Twice last week I went out to dinner. At one place the food was exceptional and at the other it was merely good. Can you guess to which restaurant I plan to go back?
Before I answer, you might be wondering why I want to share my personal dining agenda in a blog about Software-as-a-Service. The answer is that my impressions about the restaurants offer a simple way to explain what makes for a successful SaaS.
The restaurant with the exceptional food was a high-end California cuisine hotspot. The food was complex and expertly prepared. But when you go to a restaurant, there is a lot more involved than just the “product” of the food. There is really this little, micro customer life cycle that you experience. There is the advance reservation process, the parking, the alacrity and courteousness of seating, the speed at getting menus, the helpfulness and attitude of the waiters, the lighting levels (i.e. can my aging eyes read the menu without having to ask the waiter for help), the prices, the length of time waiting for the bill after I am ready to go, and of course, the general ambience and the consistency of that throughout the dining experience. So the restaurant’s “product” is much more than just the food.
In the case of the hotspot, the food was awesome, but some of the other pieces of the experience were suboptimal (high prices, waiters that were more interested in the party of six, then my party of two, slow to deliver the bill, and a bathroom that was jarring because it seemed like it was from a completely different restaurant). On the other hand, the little Italian place had good food, was speedy without feeling rushed, had a casual trattoria ambience throughout, and was reasonably priced. Where do I plan to go again soon? The little Italian place of course.
Spaghetti alle Cozze - Mussels and spaghetti lightly spiced with garlic, olive oil and chili
I’m a customer like any other and my reaction is not unusual. The little Italian restaurant knew that their company’s “product” was the food, the pre-, during- and post - service, and the ambience of everything from the foyer to the bathroom - in other words, they developed their product to address the full customer life cycle around dining. They sold a complete user experience that keeps customers coming back for more. The high-end restaurant, on the other hand, thought that providing outstanding food was the totality of their product.
The difference between the two restaurants is not tactical, but strategic. Relying on the superiority of the core product is a short-term strategy. Sooner or later, another company will match the core product or improve upon it. Either the customer will abandon the original company, or the original company will need to pay a price in an attempt to save the relationship. I am talking about restaurants here, but the issues are the same for SaaS.
With SaaS, your goal is to get as many customers as possible to try your software, and then return month after month. Many companies think they can focus on developing a great core application and then let traditional sales, support and engineering staff handle everything else. But reality is that you need to develop your SaaS to deliver the complete customer life cycle experience from evaluation, to use, to billing - with each phase of that life cycle taking just as much developmental attention and user-validation testing, as any other.
So as you plan your SaaS strategy, think about the little Italian trattoria that successfully captures your regular business by managing the complete “product” life cycle.