Lately, I’ve been thinking about how to prove value with a product, whether its in SaaS or otherwise. Where do the pitfalls lie? How can your customer blame you? How can you do better over time? What if you can’t prove your value?For us as SaaS lenders, proving value should be relatively straightforward. With our capital working in your business, you can either generate ROI or you can’t. If you can’t, that’s not great for us or for you. That’s why it’s important for us in our process to work with you to go through the exercise of modeling your investment plan and how we play a part. What efforts will the money support and what return do you expect it to generate for the business? If that return is greater than the cost of the money (what you pay us over time), then we should be good to go assuming all else is as presented. Namely, that we live up to our end of the bargain to act as a good partner holistically and your plan is not pie in the sky and actually something you can execute on.As a SaaS founder, you too need to consider what value you’re delivering to your customers. At the end of the day, nothing is more important than proving to your customer that you’re valuable to them. It’s how you keep them paying you and get them to introduce you to and serve as your advocate for other potential customers. Here’s what to consider when determining whether or not you’re providing value.
Is there a burning problem?
For us, we’re only solving a problem for our companies if: 1) their growth is directly constrained by available capital to invest, 2) they’re truly ready to invest in growth (i.e., unit economics are working) and 3) they lack access to ample, appropriately priced capital that will generate ROI. If any of these is not the case, we won’t deliver value and it’s not worth pursuing, for us or the company.It’s the same for any business. If you’re not addressing a burning problem for a customer, you likely should look elsewhere as it’s really hard to grow your business that way. You’re just selling a vitamin. You’re a solution in search of a problem and you just can’t deliver that much value. You’re a nice to have that may sound like a decent idea, but you’ll likely have a really hard time actually selling in a profitable manner if you aren’t solving a real problem.
Are you really to blame?
Unfortunately, placing blame on others for one’s own failures is quite a common thing. While you may not have played a part in your customer underperforming with your product, you still may be blamed for it. I think of lead generation and how hard it can be to prove ongoing ROI. Let’s say you provide a lead gen solution. Your customers get leads from you and can engage with them through your product. You may have a great solution — you’re consistently delivering qualified leads, you’re helping the salesperson communicate with them in an efficient manner yet conversions have not materially increased. Hmmm. You’re now battling a churn problem that is really hard to cure. Ultimately, there’s only so much you can control. Maybe your customer’s sales team is not that good. Maybe the VP Sales does not push them to perform. Maybe they both blame you! You’ve done your duty but are still on the chopping block due to their underperformance. You can invest a lot of time and effort into trying to help them be successful but, ultimately, they will need to help themselves. If they’re not able to do so, you both will suffer the consequences.
Takeaway: There’s only so much support you can provide. Ultimately, some things are just outside of your control no matter how hard you try. You have to recognize these patterns and adjust accordingly. Before you even start operating in a space, you need to suss out how customers’ perception of value and what constitutes success with your product.
How to Confront: A company operating in lead gen that does a great job of recognizing and confronting this fundamental industry challenge is LeadFuze. If you’re looking for inspiration for how to help your customer better engage with your product and truly get the value you deliver, check out how they approach it. And, if you’re looking for a great lead gen solution, give them a go.
What job are you doing?
First, you need to determine and showcase what job you’re doing. Then, you need to show how you’re doing it better. Better = at least adding some value. Maybe you’re automating something and providing meaningful cost savings, or you’re widening the funnel and increasing revenue potential, or you’re increasing engagement and combatting churn. The point is: You’re doing something that tangibly provides value. Value your customer can recognize and you can point to. You may perform multiple jobs. If so, don’t be a partial solution for the job. Maybe you just crush one job that everyone sucks at or hates. Whatever it is, know your job and strive to do it better than anyone else.If you have thoughts on proving value, please share them. I really can’t think of anything more important to having a successful business.
