Creating and owning an entirely new category of product is a compelling challenge — but in the B2B SaaS space, you need to be first place because of the winner-takes-all phenomenon. If you’re not? Someone else will be and first place is often far ahead of second. Look at Apple’s iPhone. Google’s search. Uber. WordPress.
Product marketing is something Flawless Inbound’s Marketing Technology Lead Deepesh Kumar spends a lot of time pondering. With many of our clients in the tech startup space, we were talking on the topic recently and have put together some interesting insights from the conversation.
“When you’re creating a new category in the B2B space, product marketing owns two major, critical functions,” Deepesh says.
“If you want to succeed and grow, assess your product-market fit and create your pricing.”
3 Tips When Assessing your B2B SaaS Product-Market Fit
You have a smart idea for a product? Great! Now, is there actually a market for it— or is the problem you solve perhaps incredibly niche? Or does your product address a symptom rather than a root cause?
You don’t want to go to the trouble of developing a solution to a problem that, ultimately, people don’t perceive as important enough to pay to fix. The challenge is, the B2B SaaS product-market fit assessment can involve some evasive signals. Here’s how to pin some down.
1: How’s Your Close Rate — When the CEO and
Founders Aren’t Involved?
It’s one thing for a founder or CEO to close a deal. It’s another when a more general sales process succeeds on its own.
“Founders and CEOs tend to close a lot of deals based on strong relationships — and charisma,” Deepesh says. “That’s a false signal.”
I agreed. Relationships are important, and you never want to turn down a deal, but your CEO and founders inherently bring something “more” to negotiations — and they aren’t scalable.
You need to know that your deal close rate is representative of some independent value. After all, the founders and CEO may not be involved in the sales process forever, and that value is what does make you scalable.
2: Product Deployment: Are Clients Actually Using the Product?
“Just because someone registered for a subscription or bought a license doesn’t mean there’s a great product-market fit,” I say. “Maybe they just sold the idea of it really well — in the wrong direction — and now that a client’s paying for it, it doesn’t do what they expected.”
“Check if your software is actually being deployed by your clients,” Deepesh says. “If it’s shelfware, your product-market fit — even if you are getting revenue — should concern you.”
It might seem fine in the short term as the money comes in anyway, but eventually, on the client side, someone’s going to ask where all this money is going. They’ll cancel the payments, and word will get around that the product “doesn’t work.” Perhaps they’ll even use some choicer words.
3: Can You Spot Repeatable Patterns in Product Appeal?
“Post-deal analysis is critical.” I say. “Is the product appealing to particular persona/industry segment/use case? A strong repeatable trend means you are closer to product-market fit.”
Understand what your product is doing, for who, and how. Test your analysis and avoid making generous assumptions. Starting to see a little success can be exciting, but you need to understand and repeat it.
Get it wrong? You’ll start compounding failure.
“Often times, initial successes lead to false conclusions on the product-market fit. Those products then never scale,” Deepesh says.
“Avoid the trap.”
The 4 Most Important Tactics For Creating Pricing
When your B2B SaaS product creates a new category, pricing might seem a mystery — you’ve got little to compare it to. Deepesh describes some of these four considerations as counter-intuitive — but they’re all something that factor into the question.
1: Start High And Adjust Down If Needed
“You don’t the know the market value yet, so have your sales team can go in high and then figure out the right pricing with feedback,” Deepesh says. “It’s easier to lower your prices that than increase after the client’s gotten used to it.”
“Yes!” I agree, “Set your price aggressively high and you’ll get real feedback fast!”
Set it low, and bigger companies might buy your product as a forgettable side project.
2: Target Early-Stage Adopters
Early-stage adopters are more likely to see your value faster – and have the ability and agility to act on it. With a faster turnaround on the sales cycle, you’ll get pricing feedback and can work from there.
3: Make the Technical Close Before You Talk Pricing
Don’t be tempted to get them on price when you haven’t yet made the technical close. Take your time, convince the business of the impact of your SaaS product, and you’ll have a much smoother time feeling out appropriate pricing.
4: Visualize the Full Impact to the Prospect
“What if every department and every employee ended up using your product?” Deepesh asks.
“That’s the dream, right?” I say.
“This may be counter-intuitive when you are trying to make your first few sales — but the prospect is making this calculation anyway.” Deepesh says. “Don’t sell yourself short trying to get an easy win.”
This is also key when monitoring product-market fit signals. Who do you expect to use it, and are they?
B2B SaaS Product Marketing: Need a Hand with a Marketing and Sales Alignment?
You’ve read our tips on B2B SaaS product marketing. So what else is there? First, you’ll find that key to success — especially in the early stages — is a marketing and sales alignment. Get the departments and the people working closer together in a more supportive capacity, and you’ll gain a deeper understanding of your product-market fit and close more meaningful, relevant deals. More meaningful, relevant deals mean happier clients and more reliable, sustainable revenue growth. If you want to finish first in your new category, this is what you need.
Want to experience that kind of growth? Flawless Inbound is a B2B growth agency that has helped more than 60 companies across Canada and the United States achieve astounding marketing success. Want that for your own company? Trick question: you do. Contact us to get started here.