Every SaaS company, whether B2B or not, looks to get more intimately connected with their customers’ needs and pains to grow. Which one wouldn’t? Some employ product-led growth In order to understand customer needs, get more customer feedback, and use it actionably. Without question, the rise and importance of SaaS product management within digital companies are “mooning” 🚀. What do I mean by this?
SaaS product management is undoubtedly the engine that helps digital enterprises grow. According to one study, a great product manager can be responsible for up to a ~34% increase in profits. And in the age of Product-Led Growth (PLG), a term coined by now-pioneer Wes Bush, product management and customer-led product development are the lynchpin to SaaS business success.
At Usersnap, we have a particularly strong connection with SaaS product managers. Saas PMs are a key customer group, and consistently offer us very valuable insights to improve our product. We dug deep into their work throughout several research projects; when talking about SaaS PMs, we like to think that we have some idea of what you’re up to 😉. Although if you read this and disagree, you can always correct me.
In this article, we’ll define SaaS product management, PLG, and how the two connect. Additionally, we’ll go into the traits of SaaS product managers who build great products. Finally, we’ll leave you with some best practices while on the job for SaaS product managers in 2024.
What is SaaS Product Management?
SaaS product management is the integral process and execution of bringing a company’s digital product line to market (e.g. “Go-To-Market”), from start to finish. The product life cycle requires research, strategy, internal company alignment, product development, and consistent product refinement. All of these require SaaS product management and a SaaS product manager to be in the middle of.
Research
SaaS product managers do research from start to finish within the product development life cycle. How? From the beginning, SaaS product managers will hypothesize about problem spaces, which they either know something about or not. From there, they will try to develop ways to better understand those problem spaces. Some examples include customer satisfaction surveys, net promoter score questions, and user interviews (shown below).
When there’s an unkonown problem space, they conduct generative (discovery) research on the topic to try and better understand the problem. Alternatively, when the problem space is well-known, this is called evaluative research. Why? Sometimes, a PM has already received feedback on this topic (from teammates, customers, or tertiary research sources)
In short, generative research will unlock the unknowns for the product team, and create the foundation for product initiatives. On the other hand, if the problem space is already quite well-defined, a SaaS product manager will dig deeper into the problem space, where they will conduct evaluative research.
Strategy
SaaS product management requires extensive strategy in order to execute on hypotheses or defined product initiatives. What does this mean? Product managers need to know where the company wants to head, what type of hurdles (competition, resources, etc.) are blocking success, and how to best chart the course in a cost-effective way. Sometimes you as a PM will also be a product owner, and when that’s the case, you’ll need to rely on team feedback to make sure that your approach isn’t’ short-sighted.
“Identify a very big market, if your market is small nobody will want to invest and not even you, you will feel like you’re wasting your time” – SC Moatti
Part of this requires having a solid product vision. What does this mean? Offering a clear idea of what the purpose of your product is, and the positive change it brings about for customers. Keeping this product vision in the back of your mind while iterating on product strategy keeps you closer to being on the right track.
Internal Company Alignment
Another integral requirement to defining SaaS product management is getting everyone on the same page. Whether it is the technical feasibility of a particular feature or marketing promotions, it can be difficult to make it clear to all colleagues why one approach, product, feature, or initiative is better than another. Without this clarity, colleagues will be hesitant to go 110% for the activity in question. And even if they give 110%, without clarity there is the possibility of wasted time, resources, and effort doing the wrong things. This is why SaaS product management requires consistent, clear communication with internal stakeholders to get them to act.
An example of this would be marketing and product management collaboration. If the marketing team doesn’t understand what the latest feature actually does, who it serves, how it functions, and how important it is, the promotional communications can get sideways really quickly. Unfortunately, this can happen all too often, which is why internal company alignment at the start of a project is a must.
Product Development
Once research, strategy, and internal company alignment are in place, then the core of SaaS product management takes place: product development. What does this mean in practice?
- Prototyping what the proposed solution should look like (with the design team), and getting initial feedback from customers.
- Specifying to the software engineering and design team what needs to be done in order to release the next iteration on time.
- Maintaining time discipline to meet the required deadlines.
Product development becomes the nuts and bolts of SaaS product management, and product managers need to keep focus during this phase so that the right proposed solution comes to life.
Product Refinement (Through Customer Feedback)
Last but not least, once the SaaS product management team releases the latest iteration, then it is time to get feedback from users. The feedback could come in the form of
- Bugs and issues
- General feedback
- Satisfaction on that part of the product, or
- Requests and suggestions.
With that information, the product managers in the team need to go through this feedback with a “fine-tooth comb”. One-by-one, they place each piece of feedback in the right bucket to its eventual resolution.
For example, if there is a bug or consistently low rating on a part of the product, a SaaS product manager needs to identify the severity of it, and determine the time frame to act on it. Maybe the bug or consistently low rating is a “hair on fire” situation that needs to be put out immediately. Perhaps the issue identified isn’t stressful enough, and only the ends of the SaaS product management team’s hair can be scorched without any problems.
Additionally, if there is a suggestion for how to improve the product, this might go into a backlog and future discussion on what to build or iterate on in the next quarter.
Finally, SaaS product management means getting back to the customers, and letting them know that their concerns are serious. When a bug or feature request addressed, SaaS product managers should tell their customers that it was handled. Without this follow-up communication
What is Product-Led Growth (PLG)?
As recently as February 2022, Wes Bush (the inventor of the “Product-Led Growth” term) defined PLG as “a go-to-market strategy that relies on using your product as the main vehicle to acquire, activate, and retain customers.” It has skyrocketed in the last few years for two reasons.
On one hand, the sales-driven approach is quite saturated for digital consumers. Simply put: people have had enough of marketing, surface-level content, promotion, sales, and ads. Studies show the effectiveness of advertisements are grossly overestimated (by up to 4,100%) by the people crafting them. On the other hand, these approaches are proven to work less and less over time. Studies show that less than 1% of leads that come to a business via gated content actually convert into customers.
Product-Led Growth focuses on a customer-centric approach to onboarding new users in a simple way, while constantly providing value throughout one’s user journey until the obvious point of conversion. Once the user has had hands-on experiences with your product, they become a Product-Qualified Lead (PQL). When that same user realizes they can no longer do their job without your tool, the likelihood they convert increases. Once they’ve converted due to the product-led experience they received, you continue to educate customers on the consistent value provided.
For these reasons, PLG has gained quite a bit of traction in the product management space and SaaS industry at-large. Its framework gives sense to the often chaotic approaches and environments SaaS product management teams must face.
How is SaaS Product Management the Central Nervous System to Digital Companies?
Simply put: good SaaS product management is the vehicle that drives PLG. The success of SaaS product managers and product teams requires a shift toward the PLG mindset. Product strategies are partially informed by data, and PLG places a strong emphasis on understanding user data in order to make product decisions. No SaaS product manager wants to be shooting arrows in the dark. As SaaS product management embraces the PLG mindset, PMs get closer to driving more and more customer-centric product initiatives. And because of this, the sooner PLG becomes the norm in every digital organization.
Additionally, PMs can leverage the PLG mindset to change the approaches of colleagues outside of the SaaS product management team. What do I mean by this? When other teams also recognize the need for the PLG approach, they’ll view their products with customers in mind. This shift in mindset and approach gets teams to see product quality and ability to deliver on a persona’s job-to-be-done (JTBD). Here are some do’s and don’ts for effective SaaS product management
| Do’s | Don’ts |
|---|
| Know your product | Underestimate the power of communication |
| Be organized | Forget product re-evaluation |
| Make engineer’s lives easy | Allow feature creep |
| Listen to customers | Assumption is the motherload of screwups |
| Own your Product & your mistakes | Escalate things that can be resolved within your immediate team |
| Pay attention to details | Blame others for mistakes: own-up |
Also, here is a quick checklist you can always refer to when it comes to SaaS product management.
| SaaS Product Management Activity | Done and Validated? |
|---|
| Minimum Viable Product (MVP) | ✅ |
| Defined USP | ✅ |
| Realistic Timeline Creation | ✅ |
| Feedback Collection and Innovation | ✅ |
| Product Testing | ✅ |
| Pricing Setting | ✅ |
| KPIs Formulation | ✅ |
| Team Coordination | ✅ |
| Competitor Attention | ✅ |
| Conduct Target Market Research | ✅ |
| Product Launching Strategies | ✅ |
| Fully Functional Products | ✅ |
| Product Demo Creation | ✅ |
| Sales Deck Preparation | ✅ |
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