While many SaaS services like to explain the value of their SaaS in terms of features (it does X) or cost saving (it is cheaper than on-premise), reality is that these “value propositions” position you as a commodity and are not sustainable. The probability is high that an upstart SaaS firm will soon beat you at your own game (price and features). As an alternative, I’ve made the argument, that a well designed, user validated, SaaS user experience can be an effective and sustainable differentiator between feature-competitive software products.
The value afforded by monitoring
There are several other SaaS value propositions worth exploring. SaaS user interface elements can be designed to monitor user behavior, enabling continual refinement of your service. Monitoring not only provides insight into how the SaaS should be improved to meet changing customer requirements, but also how to proactively reduce customer churn. The value proposition this enables you to offer is: easy to get started and easy to become proficient (and easy to get hooked).
The value afforded by connectedness
“Connectedness” offers another potential SaaS value proposition. In contrast to on-premise applications, SaaS is inherently “connected in the cloud”. Because of this, it can be designed to be more than a data-driven application providing access to end users. It can be designed to incorporate your entire extended enterprise into the business process - offering integration and collaboration services to your customers, partners, and suppliers. With “local” SaaS, the way the end-user interacts with the application should tightly map to the workflow and business objectives of the organization. This same principal applies when you expand your workflow analysis to include broader business objectives across more of your value chain. The value propositions of a SaaS designed to be usable across organizational boundaries are business agility, bottom-line revenue (reduced errors and cost, higher automation), and top-line revenue (improved relationships with partners and customers).
A human resources example
For example if your business is talent management, you can extend the design of your talent management SaaS to bring together internal HR, external recruiters, relocation providers, trainers, etc. This kind of connectedness is a unique and inherent value of SaaS. Beyond the technology, the key to this approach is to define the larger value your solution delivers across the value chain for visibility, control, and real-time collaboration (both upstream and downstream). Then concentrate the design around the high value scenario for those extended relationships, addressing the entire SaaS life cycle.
Categories: SaaS