August 01, 2019

Who do you want to be when you grow up?

by Stijn Hendrikse

Are you a daisy or an orchid? Both are great. But you can’t be both.

When assessing the competitive playing field of any Software Product Category, we can use the following model:

 

saas-company-strategy-1

 

It’s important to realize that each of these quadrants provide healthy opportunity to create a valuable, profitable business. It’s hard to optimize for multiple quadrants though.

Here are some of the trade-offs that are easier to master when you know what you really want to be(come):

Technology

  • A value player will invest in technology to bring down the on-boarding-, service- and operating cost of the SaaS Service (the so called “Cost-to-Service”, CTS)

  • A Premium player will invest in R&D and Visionary Product Leadership.

Go-To-Market

  • Premium an niche players will likely go direct.

  • Value and Volume players will allow a channel to control (part of) the relation with the market, and just add their unique piece of technology to the value chain.

  • Niche players will hire experts in their vertical or segment to give them unique credibility and specialization in a small (but profitable) market.

Customer Success and Support

  • A value or volume player will optimize for low-cost, self-service support, and easy on-boarding.

  • Premium players will invest in Customer Success teams, consulting departments and paid premier support services to maximize individual customer delight.

Strategy

  • Niche and Premium players will likely build (and protect) their own Intelectual Property.

  • Value and Volume players are more comfortable with licencing, buying or partnering.

People

  • Value and Volume players can get by with great utility players who can get the job dove for a relatively low cost.

  • Premium and Niche players probably have to pay a premium to get the best people for their sales, services and engineering teams.

Marketing

  • Finally, marketing will be very different for each of these 4 quadrants. The difference from a branding, positioning, messaging, pricing and campaign perspective is vast.

So make up your mind, and then optimize for the quadrant you pick.

Stijn Hendrikse

After 15 years of experience in the Software Marketing Industry, Stijn adopted the SaaS model to launch Kalungi, a SaaS Chief Marketing Officer blog where he shares best practices. This supports his work as a CMO Consultant with Chief Outsiders.

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