How to stay ahead of threats to your product
We build and launch products that customers love, and grow our revenues. We then hope that the customers will continue to shower their love for our product and continue to renew. In real life, your product is under constant threat. And hence it is critical to be vigilant about protecting that revenue.
Revenue threats can be internal or external.
Internal threats can be from :
- Product related issues
- Lack of customer centric process
- Competition
- Technological changes
- Economy
- Legal and regulatory changes
- Political and social
- Environmental
Revenue Loss Due to Product Issues
i) Weak Value or No Value Returned to the Customer
Clients expect solutions that streamline operations, boost efficiency, or solve specific pain points. If your product falls short in delivering these benefits, customers may question their investment and look for alternatives.
To combat this threat, it’s essential to continually assess your product’s performance and customer satisfaction. Engage with your clients to understand their evolving needs, pain points, and goals. Regularly update your product to ensure it aligns with these requirements. Consider offering ongoing training and support to help your clients extract the maximum value from your solution. Ensuring that your product consistently delivers value is key to protecting and growing your revenue.
ii) Product Has Usability or Technical Issues and a Hassle to Use
Usability and technical issues can be major culprits in SAAS. Customers expect a seamless, user-friendly experience. If your product is riddled with bugs, slow performance, or a clunky interface, it can become a hassle to use. In certain cases, data leaks or hacks can also create a negative sentiment. In such cases, clients might not only discontinue their subscriptions but also spread negative feedback, impacting your reputation.
To mitigate this threat, invest in rigorous quality assurance and testing procedures. Proactively identify friction points in usage. Address technical issues before they impact customers. Additionally, continually gather user feedback to improve usability. Regular updates and a user-centric design approach can enhance the user experience and prevent revenue loss.
iii) Lack of Innovation
Stagnation can be the silent killer of revenue. If your product lacks innovation and fails to keep up with market trends and technological advancements, your customers may start looking for more cutting-edge alternatives.
Keep a finger on the pulse of your industry, and be prepared to adapt and evolve. Invest in research and development, and consider introducing new features and capabilities that address emerging customer needs. Innovation not only helps you retain existing customers but also attracts new ones, ensuring a healthy revenue stream.
Revenue Loss Due to Process and Organization Issues
Even if your product provides value, you need to ensure that the customers get the value on a continuous basis. If you fail to consistently be in touch with customers and ensuring they get the best out the product, then one day they may realize they are not getting enough value.
i) Poor or Lengthy Onboarding
The onboarding process is your first opportunity to impress customers. If it’s poor or excessively lengthy, you risk losing potential renewal down the road. Onboarding should be a smooth and efficient experience, enabling customers to start using your product with minimal friction. A convoluted onboarding process can lead to frustration, delays, and, ultimately, abandonment of your product.
To address this threat, streamline your onboarding process, focusing on simplicity and clarity. Provide comprehensive documentation, video tutorials, and dedicated support to guide customers through the setup process. By making onboarding a breeze, you increase the likelihood of customers sticking with your product.
ii) Inadequate Customer Success
Customer success is a pivotal element in retaining B2B SaaS clients. When there’s a lack of customer success touchpoints, clients might feel neglected, unsupported, and undervalued. This can lead to dissatisfaction and, in the worst cases, customer churn.
To counter this threat, establish a robust customer success strategy. Regularly check in with clients to ensure they’re making the most of your product and achieving their desired outcomes. Offer personalized support and guidance, making them feel heard and appreciated. A strong customer success program not only safeguards your revenue but can also boost upselling and cross-selling opportunities.
iii) Not Reacting to Customer Needs
One of the most common revenue threats is a failure to respond to customer needs. If your organization is slow to react or adapt to changing customer requirements, clients may grow frustrated and explore other options.
To mitigate this threat, maintain open lines of communication with customers. Actively listen to their feedback and implement improvements that align with their needs. Being responsive and adaptive demonstrates your commitment to customer satisfaction and can help safeguard your revenue.
iv) Not Having or Losing a Customer Champion
Your products success lies in having champions on your customers side. If you don’t have a champion, the likelihood of churn is significantly high. Another challenge is when a champion leaves and someone else takes over. When you lose a champion or key decision-maker at a customer organization, it can put your revenue at risk. The new contact may have different preferences or priorities, potentially leading to a shift in product usage or, in the worst case, cancellation. We see this often in CRM where a new VP sales joins and favors another CRM.
To address this threat, cultivate relationships with multiple stakeholders within your customer organizations. Diversify your connections and ensure that your product continues to meet the needs of different individuals. This way, you’re less vulnerable to revenue loss due to personnel changes.
For the most part, the customer success organization will be responsible for developing the processes and playbooks to keep customers engaged and keep adoption high. However as a PM, you have the opportunity to ensure there is a well defined set of value propositions that the customer success team can use in their engagement with customers. In other words, arm the success teams to be successful.
Revenue loss due to competition
One of the most direct threats to your B2B SaaS revenue is the emergence of superior alternatives. As technology and customer demands evolve, new products may offer innovative features, improved performance, or more competitive pricing. If your product fails to keep pace, you risk losing customers to these enticing alternatives.
Think of Webex losing out to Zoom which now has 56% of the market.
To safeguard your revenue in the face of increased competition, consider the following strategies:
- Continuous Innovation: Invest in research and development to ensure your product stays cutting-edge. Regularly release updates and new features that provide clear value to your customers.
- Market Research: Stay attuned to industry trends and customer feedback. Understand the evolving needs and pain points of your target audience, and adapt your product accordingly.
- Effective Pricing Strategies: Adjust your pricing strategy to remain competitive without compromising profitability. Offering flexible plans, discounts, or value-added bundles can help you attract and retain customers.
- Customer Education: Ensure that your customers are aware of your product's unique value and how it addresses their specific needs. Providing educational resources can strengthen your position in the market.
- Exceptional Customer Support: Outstanding customer support can set you apart from the competition. Delivering exceptional service can build customer loyalty, even when alternatives are available.
- Partnerships and Alliances: Consider forming partnerships or alliances with complementary products or services. This can enhance the overall value proposition of your offering.
Revenue Loss Due to Technology
New innovations can disrupt the market, making existing products or services outdated and less appealing. Historical examples include products based on Adobe Flash, which became obsolete due to security concerns, or smartphones before the iPhone, which revolutionized the mobile industry.
To safeguard your revenue against technology-driven obsolescence, consider the following strategies:
- Continuous Research and Development: Stay ahead of the curve by investing in research and development. Keep your product updated to incorporate the latest advancements and maintain its competitiveness.
- Market Monitoring: Stay attuned to emerging technologies and industry trends. Early detection of disruptive technologies allows you to adapt your product or services before they become obsolete.
- Flexibility and Adaptability: Design your product architecture with flexibility in mind. This can make it easier to integrate new technologies or make significant updates when needed.
- User Feedback: Actively seek feedback from your customers. They can be an invaluable source of insight into emerging needs and preferences that may require technological adjustments.
Revenue Loss Due to External Factors
Revenue can be influenced by a range of external factors that are often beyond our control.
1. Economic Conditions
Economic conditions can greatly influence your revenue, particularly during a recession. When businesses tighten their budgets or face economic uncertainty, demand for non-essential services like SaaS products may decrease. This can lead to revenue loss as customers seek cost-cutting measures.
To protect your revenue in such scenarios:
Diversify Your Customer Base: A diverse client portfolio across industries and geographies can mitigate the impact of economic downturns in specific sectors.
Flexible Pricing and Plans: Offer pricing plans that cater to different budgetary needs, including scaled-down versions or discounts during challenging economic times.
Customer Retention Focus: During economic downturns, it’s essential to prioritize customer satisfaction and retention to prevent churn and preserve revenue.
2. Legal Regulations
Legal regulations, especially data privacy laws like GDPR and CCPA, can significantly affect B2B SaaS products. Compliance requirements may demand changes to your product or influence customer perception. Failure to adapt to these regulations can render your product less effective in the eyes of customers, impacting revenue.
To safeguard your revenue amidst evolving legal landscapes:
Proactive Compliance: Stay informed about changing regulations and proactively adapt your product to ensure compliance, reducing the risk of customer attrition.
Educate Your Customers: Provide guidance and resources to help your customers understand the implications of legal changes and how your product complies with these regulations.
Leverage Compliance as a Selling Point: Emphasize your product’s compliance with data privacy laws as a competitive advantage, building trust with potential and existing customers.
3. Political
While the world has become flatter, more divisions are also being created. Events like war, trade tarrifs, diplomatics relations can also impact revenue.
A big SAAS company had significant revenue in Russia but when the US placed an embargo, you could not sell any more there. There was immediate loss of revenue. Something that no company could have foreseen.
This is hard to predict and even harder to react to. Best option is to diversify revenue and not have to rely on a few GEOs.
4. Environmental
B2B SaaS revenue threats related to the environment may be less direct than in some industries, they can still be significant. Environmental factors can affect operational costs, customer expectations, and compliance requirements, all of which have the potential to impact revenue.
Example: A B2B SaaS provider relies on a third-party vendor for certain components of its service. If the vendor faces regulatory issues related to its environmental practices, it may disrupt the SaaS provider’s operations, potentially leading to revenue loss.
5. Global Events
Global events such as pandemics or wars can create uncertainty and lower demand. Businesses may delay or cut back on their investments during such periods, affecting your revenue.
To navigate revenue threats posed by global events:
- Build Resilience: Create a resilient business strategy that can adapt to sudden changes. This includes having contingency plans, remote work capabilities, and financial flexibility.
- Diversify Your Offerings: Offer services or products that cater to industries less impacted by global events to maintain revenue streams.
- Support and Flexibility: Offer support and flexible terms to customers impacted by global events to foster goodwill and loyalty.
Conclusion
Launching your product is just the beginning of the journey. It’s not enough to simply introduce it to the market and assume your customers’ satisfaction will endure indefinitely. The role of a vigilant Product Manager goes beyond the launch – it’s about safeguarding your product’s revenue and ensuring its sustained success.
Never take customer satisfaction for granted. By relentlessly focusing on customer needs, adapting to change, and embracing innovation, you fortify your product against the forces that seek to threaten revenue.
