Finding Your Focus Pt. 3: Product Value

In this final post as part of our “Finding Your Focus” series, we’ll discuss the importance and discovery of your “product value” focus.

In part 1, we laid out all the reasons why so many SaaS companies find themselves struggling with focus, and highlighted the case of the company that finds themselves with fuzzy focus after years of moderate success. In part 2, we delved into ways that this kind of company can discover and re-define their target customer by leveraging insights within their existing customer base. In this post, we’ll finish off with guidance around finding your “product value” focus, or in other words, the specific value that you’ll provide your target customers that will be unique and differentiated in the market.

Even once you’ve defined your target market, it’s easy to spread yourself too thin with the product that you offer. Especially for younger, smaller companies, it’s imperative to find that slice of value where you can go deep and differentiate yourself from competitors. Once you find great success with one or a few things, then it might make sense to spread into more things…but not before.

I’ve always been a big fan of businesses like cupcake shops. These are small businesses, usually found tucked into strip malls, shopping plazas or sometimes exclusively online. They typically don’t have a huge brand presence or advertising budget, but what they do have is focus. They’re not trying to be a full fledged bakery out of the gate, but they’ve decided to focus on one popular bakery item and make the best damn cupcake you can buy. These businesses usually increase their customer base by word of mouth, being known for one thing and by having an awesome product. Once they grow to a certain point, they sometimes expand into additional offerings.

So, to take the cupcake shop analogy a bit further, what if you’re a full bakery that’s reached a point of moderate success but needs to get focused in order to really grow to the next level? Or, what if you’re a B2B SaaS company that has grown your MarTech / CRM / AdTech / Project Management / Analytics / <insert your domain here> platform to a reasonable level of success but need to figure out where to go deep and win for the long term?

Similar to discovering your customer focus in part 2, your existing customer base will offer a treasure trove of insights given the right lens and questions. In this case, the lens will be your target customer. Don’t get distracted with non-target customer feedback. The 10 questions below, when asked through the lens of your target customer, will provide invaluable insights and guidance that will help lead you to find your “product value” focus.

1. What problems are you trying to solve for your target customers?

This is the foundational question that you have to answer and write down so that everyone in the company understands what the product is trying to do (and not do). Many of these insights were probably unearthed when you did your internal interview as part of your target customer discovery in part 2. Start there, and continue with the internal interviews to fill gaps that you have. Concentrate on the customer facing teams and executives. Once you get signals from these conversations, take your hypotheses to target customers and validate (or invalidate) the needs and problems the product is best at serving (without asking leading questions).

2. Why are target customers buying?

What part of the product value proposition is most important to new target customers when they decide to buy? It’s good to start with a list of hypotheses based off of internal and target customer conversations. Once you have your list, if you haven’t already done so, install an automated post-purchase survey that goes out to new customers shortly after they purchase. Ask them what the most important driver of their purchase was out of your list of possibilities. Don’t forget to leave an “Other / write-in” option.

If you don’t already have this data on hand, to fast path some initial data, manually send the survey out to new customers over the past 90 days while you’re waiting for new data to build up going forward.

3. Why are target customers NOT buying?

This one is just as important as the one above. There might be a vital value area in the product that needs to be shored up. This will also require you to have prospect profiling data on hand in order to ID the lost prospects that fit into your target profile. Similar to the “post purchase” survey, ongoing automation of a lost opportunity survey is the best way to go long term.

However, if you don’t have this data on hand yet, try manually sending out a one time survey to lost prospects in the past 90 days to jumpstart your efforts. You may also have to incentivize responses (gift card, chance to win gift card, etc.). Unlike new customers, lost prospects have less reason to take the time to provide feedback.

4. Why are target customers leaving?

Churn reasons are hugely insightful for identifying product value gaps. Thus, having an ongoing way of collecting and surfacing target customer churn insights is equally important. It’s also super important to ensure that churn reasons are insightful and not too generic / broad.

If you sell a very low-touch, transactional product then it probably makes sense to have an automated survey go out after each cancellation to collect the cancellation reason. If you sell a higher touch, longer term product then it might make sense to conduct a monthly churn meeting between the CS and Product team to discuss reasons. In any case, it’s vital to have a centralized repository that makes it easy to pull churn insights when needed.

5. Why are target customers renewing?

In the context of discovering your product value focus, this one is probably even more important than churn reasons. Insights around target customer renewals help you understand the most important product value areas that are driving repeat customers. These are the areas to double down on. Similar to the previous three questions, it’s best to have an automated survey or process that collects this information upon renewal.

And again, if you don’t already have this data on hand, it’s easy enough to send out a survey…or conduct interviews…with repeat customers from the past 3 – 6 months to get you started.

6. What top improvements are target customers asking for?

Similar to “churn insights”, looking at broad insights around target customer requests can shine a light on product areas that are both important and in need of improvement. It’s important to facilitate the ongoing collection of this feedback directly from the customer as well as via customer facing teams as a proxy for customer feedback. Make sure that customers and customer facing teams alike have the ability to submit feedback easily, when they want to, and you have an easy way to access the feedback to pull insights. A combination of tools like Slack and Pendo can provide everything you need.

And, as always if you don’t already have the data, manually survey and have conversations with target customers to get some initial data while you’re setting up the longer term solution.

7. What is the product doing exceptionally well?

The easiest move to get focused is to do more of what you do best. In addition to conversations with customers and customer facing teams, a great source of this insight can be an ongoing Net Promoter Score (NPS) survey.

The nice thing about the NPS survey is that there’s a standard required question (“How likely would you be to recommend…”) and a standard follow-on, optional question (“What’s the reason for your score”). Automated collection from target customers 1 – 2 times per year will give you an ongoing pulse of what’s contributing most to customer satisfaction…and dissatisfaction (see below).

For this question, look at insights into top reasons behind scores of 9 or 10 (promoters) in the survey.

8. What is the product NOT doing exceptionally well?

When looked at through the lens of your target customer, this question can render insights around soft spots within important product areas…and possibly areas that don’t make sense to fix or focus on going forward.

A great way to surface this insight is by doing the inverse of the NPS survey analysis above. Instead of focusing on the 9’s and 10’s (promoters), focus on the 1 – 6’s (detractors) and the reasons they provide as the biggest contributor to their score.

9. Is there a competitive gap in the market?

As an additional datapoint, is there an area in your competitive space that is underserved and maps to strengths and core competencies that you have in the product? Even in a crowded market, there are usually value areas that are underserved and represent an attractive market opportunity. This is particularly frequent in markets that are dominated by large, enterprise-level businesses where the focus on large scale growth and offering breadth has left opportunities open to differentiate within sub-areas of value.

10. What are your distinct competencies and unique assets?

This question could just as easily appear at the top of this list as at the bottom. Even if the previous 9 questions unearth a value slice that seems to make sense as a focus, does it leverage your strengths and resources as a company and team? Does it align with the resources you already have or does it require a big resource investment to pull off? Does it align to the mission and fabric of the company? Are employees excited about this area as a focus? Does investing in it put you in competition with a new set of businesses? Whether you ask this question at the beginning or at the end, it needs to be part of the decision making process when choosing your product value focus.