The Three Types of SaaS Integrations

Continuing with last week’s post titled Integrations as Key for Next Generation SaaS Success, there’s a critical point that was missed in that not all product integrations are created equal — not even close. For SaaS 2.0 startups, catching up to the depth and variety of integrations of the incumbents is one of the major challenges. When thinking through integrations, it’s important to understand the three major types:

  • Native Integrations – Integrations that are developed in-house to send/receive data as well as call remote functions and expose additional internal functionality are native integrations. Native integrations are the most valuable as the quality is typically higher and the SaaS company is committed to maintain them.
  • UI Overlay Integrations – Integrations that are done via a Google Chrome Extension to override the user interface of a third-party app are UI overlay integrations. A common example is the industry of Chrome Extensions that add functionality to Gmail through the user interface and not the API.
  • Middleware Integrations – Integrations that are written and maintained by a third-party integration platform to connect two disparate apps are middleware integrations (e.g. MuleSoft or Zapier). Middleware integrations can be more expensive and/or slower depending on the APIs of the products being connected.

When thinking through the integration landscape, it’s important to understand that there are a variety of integration types and they aren’t equal.

What else? What are some more types of integrations with SaaS products?

Examples of SaaS 2.0 Companies

After talking about the The Next Generation Competitor to Every Public SaaS Company, it’s clear a better name for it is SaaS 2.0 companies. SaaS 2.0 companies are API-first, have rich, responsive UIs that are more conversational in tone, have approachable pricing models that are more flexible than the incumbents, and have a modularized platform so that customers can purchase only the features they need. With this definition in place, several people have asked for examples of SaaS 2.0 companies:

  • Intercom – Customer communications platform that’s one of the fastest SaaS companies to go from $0 to $50 million in revenue (see notes on Intercom’s growth)
  • Groove – Simple help desk software with a passionate following (read their blog)
  • Calendly – Schedule meetings without the back-and-forth emails (an amazing product!)
  • CallRail – Call tracking for data-driven marketers
  • MailChimp – Beautiful email marketing

Look for more SaaS 2.0 companies to emerge that reimagine the entire experience in a new, more personal approach.

What else? What are some more examples of SaaS 2.0 companies?

4 Types of SaaS Trial Experiences

Continuing the next generation SaaS discussion, I believe we’ll see more apps incorporate free trials and other mechanisms to experience the app before buying. As mentioned before, it continues with the consumerization of IT where people want their business apps to feel like their consumer apps, and trying something out is no different. Only, when it comes to trials and qualifying prospects, there are several ways to do it.

Here are four ways to qualify SaaS trial prospects:

  • Free Edition – As part of the freemium model, the free edition is free for life and includes a limited number of features or module uses. Free editions are great for products that have a B2B viral component like scheduling and email.
  • Demo Account – Some products are more complicated and need to have dummy data preloaded to get a good feel for the app such that it’s a demo account that is testable but not real. Demo accounts are great for products that need complex data to test like accounting and enterprise resource planning.
  • Proof of Concept Pilot – Another trial approach is to require that the customer provide a credit card and sign an agreement to get access to a full instance that isn’t charged for some number of days (e.g. use the product for free for the first 14 days), and then upon completion of the free period, the credit card is automatically billed unless the vendor is notified of not moving forward. Proof of concept pilots are great when there’s some level of manual setup and integration required to make the product usable for trial requiring effort on behalf of the vendor.
  • Free Trial – Many SaaS apps are easy to get going and provide a free trial that gives the user full access for some period of time before disabling the account if they don’t convert into a paid customer. Free trials are great for self-service apps that are easy to experience.

Not all free trials are the same and there are a number of ways to deliver an experience similar to a free trial. Consider the style and approach best suited to the customer experience and experiment with different approaches.

What else? What are some more variations on the SaaS trial experience?

In-App On-Boarding, Upgrading, and Downgrading in Next Gen SaaS

Continuing with ideas on next generation SaaS success like integrations and APIs, there’s another important component about the self-service nature: they’ll all have in-app on-boarding, upgrading, and downgrading. Much like the consumerization of IT has affected the B2B user interfaces and experiences, buyers of SaaS products want that experience to extend to all aspects of the product.

Right now, too many SaaS products don’t have a strong in-app on-boarding process and instead resort to support sites and quick start guides combined with helpful people. Instead, the buyer wants to be able to jump in and go through a structured process where they can have as much or as little automated hand-holding. Think of a series of steps with specific instructions, tasks, and videos to watch. The best form of service is self service that’s comprehensive.

After in-app on-boarding, the next area next generation SaaS products will all have is in-app upgrading and downgrading. Much like Slack is famous for only charging for active users (see their pricing), too many SaaS apps require reaching out to a customer success manager to upgrade, and don’t allow downgrading until the contract is up for renewal. Needs change and users should be able to upgrade and downgrade in the application immediately — it’s a much better user experience.

Look for in-app on-boarding along with easy upgrading and downgrading as part of the next generation of successful SaaS products.

What else? What are some more thoughts on in-app on-boarding, upgrading, and downgrading as part of SaaS apps?

Demonstrating Product Value in the Application

One of the on-going challenges, and opportunities, for a SaaS application is to show the user the value they’ve received using the product. At Pardot, we worked hard to show the product value through revenue generated, marketing pipeline, and campaign ROI. Of course, demonstrating product value took time depending on the volume of leads, marketing activities, and length of the customer’s sales cycle.

Here are a few thoughts on demonstrating product value in the application:

  • Revenue Generated – Connecting the product to revenue generated is the ultimate in showing value. If there’s ROI, prove it.
  • Time Saved – Most applications have a time saving element. Quantifying it can be hard but worthwhile.
  • Items/Objects Used – Reminding the users of the volume of product usage — invoices sent, contacts created, etc. — helps realize the value.
  • Email Updates – Sending product usage summary emails to the user keeps the value top-of-mind on a regular basis. Weekly emails are recommended.

Entrepreneurs would do well to ensure that the product demonstrates its value to the end-user.

What else? What are some other ways to demonstrate product value in the application?

Evaluating New Product Ideas

One of the on-going challenges in a startup is evaluating new product ideas. As the product achieves product/market fit and the customer base grows rapidly, more new product ideas come in from customers, prospects, partners, and all internal teams (sales, support, success, strategy, etc.). Here are a few ideas for evaluating new product ideas:

  • Overall Strategy – How does the new product idea fit in with the overall strategy? Is it consistent with the current direction or offer a different direction?
  • Existing Customer Base – Does the new product idea help 80% of the existing customers? If not 80%, then what percentage will find value from it?
  • Desired Customers – Does the new product idea help 80% of the desired customers going forward? How does the existing customer base differ from the desired customer profile (startups often go up-market over time)?
  • Request Quantity – How often has this idea come up? How many “votes” does it have from customers?
  • Backlog Priority – Where might this new idea fit in with the backlog? How would it be prioritized?

New product ideas never stop. Entrepreneurs would do well to create a process to store, evaluate, and process new product ideas.

What else? What are some more thoughts on evaluating new product ideas?

Daily Active Users in B2B SaaS

Continuing with assessing product/market fit, one of my favorite metrics is daily active users (DAUs). Now, DAUs are more commonly associated with B2C products like Twitter and Facebook, but they’re directly applicable to B2B SaaS products as well.

Why are they so important for B2B SaaS? The best indicator of success for most SaaS products is the fact that the customer continually uses the application. In most applications, this is signing in and using the platform. In a limited number of applications, this is using the API programmatically on a regular basis (e.g. integrating it into another application or workflow). Regardless, product usage equals product value. And, product value is a key element of product market fit.

Entrepreneurs should monitor their daily active users and understand the correlation between product usage and startup success.

What else? What are some more thoughts on daily active users in B2B SaaS?