The Five Phases of SaaS Product Management

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My first real job was as a product manager at a software company in 2002. I remember sitting in my tiny windowless office and booting up my Windows XP laptop for the first time. And I remember asking the product manager in the next office to help me onboard and answer some basic questions like, “What does a product manager do?”

His response: “We ship stuff every 18 months. Your job is to figure out what the sales team needs to close their deals, write it down, and pass it on to engineering. Occasionally, a Gartner analyst will tell you what needs to be done, and you should write it down as well. Replies like this left me wondering, “So what exactly am I doing here, Bob?”

While the work was complicated back then, product management is manic today, with nearly every SaaS company claiming to be “product-centric”. A notable change from the past is the adoption of the agile development model which compresses the planning time for release cycles from 12-18 months (old waterfall model) into an endless cycle of 2 week sprints. Another change is that back then, contributions came mostly from sales and analysts. Today, this includes, but is not limited to, online community feedback, reviews, user surveys, product telemetry, contributions from analysts and internal teams, and the growing CEO tribe. “product oriented”.

Despite all of these challenges, product teams have continued to move forward and evolve as businesses become more sophisticated. Gainsight recently collaborated with Method Garage, a customer journey consultancy, to map product management maturity stages and what every business should be doing to take it to the next level.

THE SAAS PRODUCT MANAGEMENT MATURITY MODEL

PHASE 0: STATUS QUO

Everyone starts here. It is the land that produced the product requirement documents and GST reports.

On a more serious note, many companies today still operate as “feature factories,” where the primary mission of the product organization is to “ship” a release every 18 months or so. The on-premises software world can be hardware-driven or monolithic and doesn’t require constant innovation.

Companies in this phase have moved their product to the cloud in terms of hosting and pricing model, but still operate with an on-premises mindset when it comes to product management. No company should stay in this phase for long. The sooner they change their mindset, the more ready they will be to embrace SaaS growth.

PHASE 1: AGILITY AND DATA-DRIVEN

“Let’s be agile, this will solve all our problems.” These are the famous (last) words of many product managers trying to move from phase 0.

In this phase, companies begin to embrace the unique power of the cloud, which gives them the ability to see what users are doing through telemetry and product analytics. Even if companies don’t always know what to do with the data and the new vision they have, they at least know how customers are using their products. At this stage, the voice of the customer becomes dominant and he begins to integrate external comments for validation.

The best teams in this phase come to common definitions for adoption and usage across the product team and customer-facing teams like customer success, so everyone is rowing in the same direction .

PHASE 2: EXPERIENCE-DRIVEN

Now that product managers can “see” their users, it’s only natural to want to know more. Product teams in this phase want to go beyond pure usage data to understand user sentiment. They can leverage in-app surveys to measure the user’s Net Promoter Score or poll users on how easy a feature is to use via a customer effort score.

In this phase, the product teams begin to get even closer to the customers (sales and customer success teams) since the “experience” for the customer is not limited to the product.

PHASE 3: FOCUSED ON SUCCESS

The fact is that customers buy SaaS products to optimize their business results. They don’t care how often you “ship” or your “uptake” rates. In recognition of this, the goals of the product teams shift from “shipping” to “adoption” to “results”. How can a product manager ensure that their functionality generates the value expected by customers?

During this phase, product teams work closely with customer success teams on developing frameworks to measure customer results and match feature requests to the results or value to which they relate. They also collaborate with each other on “success plans” for key customers to understand their overall business goals.

PHASE 4: REVENUE-DRIVEN

This whole maturity model is about putting companies on a more repeatable and sustainable growth trajectory. The most successful SaaS companies leverage product-driven growth to have their product drive the lifecycle as much as possible, from trial to conversion to onboarding, adoption, renewal and expansion. According to Gainsight’s Product-Led Growth Index, 2022, “a PLG movement already exists in 58% of companies surveyed [and] 91% of surveyed organizations that adopt PLG plan to increase their investment in PLG strategies. »

For existing businesses, PLG is not an “on” or “off” switch: they must find ways to adapt PLG practices to the reality of their business. Some might keep selling “land” as a high-impact model, but create ways for customers to try new “paid” features in the product. Others might choose to invest in creating a digital renewal experience.

Whichever route you take, PLG requires close collaboration between product, sales, and customer success teams, as customers need to seamlessly transfer from product streams to high-touch teams and back again. Remember that customers care about the entire experience your business provides.

Over the past two decades, SaaS has completely changed the way we do business. Each department and chief had to rewrite their own personal manuals. It’s exciting to see how product management teams are leading the charge and reinventing themselves. Thankfully, the days when people asked themselves, “What does a product manager do?” are behind us.


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