A recent post on this blog identified different types of client feedback groups that small-scale B2B SaaS businesses can set-up to intentionally solicit input about their market and solutions. That post went on to assert that managing such groups can be difficult and costly in terms of time, resources, and money. In retrospect, that was probably only partially helpful. This piece aims to improve and expand upon the last one by offering (a) a case for why programmatic client engagement is well worth the investment and (b) a few tips for avoiding some of the (many) mistakes that we’ve made on this front over the years.
It’s Expensive // Is it Worth It?
Yes, it really is. There are countless ways that such groups can benefit SaaS businesses; we’ve coalesced around 5 big ones that we hope to get out of such initiatives.
1) Strategic Confidence: Having the customer’s voice (with real quotes and hard / quantifiable survey feedback) helps the team have confidence that the business and product strategy are on the right path. In one recent portfolio company example, the team identified a product extension that they believed would help them differentiate and win in the market. But it was just a hunch. Through a program of customer interviews, they learned this problem was far bigger than they originally estimated. The input they received came from a broad cross-section of clients, it was focused in its scope, and it was both quantitative and qualitative. In a word — convincing. As a result, they now have a lot of conviction around, and commitment to, their direction.
2) Credibility / Focus / Alignment: No matter how aligned internal stakeholders seem at the outset of any company initiative (particularly product-related ones), questions and doubts inevitably creep in over time. Such questions include: Are you sure you need that feature for MVP? Remind me again: why are we building this? What is the actual ROI / impact of this effort? Such post-agreement re-trading can be devastatingly corrosive (as discussed in this blog here). Instead, the best defense against such doubts is being able to point to concrete client input that was gleaned in a thoughtful way at the outset of the project.
3) No Round Heels: Pressure to undertake (or not) certain projects comes from all sides, particularly from customers. In another recent example, a large customer demanded that the business build a specific feature (raise your hand if this has happened to you…it definitely has). Instead, the company agreed to do a usability study with end-users, and included that customer in the process. The results were overwhelming, and took them in a totally different direction that was more aligned to company strategy. Such studies enable companies to push-back on client “requests” in a thoughtful, data-driven way…and avoid the “round heel” problem where customers are able to push the company around with very little ability for them to resist.
4) Thought Leadership for Realsies: Many early-stage SaaS business claim to be thought-leaders in their vertical or segment. Fewer have the goods to back up those claims. Genuine, ongoing client input through such engagement groups is the most sustainable way we’ve seen for informing legitimate thought-leadership. And this has utility far beyond product input. Rather, findings from customer research can be used to enrich sales decks, blogs, webinars and conference presentations.
5) Hidden Gold: Every once in a while, you can discover a gem that is pure upside. This happened recently when a portfolio company begun to spend many hours scoping out a prospective client-requested feature. With less than two hours of usability testing with a user group, they subsequently learned that the main customer benefit of that feature was something that could be solved with data that already existed in the system. They were ecstatic, and so were the customers — hidden gold that would have gone undiscovered without the input of that group.
Avoiding the Pitfalls:
Hopefully the case is clear for why client engagement groups are well worth the effort. So, now for a few words to the wise in terms of do’s and don’ts for managing them:
1) Start Small: This seems obvious…but that doesn’t make it any less important. It’s common for small-scale SaaS businesses to enthusiastically launch a customer advisory group with much fanfare and grand pronouncements for the future. Avoid that. Far better to start out with some surveys or interviews, and then work your way up to some initiative-based (short duration) groups. This allows for ongoing iterations based on learnings along the way.
2) Manage Expectations: Nothing can more quickly undermine your good-faith efforts to engage with customers than misaligned expectations. Accordingly, it is critical to set accurate expectations with whichever type of group you are convening. What is the group’s primary goal and area of focus? How often will it meet; what are the time commitments? How long is the term? Laying these out clearly up-front will allow you to hold people accountable to those standards. Failure to do so makes it hard to do so. Finally, and most importantly, be crystal clear up-front with participants exactly how you will and will not use the data gleaned from these efforts. And…no matter how small the initiative, be sure to follow-through / close the loop with those customers after you’ve concluded the effort.
3) Balancing Brains v. Bravado: As mentioned earlier, you’ll rarely, if ever, have enough information to make decisions based on statistically significant data. So, judgement is required. Specifically, it’s important to acknowledge the ongoing need to balance following your gut / assumptions ( the “Bravado”) versus waiting to collect ever-more data to inform decisions (the “Brains). It is indeed a balance, and this tension / imperfection needs to be both acknowledged and actively managed.
4) Budget…Just…Budget: These are not cost-free endeavors. No matter how scrappy and lean the effort is, these require an investment of time and hard-expense. Embrace that reality and set a reasonable budget to be managed by the people responsible for it. Otherwise, the expenses from this effort will by-definition eat into other initiatives, thereby fostering resentment and undermining organizational commitment from the get-go.
Hopefully this follow-up post offers a valuable expansion upon its predecessor. In sum, investing in customer engagement is well worth the effort. But, as in all things, a bit of forethought and awareness of pitfalls should make that endeavor more rewarding with less risk.