.
Conclusion
Product management begins with understanding business strategy and translating it into a plan to improve your company’s SaaS offerings. Linking business goals with product offerings helps tailor solutions for a target market. Successful product development is necessary to meet the needs of those market segments and strive for improving results.
Though not easy, establishing and maintaining an effective product management function can yield significant returns and unlock hidden potential for streamlined operations.
