B2B SaaS product-market fit

[kc8vji]

Hello everybody,

We have a B2B SaaS product for e-commerce and got a couple of customers for the first year. But since then we couldn’t increase our sales. We tried different approaches, but they didn’t help much. Such as:

• Google Ads
• SEO optimization
• Catalogs
• Increased sales department (max five people)
• Marketing (articles, posts on LinkedIn, Facebook, Instagram, and Youtube)
• Bunch of tools
• Dozens of marketing/sales consultants

At the same time, an analysis of our competitors shows that the market for this product exists. There is no clear understanding of whether the demand is big enough and whether our product fits the market.

I would like to ask if there is a creator/owner of B2B SaaS product who had similar difficulties and could respond to a couple of questions or give advice.

Thanks

 

[trulytheone]

@kc8vji I think the issue is that there's something wrong somewhere within your funnel. If the demand really exists then that definitely means it's true.

I have no idea about how long your business has been in nor any other data points other than what you have shared but from what i can see, it clearly looks like you have been going after a lot of channels rather than focusing on a few initial set of channels that contain your target market the most.

You should currently be focusing on paid media and demand generation activities to gather real information about the potential target market. Look at the data points and conduct A/B testing on your messaging, positioning and see what works and what doesn't and double down on what works.

I would give you the classic advice of "Do things that don't scale". Don't be so focused on scaling at the moment. It definitely looks like you are still at a very early stage.

So take my advice, focus on 2-3 channels initially. Use a AARRR Framework to organise and diagnose any issues in the customer journey. Gather data and information about potential customers. Double down on a segment that seems to be responding the most. Keep testing and once you feel like you have been getting enough demand, move on to sizing the market and then infuse more cash to start scaling.

Easier said then done. But your business needs focus.

 

[kc8vji]

@trulytheone It's definitely something wrong with the sales funnel because we have an average monthly price on the market, and all our existing customers have stayed with us since they tried the product.

We have run the product for 1.5 years already, and during this period, we have tried a couple of PPC agencies who run adv campaigns on FB, Instagram, and Google Ads with no results. Simultaneously we've been creating unique content (>100 articles) on our website and improved SEO.

Also, we've built the ideal customer profile and changed it several times to validate some hypotheses.

I agree that asking customers who don't want to buy is a perfect option. But we don't have so many such customers because we don't have many demos. And even when we ask why some potential customers didn't buy the product after the demo, they don't answer honestly or don't respond at all.

We are currently focused on email marketing and content creation but still have no results.

 

[trulytheone]

@kc8vji Well, honestly can't really help you without knowing inside out about the issue. There are a lot of questions that need to be answered but i think you need to look for some expert help like a consultant or other founders.

That's all I can say so far. The only option that i would recommend focusing on is to ask why customers aren't buying. That's the only thing that can actually find the root cause. You need to ask more customers and find some regularities between them. You can't really discount saying they aren't being honest, you will have to find ways where you can find that out from them, depending on what questions you ask because sometimes even your customers can't answer why frankly.

Also there are some sites that allow you to see the recording of how they're browsing the site and where they are leaving. I don't know if you tried it but it does give a good amount of information.

 

[kong0311]

@kc8vji I’ve seen it!!

I’ve consulted for a SaaS that had a dozen or so and very high-end customers but couldn’t get past that point.

Why?
1. Difficult to explain quickly
2. Narrow scope
3. MVP was >$800/mo - needed a better value ladder and
4. self serve/API low end pricing - as opposed to 3 sales/yr at $4k/mo.
5. Were not willing to make above changes.

What did consultants say?
What have you tried?
DM me your site.

 

[kc8vji]

@kong0311 In two words, it's a solution for searching through products for online stores. Our standard plan is $500/month. Integration is relatively simple and can be done on any eCommerce platform:

1. The customer gives us an XML or JSON feed with products
2. Put javascript on the website manually or via Google Tag Manager

We continuously collect feedback from existing customers and add new features. By the way, all customers who tried our product became our permanent clients. So, I assume they are happy with the quality.

We just don't have enough demos to get new customers.

 

[krista123]

@kc8vji I worked on a similar product. This is just a guess, but it's one strongly reinforced by experience: Integration is, actually, nothing like easy.

You think that a store is basically a spreadsheet of . That's true. The majority of online stores are unable to reliably produce that spreadsheet.

I ended up spending an enormous amount of time on figuring out what was in stock at customers so that we could only show in-stock items in search results. Including json feeds, our own scrapers to read their storefronts, direct database integrations with magento and other stores, etc. I staffed a full team to permanently work on this problem.

Unless you're limiting yourself to shopify or similar, where you can actually reliably get this feed, I suspect this is a real challenge for many prospects.

The other painful learning from my time at that company was that many stores don't have eng; they're using entirely outsourced teams who are, frankly, shit at their jobs.

I also worked with products implemented via gtm. Lots of teams do not understand gtm, and/or are afraid of touching it.

Not sure if any of this applies, but it jumped out at me when you posted that, particularly the use of the word, "simple."

Separately: $6k/year is a weird price point (too low for sales, too high for cheap customers / crappy businesses).

Another point: there is tons of competition in this space. Store owners are being hammered by sales people all the time. You appear to have conceived of a product strategy as separate from a gtm strategy, which is (again, imo) a huge mistake. The two are the same thing.

Your action plan is, imo, clear. Your sales isn't performing. Do sales yourself. You'll figure out the pain points fast. Do prospects not enter the funnel? You need a different sales channel. Do prospects drop out when you discuss integration? The above pain points are the problem. etc.

One more thing that jumps out at me about your statement (as an entrepreneur) is I can't tell if you're saying that you believe implementation is easy or your customers found implementation to be easy.

edit: why not share the link on your profile? Then anyone can go look?

 

[kc8vji]

@krista123 Thank you for sharing your experience.

Almost all our customers already had XML feed before we started integration (either feed for Google or some SEO purposes, etc.). And we just used the existing feed. So, it never was an issue in our case—the same with javascript. Since we do all the UI customization on our side, they just need to place javascript.

Another point: there is tons of competition in this space. Store owners are being hammered by sales people all the time.

That's true, and the main challenge is to get store owners' attention. We even tried to do a free search audit on customers' eCommerce websites and send them a short PDF report with all their issues and our suggestions for fixing them.

You appear to have conceived of a product strategy as separate from a gtm strategy, which is (again, imo) a huge mistake.

Do you mean "Go-To-Market strategy" in this context? If "yes", we created this product because of some demand. A couple of companies contacted us and requested such functionality. Once the product was ready, we decided to sell it as a SaaS since the feedbacks were good.

Separately: $6k/year is a weird price point (too low for sales, too high for cheap people).

That's an interesting point. We aligned our pricing with competitors because when we tried more expensive pricing model, people often compared our prices with competitors' prices and told us about that explicitly.

Your action plan is, imo, clear. Your sales isn't performing. Do sales yourself. You'll figure out the pain points fast. Do prospects not enter the funnel? You need a different sales channel. Do prospects drop out when you discuss integration? The above pain points are the problem. etc.

Initially, I thought our sales team wasn't performing well, so we hired other sales, but they didn't have enough qualified leads to show enough demos. Then, we changed our lead generation approach and adjusted the ideal customer profile, but we still didn't have enough demos, nevertheless, the "reply rate" is acceptable.

That's why I try to dive into details and figure out what's wrong with the product-market fit, sales funnel, or pricing model.

 

[krista123]

@kc8vji

Do you mean "Go-To-Market strategy" in this context? If "yes", we created this product because of some demand.

Yeah, I meant go to market. Basically, how you market and sell, at what price, and to whom. The thing is, for saas businesses, gtm changes what you build. It's awesome to get customers fast, but (in my experience), after that, you change what you build based on the price you want to sell it for and to whom.

eg in your case, I suspect $6k/year makes it hard to afford SDRs, ie outbound. The audit report is smart, but I'd suggest seller conventions may help as well. Or perhaps offering to be free and take a percentage of lift. Those things are easier at higher price points.

In general, most software costs

 

[moodynoire]

@krista123 This.

 

[dewguru]

@kc8vji We can't tell you why they're not buying your product, only they can. So talk to them - the ones that you caught, and the ones that got away.

Are they your demographic, but not buying your product - then maybe something's wrong with your product. Maybe it's not differentiated enough. Maybe it's missing a critical feature. Maybe someone else has that niche in the bag, and you need to target a different niche.

Maybe your demographic is out there, but they're not the ones you're reaching with your existing marketing strategies.

 

[abeazishar]

@kc8vji The one piece of advice is to ensure you’re spending your ad budget on strategic partnerships vs traditional paid/organic marketing.

 

[kc8vji]

@abeazishar There are so many different sales channels (cold calls, emails, Instagram, Twitter, FB, LinkedIn, Google Ads, content creation, video content creation, influencers, catalogs...) that it can take years to check whether some of them work for us or not. And in the end, it can be that there is no product-market fit or the market is too small for this product, or you've chosen the right direction, but your competitors have already won the market.

That's why I decided to create this topic. Maybe somebody had similar issues and can point the direction where to look. I think it can be helpful for entrepreneurs who try to figure it out in tons of marketing and sales materials.

 

[rednecklutheran157]

@kc8vji Just judging from your post, it sounds to me like you might want more analytics. What do you mean by it didn't help much? There's no increase in sales?

What about the number of visits to your site? And the percentage of signups from there? Are people simply not going to your link from your emails? Do they even read their email?

All these can be tracked and will help you tremendously if you haven't

 

[kc8vji]

@rednecklutheran157 I would say there is a regress in sales. At the moment, we have one demo every couple of weeks.

What about the number of visits to your site?

Earlier, we ran a Google Adv campaign, and we had around 300-400 visitors per day with a few demo requests every month. Now, we run an email campaign and get about 10 visitors per day and a few demo requests per 2 months.

Are people simply not going to your link from your emails? Do they even read their email?

We send about 160 personalized emails daily and have a ~55% email open rate and ~6% reply rate (most of them don't book a demo, though).

Maybe we need to send more emails?

 

[rednecklutheran157]

@kc8vji I'd recommend reading the "The Lean Startup" book. The author writes a lot about things that may be helpful for you. He focuses on running experiments to get validated learning of your startup.

It's really hard to say much without knowing the specifics of your business.

Just on top of my mind:

- Sounds to me like your problem is in converting leads to sales. To increase the leads, of course you can send more emails, etc. But that doesn't seem to be your issue.

- I would recommend really defining the problem you're solving, the solution you're offering. And most importantly, your assumption about the customer. In the book, the author defines this as the leap of faith assumptions.

- Your priority then is to test & validate each assumptions using the traffic you currently have.

- This will eventually lead you to be confident whether you actually have product market fit.

Again, I'd recommend reading that book as it goes into detail about what kind of assumption and experiments you should be running.

 

[kc8vji]

@rednecklutheran157 Thank you for the book. I will definitely read it.

 

[lindsey35atl]

@kc8vji It’s very difficult to diagnose without more details. For starters, what’s your current ARR and ACV?

 

[cmfam]

@kc8vji If it's B2b, I think you should also include direct sales in the mix. What's the price point?

Have you tried Cold email marketing or even cold calling?

 

[kc8vji]

@cmfam Yes, we tried and continue experimenting with cold email marketing, but we've never tried cold calling.

Could you please, tell more about direct sales in the context of B2B SaaS products? From our experience, when we hire sales managers, they expect a stream of qualified leads from lead generators and marketing team.

Is it common in sales industry when a sales manager has his/her contacts of decision makers and makes direct sales for them?