Why do customers choose to buy one SaaS product over another? Their purchasing process is complicated—according to Gartner, customers spend the majority of their purchasing time researching products independently, both on and offline.
The reasons why someone chooses your product over a competitor’s matter to your product’s success. If you understand why customers buy, you stand the best chance of maintaining any wins you’ve earned and repeating that positive trajectory for the future.
It’s possible to figure out your customers’ reasons for making their purchasing decisions, but it’ll take some research. By asking your customers about their purchasing experience and examining your analytics, you’ll learn which factors went into their decisions. Once you understand those factors—whether they’re product features or steps in your sales and marketing processes—you can replicate them to achieve your growth goals.
The most effective way to find out why a customer bought your product is to ask them directly and collect their feedback. Ask your customers specific questions aimed at getting their opinions in targeted areas.
The way you ask them—meaning, the format you choose—depends on what kind of information you’re looking for:
There are two key areas of the buying experience that go a long way toward closing deals: your product itself and how prospects interact with your company’s marketing and sales campaigns.
Ask your customers specific questions to find out why they purchased your product. Your goal is to understand what convinced them to buy your product instead of another.
People make purchase decisions based on a variety of factors—they may decide to buy because your product solves their problem or because it includes features that they want. Other common reasons for buying include:
Ask customers what made them decide to buy your product, and try to find out which features they use most often. The answers to those questions will show what your customers value about your product.
Your customers can also provide insight into how smooth your marketing and sales processes feel. Since sales and marketing impact customers’ SaaS purchasing decisions, you need to know how well those processes function in bringing in leads or closing a sale.
B2B SaaS customers don’t typically follow a linear sales journey. They may find out about your product through any number of different channels: a retargeted social media ad, for instance, or cold outreach via a phone call. No matter where they enter your sales funnel, however, they need to find their way to the information they need to make a purchase decision. If they experience friction anywhere in that process, it could lose the sale.
Overall, decision-makers feel frustrated with how complicated the SaaS buying process has become. Customers want the ability to conduct their own research before buying, but they need the right amount of information to do that successfully. Too little product information upfront and SaaS buyers may not feel confident that your product solves their problems; too much information, and you’re likely to lose their attention.
Product, marketing, and sales teams need to be on the same page so they can deliver the details prospective customers need to decide to buy. Cross-departmental alignment will also help marketing with lead generation and keep the sales pipeline full. It’s much easier to reach the right inbound targets and qualify leads if everyone understands what your product delivers and who it’s best suited for. These factors affect customer acquisition costs (CAC) as well; if sales and marketing can hone their approach, your company can budget strategically and fund the campaigns that are most likely to work.
Self-service models are well-suited to the SaaS sales process. B2B customers don’t spend much time talking with a salesperson before making their purchasing decision. In today’s SaaS industry, it may not make sense for reps to invest time in high-touch outbound sales techniques if your customers are looking for an independent buying experience.
Ask customers how they heard about your product, so you can see which marketing campaigns draw in the most qualified leads. Also, check in to see if they spoke with a sales representative before they bought. Those answers will help you understand how well different marketing and sales techniques close deals.
You may also want to collect demographic information from your customers—that data will help you understand who is in your target market, which helps with lead qualifying.
Analytics give you detailed insights into your users’ behavior. Product and marketing data show how each individual customer interacts with your product and funnel. When looked at in total, your analytics offer you a way to understand the broader trends of your users’ behavior. That information can translate directly into the selling points of your product.
Your product analytics will point you toward which features get the most attention and use from your customers. That information tells you which features offer the most value.
Once you understand what makes your product valuable, you’ll know how to maintain and update it over time. Product changes that customers find valuable will offer you a better chance of increasing your sales. You’ll also learn which features your team should emphasize in their marketing messaging and sales pitches.
For informative product metrics, look at:
A product analytics tool like FullStory will make this process simpler.
Marketing analytics show you how users move through the funnel. With that information, you can work with marketing to optimize how you find and attract potential customers. SaaS companies, especially those in a startup stage, may have to try several approaches to marketing before they find one that fits.
While managing the funnel lies is the marketing team’s responsibility, you can contribute insights as a product manager. You know your product’s value, features, and function best (especially if you’ve validated your assumptions during development), and with that knowledge, you may be able to spot problems that cause you to lose potential customers.
When looking at the marketing funnel, pay attention to the customer journey, or the path that prospects took before deciding to buy. If there’s a step in the buying journey that’s losing people’s interest, check to see if there’s a disconnect between how your product is described and how it really functions. You may be able to tweak the product messaging to better showcase benefits. Or, you could help marketing change their targeting approach to make sure your target audience is finding its way to your product.
Your customer retention and churn rates can also offer valuable information. If churn is high and retention is low, there could be a misalignment between new customers’ product expectations and what you’re delivering. That could mean changing messaging to accurately reflect your product or making product updates to better fit what customers need. It may also point to a problem with your onboarding process, especially if that churn happens early on after a purchase.
Marketing analytics can help your sales team as well. Sales reps may be able to upsell freemium members to a paid subscription if they can showcase the product characteristics that are best at retaining customers. Your account executives may be able to boost enterprise sales if they have detailed intel on how to get larger accounts on your customer journey.
Prospects who didn’t convert may offer direct insights as to why people aren’t purchasing your product. If you’re able to follow up with them, you can survey them to find out precisely why they decided not to buy.
To find lost leads:
Churned customers offer another opportunity for product feedback. Work with your customer success department to ask customers why they’re leaving as part of an optional exit survey. Their answers could point you toward product changes that would help convince more qualified leads to become new customers.
Keep on top of customer feedback and you’ll have a better understanding of your customer needs, their buying experience, and reasons for sticking with your product. To leverage and manage customer feedback, look for a customer feedback tool that combines automation, cross-departmental communication, and a streamlined organizational system, so your team can stay up to date on customer needs in real time.
UserVoice Discovery helps you collect, organize, share, and act on customer feedback. You get a clear understanding of the needs of your existing customers and get a simple way to collect customer experience metrics so you can benchmark changes over time.
For a simple way to stay in touch with your customers, sign up for a free trial of UserVoice Discovery.