Rich Mironov: Service-Model Thinking for Product-Model Folks

This evening I attended “Are You a Chef or Are You a Grocer?” an SVPMA event featuring Rich Mironov. It was an excellent presentation on SaaS (Software as a Service) business models.

Mironov outlined four components as key to a successful SaaS offering:

  1. Build a multi-tenant infrastructure
  2. Manage for slower incremental sales
  3. Commit to continuous marketing
  4. Get real user feedback

Building a SaaS application is more than just hosting. You are responsible for the user’s positive experience. As a provider, you are responsible for choosing the right features, combining them correctly, managing the hours and uptime, and serving the users. SaaS offerings need to be a complete solution that can handle many customers simultaneously. In addition, the customer must feel like they are interacting directly with the service providers.

Build a multi-tenant infrastructure
This type of infrastructure requires your customer to have a personalized experience with a menu of options. There are no excuses when it comes to availability. Customers want service on-demand. The system needs to be private and secure with usage reporting and billing traceability.

A good example of a multi-tenant infrastructure is Google’s Adwords. Adwords is extremely simple to you. In less than 15 minutes, you can see your advertisement on the Google search engine. You can create customized ad campaigns, monitor budgets, and analyze data. All of this is available through a web browser that I can access anytime, anywhere.

Manage for slower, incremental sales
To be a successful SaaS company, it has to be quick and easy for the customer to see the initial benefit. You need to reduce your customers perception of risk by enabling them with a jump start. An example of a jump start would be taking the customers data in and giving them a result that tells them something that they do not already know as an output. If the customer likes the result, they can pay for it. Otherwise they can leave it and walk away.

From your customers perspective, the questions that you must answer include:

  • What is the risk involved?
  • How much time do I have to spend to use the product?
  • How much is this going to cost?
  • What do I get for my money?

Commit to continuous marketing
Traditionally, companies ship CD’s and move on. Now, because software is so cheap to develop competition is becoming fierce. More and more players are fighting over the same market. How are you going to differentiate yourself? With SaaS you can wrap a suite of services around your technology offering. The responsibility of marketing also includes keeping frequent and helpful contact with your customers. Friendly, low intensity touches can be made with eNewsletters, blogs, FAQ’s, questionnaires, testimonials, and success stories.

Get real user feedback
It is important to know how your customers are using and not using your application. Customer feedback can be obtained through customer meetings, third party surveys, sales issues, annual user groups, online forums, industry analysts, and product reviews. By understanding your customers objectives, you can design your product roadmap to be aligned with your customers needs. This way you can get woven into their practice and never be displaced. Furthermore, you can avoid developing features that will never be used.

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