March 2, 2015
Product Design and SaaS Value: Distinguishing on Design

Let’s consider, for a moment, an Apple laptop and one running Windows. What’s the first difference that comes to mind if I ask you to compare them?

After you’ve moved past your initial reaction about whether you prefer operating systems from California or Washington, what would you say is the main thing that makes the two products different?

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I’d bet you $5* that your first thought after your gut reaction was either price—the average Apple laptop is significantly more expensive than the average Windows machine—or design—Apple laptops come in carefully cut metals, while most Windows machines are made from plastic. Regardless of which thought you had first—price or design—you’re actually picking up on the same thing, because design and value are intimately related.

Design is much more than the physical appearance of a product; it encapsulates the entire user experience, representing all aspects of how a product and user interact. This mediation between user and product is a prime place to add value, and companies like Apple are masters of doing just that. By blending form and function, they create a user experience par excellence, which, in turn, allows them to charge premium prices for their products, ultimately resulting in continual growth and financial success.

How Does Design Relate To You and Your SaaS Product?

If great design is defined as a blending of form and function, how should we measure the design quality of SaaS products? Many B2B software buyers aren’t all that concerned with the appearance of a platform. Instead, they’re focused on how the platform functions in the context of the their day-to-day life. Function—not form—is the main aspect of product design that SaaS companies have to focus on in order to add value for their customers.

Even though slick design isn’t a leading selling feature in SaaS, companies can still distinguish themselves on design in two areas: user interface and feature differentiation. The user interface refers to the “form” aspect of design; the most successful platforms are those with an intuitive, user-friendly interface that serves to connect users to the real stars of the show: the differentiable features that set the product apart.


“SaaS companies can differentiate on design in user interface and feature differentiation."
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So what does the melding of form and function look like for a SaaS product, and how does it work to connect users to the product’s unique features? Let’s take a look.

How To Boost Your Prices Through Great Design — Netflix

Netflix is an example of a company that does a fantastic job of blending form and function within the realm of SaaS. Their user interface provides preview pictures of movie and television titles, and users looking for more detail can hover over the previews to reveal information about main actors, plot summary, and reviews from other users. If you’ve ever tried to use Amazon Prime to watch video on one of your devices, you know just how far ahead of the pack Netflix is in the interface department.

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But it’s not Netflix’s UI that’s responsible for keeping its number of Monthly Active Users (MAU) high; it’s the differentiable features such as licensed and original content that keep subscribers coming back for more.

Although Netflix is doing great on the form and function side of it’s business, its pricing scheme leaves something to be desired. The company’s value metric—the amount of screens simultaneously streaming content—is one aspect of how users receive value from Netflix, but current prices are not in line with perceived customer values. There are plenty of people—including myself—who believe Netflix is a bargain at its current price, and would gladly pay more.

So, if your SaaS product has a user interface that connects customers with its differentiable features in a way that adds value, your product is well designed and has great potential for profit. The only thing left at that point is to analyze your current pricing strategy to ensure that your company is capturing the greatest amount of revenue customers are willing to pay. Here are a few tips:

Different Customers Have Different Product Valuations — Your Pricing Strategy Needs To Reflect This Fact

Focusing on the important aspects of design lends itself to building a great product. But your customers are going to have varying opinions of what your product is worth. This is where creating a multi-price strategy that scales along the proper value metric comes in handy. We’ve written extensively on the benefits of multiple price points and proper value metric determination, but a short review is in order: multiple price points allow users with differing perceptions of value to use your product, and proper value metric determination ensures your users are paying for the correct features.


“Multiple price points let users with differing perceptions of value to use your product.”
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While careful attention to design can help SaaS products command higher prices, design is no stand-in for ensuring that the correct value metric is aligned with perceived customer values.

A good example of this alignment of attention to design while considering value metrics is Salesforce. The CRM platform isn’t going to win any awards for its appearance, but the user interface is still relatively straightforward and easy to use, making it a well-designed product for those who need it. This allows users to easily access the platform’s differentiable features. Plus, Salesforce’s value metric makes sense for the space it’s in—it scales on a per-user basis because customers receive more value from the product as more users have access to leads.

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This combination of a well designed product and the proper value metric results in product credibility and increased users, ultimately leading to more revenue.

Make Sure You Understand Your Buyers When Designing Your Products

Understanding what differentiates your product from your competitors’ products is important, but understanding how to improve your own product is equally important. Your customers hold valuable insights into bridging the gap between them and your differentiable features via design. By making your quest for good design and UI an ongoing process and continuously working to improve the way that your customers connect with your product, you give yourself the ability to further innovate and develop your product according to your customer’s needs.

In the end, your SaaS company is dependent upon users—they drive growth, financial performance, product design, and almost every other important aspect of your company. Understanding the needs of your users helps you retain them as recurring customers. Customer retention starts and ends with design; businesses build customer loyalty by designing products that people like, and like to use.

Beautiful, Beautiful Revenue

Even though “SaaS” and “beautiful design” aren’t often found in the same sentence, that’s no reason to ignore things like UI when you’re building your software. Making software that is easy to use and connects them to the features they care about, as Netflix has done, helps ensure you can build customer loyalty and increase the value customers assign to your products, allowing you to charge more and maximize your revenue.

And that’s beautiful no matter how you look at it.


*All bets in this post are rhetorical.


Dylan Ortega is a pricing analyst at Price Intelligently. He was born and raised in sunny San Diego, CA and enjoys running, golfing, and playing his Martin guitar. He holds a BS in Business Administration from Pepperdine University.
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