What are some of the challenges that you will probably try to give a customer from a competitive SaaS solution?
1/ The incumbent
Each B2B -Saas startup knows the importance of storage and has systems to try to avoid emigration. For example, most SAAS companies work out important performance indicators (KPIS) in which they measure things like the application and user behavior (as a proxy for added value). So if the user registers less regularly (decline in daily active users) and the application uses less (reduction reduction), the incumbent provider should proactively try to keep customers. You can also send surveys (net promoter score) as a means of measuring that you provide continuous value from a product perspective.
In short, the reigning SaaS provider will probably work exceptionally hard to maintain the customer business, since the binding is a key element of a SaaS startup business model. You need to know the weaknesses of the main competitor’s solutions to ensure that you concentrate on switching the switching where there are obvious weaknesses.
2/ The commercial terms
Many SaaS companies want to migrate to annual advance contracts in order to manage the emigration and cash flow. Depending on the contract, the window may be quite tight for switching. For example, if the ticket price is five figures, the world of orders and multi -year contracts (not about account management) are located and it can therefore be difficult to use your approach to motivate a change. So if you try to change customers when you have just renewed, the likelihood of evaluating an alternative is pretty slim. In applications with smaller monthly subscriptions, the commercial effects become negligible and are therefore not a barrier for switching, so that the timing is not relevant.
3/ the user
The greater the number of users of an application, the greater the switching costs are usually, unless there is considerable internal dissatisfaction with the application. This problem is a special challenge for the solutions that numerous category players want to suppress with a bundled solution. You may want to replace several different applications with a solution, other users of these different applications may not be so sharp. Inertia and resistance to change can often be greater obstacles than the characteristic rate. By evaluating the likely number of users of the application application, you can understand how anchored the application is likely. You may need to use proxies based on your own experience with your SaaS solution with companies with a similar size or make-up. Your promise of value for an all-in-one solution can appeal to both commercial reasons and for obvious efficiency gains, but lucky users will probably resist, unless the promise of value is considerably more convincing and will tackle the other problems mentioned here.
4/ the learning curve
Depending on the complexity of the application, most users are habit creatures, and the view of learning a new UI/ UX can be discouraging, which often leads to considerable resistance. By carrying out an open analysis of the user -friendliness of its application and that of the competitor, you inform about how anchored the application is and how steep the learning curve will be. It will also be important to understand who is probably users among the most important stakeholders or decision -makers. A Chief Financial Officer (CFO) may be very interested in a change that is based on increased efficiency or cost savings, while another decision-makers from C-Suite may be less to them if their motivations are closer to the effects of the company.
“Learning costs are the known hurdles that a customer has to overcome in order to master the new product that has to be mixed with the control of the reigning product, which needs to be met to fulfill the tasks that the customer needs. Favor of the new product.” Brian Laung Aoaeh rethink what I know about switching costs and startups,
5/ the functional rate
In many cases, the applications rarely agree between the competition solutions in relation to the functions. This is also a concern for those who give a real value from the current application. Will a bundled offer have the same width of functions as the existing independent application? Will the software be customizable to replicate my work?
“If you switch to a new provider, the team may have some advantages, but I can lose some functions that the team appreciates. For this reason, there is a mantra that a product must be 10x better. For many possible internal champions, the rewards with these risks and costs must be justified by much larger profits.” Tom Tunguz, Redpoint
A useful approach to evaluating the advantages of competitive products or otherwise is to search websites such as GET APP, Capterra, G2crowd and Software Council to see what reviewers say about the user -friendliness and the feature set of the main players in this category. If review numbers are low and mostly positive, they cannot be taken into account (since they are probably wrong), but if there are many reviews, they can be used as a proxy for an NPS. The more complaints about your competitor application, the greater the likelihood that there are some internal disagreements about the user -friendliness of these Switcher accounts that you aim for, etc.
After all, it almost goes without saying that if the market has an inferior offer, if you have an inferior offer, your task of seducing a switch will be all the more difficult. Instead, you may have to change the clock and lead with a significant price difference or a certain geographical market or create a more basic offer for a specific niche. One possibility is to target segments in which it is obvious that the competitor moves more on the market. This often happens after a great increase in VC when pressure is exerted on startups in order to switch to more economically attractive segments.
6/ The purchase decision
Depending on the ticket price, you either have a discrete purchase of a person with a credit card for companies, up to a complex purchase with numerous stakeholders and decision -makers who are involved in the process.
It is not easy to determine who made the initial purchase decision and how long it was made, but it is something you have to consider. It is easy to change a legacy system that was previously bought by a lengthy manager. Did you misunderstand the decision the first time? Will your judgment be questioned if you propose an alternative solution so soon after the first decision? If you make sure that you step cautiously here, the key is.
7/ the application
Is your solution a mission -critical application or something that is a “nice to have”? It is unlikely that contemporary managers prioritize a software change, unless there are compelling reasons for switching. To be realistic about where your application is in the buyer’s head is the key here. If you are mission critical, you will rather get some attention, but on the other hand there is a greater risk. If the product function difference is not important or because the existing solution is likely to be incorrect (either through problems with the characteristics or possibly because it is a legacy system that overturns for a long time.
“The switchover costs develop and become stronger when an incumbent product becomes” mission critical “in order to primarily acquire the product for the purpose for which the customer has primarily acquired the product. An incumbent who combines network effects with high switching costs in the same product line is well positioned to build a durable water ditch to build up his business. “
Brian Laung Aoaeh rethink what I know about switching costs and startups,
8/ Legacy data
Is there a lot of data in the application? Is it easy to issue data from the current application, or make life difficult for those who want to migrate to a new solution? These are also some of the questions that come to mind for the buyer because he thinks a change and must be treated in their marketing.
9/ The risk
What is the risk profile of the proposed train? If the incumbent application is a large brand name and an essential part of the corporate infrastructure is that the ability to convince the decision -makers of the merits of a switch are probably minimal.
“When companies outsource“ mission -critical ”activities, changing providers can involve a considerable risk. For example, some companies reduce their need for IT employees and infrastructures by relying on cloud computer services. If you switch from a cloud service to another, a company will be exposed to a considerable risk if customer documents are lost or corrupt during transfer. ” Tom Eisenmann, Harvard Business School
10/ The implementation
After all, it is also worth taking into account the software implementation. Is it an uncomplicated process or one in which several agents are involved with different agendas?
Can it be found via code that take at most one day or does it include weeks of providing? What dependencies are there? If you make it clear about the steps required by the customer, it is also ensured that you address so many potential challenges in advance.