Mind the SaaS GAP

Do you know what the GAP is between your product's capabilities and the customer's expectation for achieving value and ROI?

Being a market leader in SaaS is becoming more challenging each year. Once a market is hot, there are more competitors that jump into the market. Staying a leader in the market is based on the SaaS company’s ability to deliver on customer expectations. Customer’s expectations are becoming more demanding in the technology space. They want products that can deliver innovation, efficiency and ease of use.

The secret for SaaS companies to become a market leader and maintain their leadership is to understand what the customer expectations are for the market they serve and the problems they are solving. It may be a great product, but do you have plan for how to guide a customer to operationalize your solution in their company? Have you defined the outcomes and deliverables the customer requires to realize value worth continuing to invest in?

The most successful SaaS companies have spent time with the customers in each of their target markets to understand what outcomes are required to be delivered to confirm realized value and ROI. They do this by being realistic about what the product can deliver out of the box. They then identify the GAP between what the product can deliver and the customer expectations.

Once the GAP is defined, they can discuss what they need to offer to fill the GAP. In some cases, it could be an online self-help center, while more complex solutions may require the definition of specific types of services that are required to fill the GAP.

The diagram below depicts the GAP that may exist for any software company. It’s important to define what is required for customers to operationalize the solution. This is what drives consistent GRR and NRR results. LandNExpand walks their clients through a process to understand if there is a GAP and what is required to fill the GAP:

GAP Analysis between Product Capabilities and Customer Required Value Outcomes
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Defining the GAP

There are 4 steps that will help the product and GTM teams work together to define the GAP.

Step 1: Define the specific customer outcomes required for each GTM play defined in the GTM strategy.

Step 2: Evaluate the product capabilities to deliver the outcomes with no services.

Step 3: Define what is missing (the GAP) to guide the customer to operationalize the solution

Step 4: Define the types of services that could fill the GAP to lead customers to operationalize the solution in production

The key to success in this process is to have the right team members form a tiger team or committee including members from the GTM teams, consulting and implementation experts, and Product and Engineering teams. It is helpful to have an executive leader as a sponsor, but very important to have team members with various knowledge, skills and experience with the product, market and customers. The team will want to use customer data to guide this conversation and not internal anecdotal stories.

Step 1: Define Customer Outcomes Required

From the GTM strategy, the team would evaluate each GTM play and define the specific customer outcomes expected for that play.

For example: 

GTM Play: Engineering Optimization Solution, focused on Manufacturing and Retail industries, selling to CIO, CTO Sponsors, VP IT or Engineering Economic buyers, IT Engineering Managers champions who are responsible for optimizing the effectiveness of the engineering team in improving internal system processes, integrations, automations and AI services. 

The customer high value outcomes could be:

  1. For Manufacturing: Design IT solutions to Optimize the job shop workflow and communication for each work stations along the manufacturing process to minimize errors and reworks

  2. For Retail: Design IT solutions to Optimize the retail floor to increase the customer average purchase per visit by 20% 

Step 2: Evaluate the product capabilities to deliver the outcomes with no services

Once you have the outcomes defined, the product and CX teams can use these outcomes to discuss how the product can achieve these outcomes. The discussions can go into detail on various ways to configure the product, design processes by personas, utilize AI, analytics, recommendations and reporting to provide the customer with a fully operationalized solution.

It will turn into a natural discussion of where the gaps begin to appear in what the product can do and what the customer can figure out organically. This leads to the definition of where the customer may need some additional guidance to understand how best to configure the software to achieve the outcome(s).

When evaluating the product capabilities, it is important to put yourselves in the shoes of the novice customer and be honest about how much they could figure out on their own based on the current product design and UX capabilities to guide them to how to configure the solution best. The question to answer is: Can the customer operationalize the solution on their own with what is available within the product?

This can include an in-product help capability that guides them through a step-by-step configuration or implementation process. Whether that is utilizing AI capabilities or a Digital Adoption Platform (DAP) solution that is in-product, if the customer can login and have some form of in product guidance showing them how best to configure the solution to get to the outcomes expected with no outside services required, then you can consider it a product capability.

Step 3: Define what is missing (the GAP) to guide the customer to operationalize the solution

As the teams finalize their conclusions from step 2, they may have started to define some additional services needed to fill in the gaps to help the customer follow an easy step-by-step plan to get to the expected outcomes in the shortest period of time with the least number of challenges.

This could mean as they walked through how a customer would setup and configure the solution to automate a specific process, they ran into stumbling blocks or challenges. Some of the challenges may be that the software is not intuitive as to what to do next or how to setup advanced features and functions to complete all the requirements. These may be defined as education services or content they could add to the in-product AI or DAP capabilities. The roadblocks or challenges could be areas where it depends on what the customer’s unique requirements are because the software has the capability but there are many ways to configure the solution to achieve the outcome and in some cases there are custom configuration options. This could be defined as a consulting type service required to ensure the customer understands that the solution can meet their expectations.

Using the example above for Manufacturing, the teams may conclude that although the software has all the capabilities to deliver on the outcome, it will require some advanced configurations that are not very intuitive. For instance, customers at the enterprise level have much more complex requirements and therefore would require a more custom configuration that would require expertise in Manufacturing processes and the product. The team would then begin to define this as a consulting service required to guide the customer to the outcomes in a more streamlined process and get there in a shorter period. Which means, they understand that if they leave this to the customer to figure out on their own, they will not be able to and will risk the customer being frustrated and churn.

Step 4: Define the types of services that could fill the GAP to lead customers to operationalize the solution in production

To define the right types of services required to fill the gap between the product capabilities and the customer value outcomes, we need to understand the types of services that could help fill the gap.

Four types of services:

  1. Onboarding: Getting the customer setup with login credentials and integrated into any systems required for the software to function as designed and ready to be configured for production use.

  2. Education: Training the customer on all the features and functions the software offers in a logical approach to the most common use cases the software is designed to solve. It will provide the customer with a solid foundational knowledge of the software’s full potential and capabilities.

  3. Consulting: Expertise in both the industry or process and the product to provide recommendations and guidance on how best to configure the software to meet their company process needs to improve their operations and realize the ROIs.

  4. Support: Product expertise to provide information on how to configure and use the features and functions of the product and resolve any issues when the product does not operate as designed. To guide the customer to all available resources to help answer any questions they may have.

  5. Customer Success Management: Expertise in industry or process and product to provide a strategic customer roadmap plan for how the customer can operationalize the solution across the company to maximize the ROI. Manage customer through each phase of the roadmap plan to drive complete operationalization of the solution. (Land and Expand plan management).

For each process the customer expects to utilize the solution in production, the software team will need to evaluate which of the above service types would be required for the customer to configure, test and deploy the solution to manage the process more effectively and efficiently.

Let’s use the Retail industry example from above. The customer wants to design their IT solution to help automate the optimization of the floor design to be more logical and make it easier for their customers to find the products needed in a shorter period of time. They want to maximize the potential for upsells along the way. As the team evaluates whether the software could be completely configured out of the box by the customer, they will also need to consider the customer’s use cases. What services would need to be defined along with the software to ensure a customer could launch the solution into production in a short period and achieve the outcome defined for optimizing their retail floor design?

If this is for a mid-market or enterprise customer, does this make a difference in the services needed or just the level of service required. The team may define a GAP in the onboarding process where the customer needs a technical consulting service to integrate the solution to the other key systems before the software can begin to be configured. The GAP may also just be a different level of service required. For example, a mid-market customer could configure the software using the online self-help service because it is simple and straight forward, where as an enterprise customer may require a consulting service to help design and configure a more complex process.

When considering if education services may be required, the answer will always be: The Customer requires some form of education on the software. For product led strategic companies, the definition of education services becomes an in-product solution. The content, process definitions and configuration guidance are programmed into the product in each area, or there is the use of AI and/or a DAP solution. The critical element of education to consider is the idea that a good education program will show the customer upfront the full capabilities of the product. It will help drive their excitement about the potential impact the product can make on their jobs and company.

For solutions that require some level of business transformation and maturity, a consulting service may be defined. For larger more complex customers, they may need a consultant who is knowledgeable in the industry or process and an expert on the product to help them figure out which solution configuration will provide the most impactful results as well as how to continually evaluate and implement changes and/or a business continuity plan.

Support services will always be provided as the basic service required to support any software. However, depending on the gaps defined, the software company could build an amazing online self-help center with the help of AI to provide answers online versus a manned team. This is a great way to conserve costs, but make sure the online service meets the customer’s expectations and delivers resolutions and results that are effective not frustrating.

The last service type to consider is when it is time to create a CSM service. These should only be required if the gap is fairly large and a strategic plan is required to guide the customer through a more complex set of business requirements in order to go deep and wide across the organization and company. This service will be the one point of contact to build relationships with the executive sponsors, economic buyers and champions and discuss company strategic changes from year to year to guide the customer on how to utilize the solution to help deliver and execute on the business strategy from year to year.

In the start-up phase, it is best for software companies to define their support, education and consulting services first to drive results for customers and figure out what it takes to get customers fully operationalized with the solution. Once a GTM play has been proven, where you have a well-defined ICP and set of outcomes and a plan for how to operationalize the solution for that market, you have found a sweet spot. Once you have found a play that works, then you can determine if a CSM service is required to build a strategic customer plan and drive it to fruition for this specific target market. Not every target market and customer will require a CSM service. Revelation!

As always, we welcome your feedback and thoughts. If this article was helpful, please share our newsletter with your friends and colleagues. If you would like some help in defining the GAP for your company, please feel free to reach to [email protected].