Do you want to grow by winning more, serving more, or charging more?

3 plants widescreen

Is your biggest growth goal to win and retain more customers, serve more segments, or charge more per contract? Does your product roadmap match that strategy?

You probably have a laundry list of customer feature requests, enhancements promised by sales, and team pet projects in the development backlog—which ones should define your roadmap, and which should stay in the queue? The best way to answer that question is to make sure that you’re using your high-level strategy objectives to guide your prioritization. There are at least 3 overarching growth objectives you could choose to be the guiding star for your product development efforts. The catch? Each will lead you to build different things.

1.      Win or keep more core customers

This might be a priority if…

Churn has spiked, or you’re increasingly losing deals to competitors.

Product development to prioritize: feature parity

If customers are churning to competitors, or if you’re losing them to competitors in the sales process, you could have a feature parity problem. That’s not the worst news, you can use your competitor’s feature set as a roadmap cheat sheet. But be careful not to just replicate everything your competitor offers—you may not need to. Use insights from your sales team and user feedback to understand which features really matter to customers.

One important caveat: if customers are churning back to using nothing or a manual process, or if you’re losing deals to “no decision”, you may be facing more of a pivot than a tweak. It could be a product-market fit problem, and/or you could be targeting the wrong segment.

If churn isn’t your problem…

Avoid the temptation to bump every request made by loud, established customers to the top of the list. You absolutely want satisfied customer advocates, but if you’re confident your product is already a great fit (low churn, strong win rate), your customers will likely stay and thrive without all of the additional trimmings. Your team only has so much bandwidth, try not to use it up on projects that won’t move the needle when it comes to revenue.

2.      Sell to an additional set of customers

This might be a priority if…

You already have a strong go-to-market strategy, but you’re having trouble generating enough deals to meet your growth targets.

Product development to prioritize: features for a specific new segment or market

You’re probably going to want to sell to a different customer segment, or even a different market, and there’s a good chance these new customers will have different needs. Spend time first understanding your options: which new segments are you considering and what is the opportunity size that comes with each? Once you’ve decided who to go after, focus tightly on that customer. Solving for a third of the needs of each of three different customer segments won’t have the impact you’re looking for. Focus will also make it easier to efficiently market and sell to that new segment.

If volume isn’t your problem

If you’re lucky enough to have plenty of interest to meet your growth goals from your core customer type, don’t diffuse your focus by adding other segments into the mix. Instead, make sure your core product is reliable and scalable. And, consider investing in features that you can upsell and cross-sell—the 2016 Pacific Crest survey of SaaS companies found that on average it costs almost 75% less to upsell $1 into an existing customer than it does to sell $1 in new ACV.

3.      Sell more to each customer

This might be a priority if…

Your market has limited greenfield, or limited annual growth. You might also look to drive ACV to take advantage of a loyal customer base (low churn), or to make up for a lack sales and marketing fire power.

Product development to prioritize: new feature tiers for the same user, or a new offering for a different need at the same company

The first way you can sell more per customer is by identifying your power users, and offering them something premium. You probably already know who these customers are, and you already have established relationships—use that to your advantage! Use customer feedback, prototyping, and user testing to understand what other functionality your customers want (and are willing to pay for). Another option is to identify unserved parts of your customer’s organization. For instance, if you sell a tool into their sales team, is there a gap in their marketing operations that you could fill with a complementary product?

If upselling isn’t your problem

The growth that can be derived from upselling and cross-selling is limited by the size of your customer base—if you already have product tiers or multiple products, you may have already harvested some of that value. As you continue to optimize your upsell/cross-sell strategy, try to gauge whether you’re investing in development your base will be willing to pay for.

Decide what you’re not going to do

Prioritization is as much about deciding what you’re going to let slide (for now) as it is about choosing your focus. For instance, if you’re doubling down on entering a new vertical, it may mean that you won’t be building anything new for your core customers for a while. Try to have one clear mission per product team, and make sure everyone is agreeing to the same trade-offs.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s