Top 10 revenue killers in B2B SAAS
As a B2B PM, you can grease the wheels to prevent revenue loss
Hi PMs
Let’s talk about revenue killers today.
Revenue is the lifeblood of any business, and as PMs you are ultimately responsible for delivering delightful products that brings in revenue. You are probably thinking that if you do the right discovery, you will build a great product and sales will follow.
Unfortunately, in B2B building a good product is just the beginning of the story. There are many more hurdles to go until the sale is made. Most of the time sales and marketing teams will take care of making sure the deals get closed. And customer success teams will ensure the renewals go through.
But as PM you can help grease the wheels a bit for them.
How?
Let’s look at the top 10 revenue killers companies face and how you as a PM can help mitigate these.
1. Unclear Value Proposition: A hazy value proposition wastes precious sales cycles. When potential customers cannot easily grasp the unique benefits of your product, they are more likely to move on or explore other options.
A product manager can help by working closely with the marketing team to craft a compelling and clear value proposition that highlights the unique benefits of the product which resonates with the target audience. As a PM, you were involved in the initial discovery and validation of the product. Which means you have the best view to provide what value proposition will resonate the most.
Success is when sales and marketing messages resonate so well that prospective buyers are ready to start closing a sale early in the sales cycle, and sales is not spending frequents cycles with prospect to explain the product and why they should consider.
2. Ill-defined ICP: An improperly defined Ideal Customer Profile (ICP) can lead to churn. When your product does not align with the specific needs and characteristics of your target customers, you risk losing those customers at the time of renewal.
A typical symptom of this lack of clarity is that sales will close deals with any type of customer, without too much regard if the product actually is a fit for them.
Imagine you have created a pain killer. Your sales will now target anyone with any kind of pain. Obviously not all pains are the same. A headache is different from a knee joint pain. But you define an ICP, e.g. a pain killer specifically for back ache then you only target those types of customers. And because your medicine works for back ache, most of the customers will find value and buy it again if needed.
If you see customers churning, check if they were really your ideal customer in the first place. There are many reasons for churn, but a primary one is to ensure your customers are a fit. As a PM, ensure you define your ICP clearly and work with sales and marketing to target those.
3. Positioning Pitfalls: This is similar to #1 above. A well positioned message allows a customer to understand the value prop and self select. When positioning is done right, the prospects will gravitate towards your solutions.
If you're not positioned right in the market, you risk potential clients who will choose no decision. Misaligned positioning can result in a missed opportunity to showcase your product's value and uniqueness.
The best example is Netflix. When they started in late 90s, their positioning was “no late fees”. That resonates with a lot of people who were sick of paying hefty late fees to Blockbuster. (myself included). Now the value proposition is lot of selections, convenience, personalization etc. But it was the positioning that attracted the buyers.
How you create positioning is a topic by itself. In a nutshell, what is that one differentiated value that will attract your prospect and convince them that this is the solution they have been looking for. If they do not find that, they will end up with no decision, thus losing the sale.
4. Messaging Misalignment: Misaligned messaging with internal stakeholder that fails to showcase your product in the best light can lead to confusion. Clarity and consistency in your messaging are essential for building trust.
Your internal stakeholders like marketing, channel management and others have their set of priorities. It is essential that the messaging they are relaying to prospects and partners is in line with the reality of the product capabilities.
If your web site or marketing copy does not highlight the real capabilities of the product, that could result in missed sales opportunities. As a PM, you have to ensure that stakeholders are aligned to the real value and positioning and not miss sales opportunities.
5. Friction-Filled Onboarding: High friction during onboarding often leads to churn. Complex or time-consuming onboarding processes can deter new users from fully adopting your product, increasing the likelihood of abandonment.
Once I lost a customer as they were not able to connect my app to their Outlook for sending emails. As a PM, map the entire boarding process and remove any friction. Replace manual steps with automation where possible. Reduce the number of steps. Get them to the AHA moment as soon as possible.
This will help reduce churn due to reasons of poor onboarding.
6. Reactive Retention Management: When customers don’t use the product as much as they would like, they risk being lost to churn. Which means you have to constantly monitor product usage data and proactive identify customers who may churn due to lack of usage.
Many times customer success will get to know about lack of usage towards renewal, which is already too late.
If you analyze past data of churned customers, you might see patterns. Then use that pattern to proactively identify which customer segments exhibit that pattern. Customer success can then do early intervention to prevent the churn.
As a PM, you can help proactively manage churn.
7. Lack of Upgrade Paths: Usage data can also be your treasure map to upsell and cross-sell opportunities. When you don't offer clear paths for customers to scale their usage or explore additional features, you miss out on potential revenue growth.
As a PM, identify high usage customers who offer the opportunity to expand usage across persona or use cases. Work with sales and marketing to promote additional products or add ons.
8. Competition Oversight: Failing to keep an eye on the competition can result in losing customers. In a competitive market, neglecting to stay informed about competitors' offerings and innovations can lead customers opting to switch.
As a PM, not only you have to watch new product capabilities from competition, but also how they are positioning. You may have a better product, but if a competitor comes with a better positioning message, then the customer will likely try to engage or get a demo. Your job is to ensure that the customers do not entertain the messages from the competition.
9. Distrust-Building Mistakes: Mistakes like missed deadlines, data breaches, or inaccurate reports erode trust. Trust is fragile, and any missteps, whether they involve meeting customer commitments, protecting sensitive data, or ensuring data accuracy, can damage your customer relationships.
As a PM, do not ignore the small things that create distrust from the customer.
10. Customer Neglect: Not giving due attention to customer needs, such as performance, roadmap clarity, or responsiveness, can lead to churn. Customer satisfaction and loyalty require ongoing effort, and neglecting their concerns or needs can result in attrition.
Remember, a vigilant B2B Product Manager can identify and mitigate these revenue killers effectively. By addressing these issues proactively, you can not only protect your existing revenue but also uncover new opportunities for growth.
Stay vigilant, stay proactive, and stay successful in your role as a B2B Product Manager. If you have any questions or need further insights into any of these revenue killers, please don't hesitate to reach out.
I am available for coaching and advisory for B2B product teams and product managers. I can help with transforming your team to be revenue centric and how to align product strategy to business strategy.
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