The Essential Guide to SaaS Product Management - SmartKarrot Blog

The Essential Guide to SaaS Product Management

The following guide will enable you to ace your SaaS product management strategy and supercharge your customer success through product-driven intelligence.

The Essential Guide to SaaS Product Management
The Essential Guide to SaaS Product Management

Most companies use SaaS applications for various functions throughout their organizations. SaaS or “on-demand” software goes back to the 1970s. Offering software-as-a-service products became necessary to make it affordable for companies to bring certain systems onboard. With both time and the internet boom, it became much easier to get access to various software solutions. Managing these software solutions became extremely important. The explosion of SaaS companies in more recent years is proof of the dynamic technological landscape of the business world during the previous decades. The shift of many major companies to SaaS and cloud operations has made it more important to find ways to manage them…and manage them well. This has had a major impact on the product space.

A SaaS product is basically an online software that users with a license can access. Managing it encompasses a wide range of responsibilities. As a result, product management has come to mean different things for different organizations. Studies show that, through effective product management, it is possible to increase profit by 34.2 percent on effective implementation.

Product management is a process that enables successful completion of the product lifecycle. It essentially involves designing the product better for higher performance with the right planning. SaaS product management is necessary to offer better solutions to customers based on their needs.

Screengrab from Google

What is SaaS Product Management?

SaaS product management is the process of driving the development, launch, marketing, and improvement of company’s products throughout the lifecycle. The tasks include a mix of tactical, professional, and strategic duties. Some of the key responsibilities in SaaS product management include:

1. Researching

Most product professionals’ conduct research to get expertise about the company’s product, market, target audience, user personas, statistics, and competitors.

2. Charting product vision

Product management professionals also have to map out the product vision. Understand the objectives of the product, the vision the company has in store, and create a plan accordingly. The vision needs to include goals, objectives, high-level discussions, and more detailed info of the product.

3. Sharing and communicating vision

By understanding market research and customer feedback, product managers need to define requirements and features of the product. This needs to be chalked into a plan and communicated with higher-level teams for internal planning.

4. Developing a strong plan

Once the vision is cemented by the teams at all levels, it is important for product managers to develop a plan. A strong plan including goals, objectives and more needs to be created to be presented to key stakeholders. Product management is a process that essentially involves many teams and people.

5. Creating a roadmap to maintain product

With the plan in place, the next step is to create a roadmap to maintain product plan. Having necessary teams combine to make a stellar roadmap leading to product success is what this role is about.

6. Working to improve product

After coordinating development and meeting team needs per the product strategic plan, it is time to introduce the product. Acting on feedback and data analysis helps product managers understand what works and what doesn’t. Working with the right teams will help fine-tune improvements to the product. At this stage, fixing any development bugs will immensely help product managers.

Product management
Source: Pat Howe

What Product Management Isn’t?

Product management requires a separate function because there are so many responsibilities. Just like sales or marketing teams, it is essential to get a separate product management expert. Product management is a highly strategic function and are expected to answer key questions, such as the who, what, when, where, and why about the product.

Product manager responsibilities in SaaS organizations include ensuring that the entire company is working towards shared goals in the organization. Theyy are also responsible for communicating product objectives and updates with the rest of the company. SaaS product manager functions are vastly different from project manager functions. There is a certain level of product-focused strategic thinking involved in product management requiring a separate skillset.

Who is a Product Manager?

Whether you have someone with this title or not, you probably have a product manager on staff. A product manager is the person in a company who is responsible for the internal and external product vision and leads the product development from start to finish. The product manager is someone who charts customer needs, understands customer requirements, teams with stakeholders, coordinates across required teams, and manages the creation of the requested product. So, the one person or team responsible for carrying out the overall product from start to finish is the product manager. Author Marty Cagan defines the purpose of product managers in his book, Inspired: How to Create Products Customers Love as the person “to discover a product that is valuable, usable and feasible.” 

As a result, a product manager has to be proficient and well-versed in three main aspects to succeed:

  • Technology
  • Business
  • User experience

Functions of A SaaS Product Manager

The functions of a product manager are broad. While they may assist at various tasks in the company, their key focus is essentially around the product.

Identifying opportunities

The first activity or function of a SaaS product manager involves determining an opportunity for a product. It can be developing a new product or improving an existing one. New features or upgrades can be involved as part of the customer feedback process. The product manager needs to know trends, the most recent data, and more to have a deep understanding of the market. When a company decides to launch a product to solve a particular need, a strategy needs to be developed to make it happen.

Develop product strategy and vision

A product manager first needs to have a long-term plan and overall mission regarding the scope of the project. There needs to be a clear plan on how to reach that crux of what customers want. To do so, product managers need to develop a product plan. Nearly 84 percent of SaaS product managers agree that setting up a product strategy is key to product success.

Team management

A product manager role has involves many other teams. Product managers need to make sure that all stakeholders and team members work together to achieve the product as desired, which is often their most important function. They need to communicate requirements clearly to the team and organize a plan that works best for everyone. A product manager also needs to manage and handle urgent requests with stakeholders, meet their expectations, and balance overall team needs.

Marketing information

Another responsibility of SaaS product managers includes undertaking marketing activities. Since marketing activities are the base of product success after launch, this is a key function. Market research, collecting competitor information, checking industry trends, analyzing customer feedback, making it UX friendly, determining a price and more are essential to this role.

Product improvements

It is also known that a product manager has to constantly improve the product before during and after launch. Everything becomes obsolete over a period of time. Product management requires managers to work on the product, analyze it, test it, check for improvements, bugs, manage defects, incorporate customer feedback and more. A SaaS product manager is required to constantly keep themselves updated about the product and work on the strategy.

Steps to Kickstart your SaaS Product Management Process

The SaaS product management process lifecycle is a mix of strategic and tactical actions. There are multiple stages that involve strategic thought, such as marketing.

On a deeper dive, the product management activities can be classified into two categories:

1. Inbound activities

  • Developing a vision
  • Product planning
  • Testing
  • Product development
  • Product launch

2. Outbound activities

  • Competitor analysis
  • Market research
  • Positioning and branding
  • Customer communication
  • Promotion
  • Sales and distribution
  • Analysis

The key steps in a product management process include the following:

Charting a vision

Product vision is an important part of product management. It defines the final product and shows how it is possible to create the product. The product vision defines the product, how to achieve it and more. It starts with idea management where the team brainstorms the new product based on the idea. A product manager sets the goals for this phase to answer key questions like:

  • What is the problem the product will solve?
  • What is the possible user persona for this product?
  • How can product success be measured?

Understanding customers

Customer understanding is another key to product success. Market research is the way to collect information about the product keeping customers in mind. It’s based on comparing similar products, studying competition, and checking target groups. Nearly 80 percent of customers expect companies to know and understand their needs completely. 84 percent of companies who are aligning to customer experience showed a higher revenue increase. A product manager needs to understand customers to create user personas, identify customer needs as per quality, choice, price and convenience. Studying customer behavior is another aspect of this product management lifecycle to understand motivation, campaigns and more.

Developing a strategy

Once the vision and market are understood, it is necessary to have a product strategy in place. A specific product strategy defines the goals, milestones and plan for the product. It defines the main features of the product with their users and key performance indicators (KPIs) mentioned. The strategy is a roadmap that involves:

  • Product key features
  • Market and user needs
  • Business goals

Product strategy roadmap is one that allows the team to have actions matched with timelines and goals. It is a great visual guideline for product managers and companies to know the working timeline.

Developing a product

Product development begins with understanding technical specifications, making a mockup design, creating prototypes and more. In a product management process, it is necessary to identify what users want and communicate that to the technical development team. The product management process involves core responsibilities like defining the minimum viable product and making sure it is released. It is also important to have a feedback collection mechanism, update according to the feedback and get the product ready.

Nearly 60 percent of product managers feel that their best ideas came from customer feedback. A product manager also needs to test their product frequently to understand feature usage engagement. It is important to get the minimum viable product (MVP) out and analyze customer reaction and acceptance to the product.

Sales and Marketing

At this stage in the product management lifecycle, it is important to start looking to launch the product. Sales and marketing teams need to build a launch plan based on the following:

  • Level of customer awareness per various promotional and marketing campaigns
  • Pricing based on product costs, value and competition
  • Timing based on customer acceptance, readiness, interest, need, market forces, etc.

Tracking for metrics

Once the product has reached the launch stage, it is time to go ahead and release it into the market. Monitoring the progression and analyzing data is very important here. The key metrics for analyzing product performance are outlined below.

  • Financial metrics such as monthly recurring revenue to identify revenue per month
  • User engagement metrics such as session duration, to understand how interested the user is in the product
  • Metrics reflecting user interest such as retention rate over a certain period of time
  • Product popularity metrics that show the number of sessions per user
  • Metrics demonstrating user satisfaction, such as a net promoter score that measures and defines the number of customers likely to recommend the product
  • Metrics like customer churn rate showing the number of customers who churn out after a specific period
  • Cost to acquire customer (CAC) shows how costly it is to acquire each customer
  • Lifetime value (LTV) of a customer shows the net profit each customer can generate in their relationship with your business
Source: RoadMunk

In SaaS product management, it is necessary to keep a note of the subscription revenues as a primary metric. Just choosing these metrics is not enough. It is necessary to follow up, analyze, and gain valuable insights from the data. These results will be helpful in understanding areas that need improvement, features that need to be upgraded and sales strategies that need to be fixed.

Working on product improvements

Once the metric-based information is available, the next step is to work on improving the product. Making the necessary changes will greatly help improve the prospects of the product.

To build a strong SaaS product management team, it is important to have a skilled SaaS Product manager. A product manager will be the one who influences every aspect of the business. This includes marketing requirements, customer needs, revenue streams and much more. For all these reasons, it is important to hire a successful B2B SaaS product manager who can handle everything related to products.

Best Practices Guide for SaaS Product Management

Given the variety of components involved, we thought a summary of some of the best practices for SaaS product management would be helpful.

Here are five excellent best practices for SaaS product management:

Get inspiration from a variety of sources

The product manager is not the smartest or most creative person in the room. Simply gathering, analyzing, and prioritizing the best ideas is their job.

And they can originate from anywhere, such as:

  • Customer consultations
  • Meetings with developers and designers to brainstorm
  • Workshops involving participants
  • Competitive research
  • Market analysis
  • Tickets for customer support
  • Market trends

The success of your product will depend on your capacity to sort through a large number of ideas, pick the best ones, and then convince the organization of their merit. Do not forget to be aware of confirmation bias, which is the propensity to seek data that confirms your pre-existing beliefs or suspicions.

You must formulate hypotheses and rigorously test them if you want to be truly data-driven. Try to disprove yourself rather than demonstrate your own righteousness.

Consider your product’s future in a strategic manner

Answering challenging questions in the face of insufficient information requires strategic thinking. There will always be some element of the unknown, regardless of how many customer interviews you conduct or how much competitive research, you conduct.

Being an effective product manager requires the capacity to choose product strategies that maximize return on investment. This could entail selecting from:

  • Adding a new customer segment to your app
  • Expanding your app globally

It is challenging to choose a direction when you consider that you always have a limited number of resources and that there is an endless list of bugs and improvements to work through. But the secret is to decide, begin gathering information, and change course as needed.

Converse with clients

Unusually many SaaS product managers do not communicate with their customers every week. Or they do, but only via chatbots or surveys. That simply is not enough to get to the heart of what customers really care about and why they would choose your solution over a competitor’s.

You require high-quality criticism. And conducting customer interviews is the best way to obtain it. Customers are more likely to open up to you because you took the time to hear what they had to say, so you are not only able to ask them deeper questions.

Invest your time in resolving technical issues

You do not need to be an expert in coding or technical details. However, you must be motivated to learn about your product’s technical aspects. It not only aids in decision-making regarding the course of your product, but it also helps you build relationships with and win the trust of your development team.

The best product managers engage their teams in technical discussions by asking questions. Over time, they develop the ability to recognize cues from developers about potential problems or concerns with the development. This gives the product manager a heads-up on any issues they might encounter or if they need to budget for potential developmental delays.

Don’t strive for perfection

Given that software is never completely finished, a SaaS product can never be ideal. Bugs and features that users feel are missing will always exist. Or alterations can be made to improve the performance of the code or an application. Being a product manager and striving for perfection is a sure-fire way to fail.

Prioritizing growth and learning over perfection is much preferable. Ship an MVP so you can gather feedback and advance instead of delaying the release of a new product or feature because all edge cases have not been considered. And prepare for the fact that you will iterate the product until its lifespan is complete.

7 Qualities Every SaaS Product Manager Needs

There are some essential qualities that every B2C and B2B SaaS product manager needs to be able to do, including:

Understands the product or service

A product manager should know the product and understand it deeply. Be it a start-up, small company, or large enterprise, product managers should thoroughly understand the product. They need to be able to create a sustainable vision of the product to satisfy customers’ needs now and in the future.

Understands customer needs

A product manager is expected to know customers’ needs and develop a plan that will keep their products profitable. A product manager needs to interact with sales, research and marketing teams to get better idea about customers. Understanding the customer journey and user experience is another important aspect a product manager should be able to shoulder. They also need to change their products to suit market requirements.

Aware of responsibilities

A SaaS product manager needs understand their responsibilities. They not only need to be able to create a vision for SaaS products in the foreseeable future, they also need to monitor and evaluate market trends to develop responsible plans and communicate effectively. Products attract customers to companies. Product managers control the design, scope, look, and pricing of the product, ultimately attracting attention towards the company.

Can anticipate problems

Anticipating problems is another skill a product manager needs to have. Complex situations are bound to arise, and SaaS product managers need to have the analytical skills to make it simple and solve the issue. A SaaS product manager needs to possess the mental stamina to pursue a situation until it gets resolved.

Has the required skills

Successful product managers are those who have a mix of soft and hard skills. Hard skills, such as education, experience, and time management, important. But soft skills are needed to create and encourage positive environment at work. They include compulsory skills such as communication, negotiation and mutual respect for co-workers and customers.

Has leadership qualities

Product managers need to have leadership qualities. Transparency, honesty, trust and skills that involve delegation are necessary. They need to be able to notice the innate strength in people and inspire enthusiasm for products. A good product manager is one who responds to the core issues of the product team and solves them. Leadership is considered an essential quality.

Can make decisions

SaaS product managers have a big impact on their companies due to the importance of their roles. They need to make tough decisions. If a product manager is not able to make good decisions when needed, it reflects poorly on the organization.

SaaS Product Manager responsibilities
Source: Career Karma

To build a strong SaaS product management team, there are other things to keep in mind, including:

  • Making sure that everyone on the team is aware of how success is defined and measured. Having set OKRs will help create a common overall shared vision and strategy.
  • Being constantly in tune with the fast pace of the industry is also important. If your team is able to handle their expectations well, they will grow.
  • Empathizing with customers. A great way for product management teams to build better products is by creating personas of customers and empathizing with them.
  • Informal meetings or product discussion threads can also be a great way to get insights on the product. This way product managers can get unbiased opinions from coworkers and teams.

3 Ways a SaaS Product Management Team Can Help Improve Customer Success

For a SaaS product management team to improve customer success, it is important to build great products. Customer retention is critical for SaaS companies and, to minimize churn, a high-quality product is vital. As your product grows, so does the company. Making the team believe in the idea and vision of the product is important.

Similar goals

Customer success and product management need to be aligned to scale. Both product management teams and customer success teams are bound by ensuring customers receive value. Product teams need customer success teams to do so. Conversely, customer success teams need product teams to sell that value to customers. This is what drives value.

Data-driven growth

Product management coupled with customer success are data-driven. They are a means to make customers reach their desired outcomes through qualitatively and quantitatively assessing data and its implications.

Improving understanding of customer behaviour

Product management helps create customer personas. This can be helpful in matching it with existing customers to fit them in a specific role. This is also beneficial for driving outcomes and aligning revenue growth metrics based on persona behavior.

The SmartKarrot Advantage

When you visualize how your SaaS product management team can contribute to growth, the right technology is imperative.

SmartKarrot has an array of features that facilitate the powerful mix of product experience and customer success. SmartKarrot’s product success feature seeks to leverage product interaction to understand levels of engagement and its impact on business. Informed product success decisions will improve interactions. The liaison helps:

  • Validate SaaS product management decisions
  • Set customer onboarding goals
  • Evaluate heat maps and hotspots
  • Drive personalized content
  • Track customer journey

Bottom Line: Improved Engagement and Product Usage for Customer Success

To make the right product management decisions, it is important to have the right information and insights. This intelligence and data will enable the right decisions by SaaS product management. Improved analysis of user behavior is the key to finding the right vein for your product.

Ultimately, an improved product management strategy coupled with customer-centric behavior will lead to growth.

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