The Full Guide to Customer Research for SaaS in 2023

The Full Guide to Customer Research for SaaS in 2021

Some people say that Marketing makes the world go round.

But what happens when Marketing doesn’t work? Is it a stable ground to rely on when it comes to growth momentum?

The best SaaS teams in the world are using one simple and proven process as a guiding light: customer research.

Let me guide you through the brass tacks of the only, may I say, “growth hack” that can safely lead your product to success.

Before we start, I should probably mention that for the last 3 years I have focused on customer research. Yet Growth Marketing and Product Growth is not where I started. For several years I worked in head Marketing and Digital positions. I also worked with numerous tech startups and even built and run companies myself.

Working as a marketer had its ups and downs, counting many successful collaborations while others failed completely. After 10 years in the field, I hated relying on luck when it came to results, client satisfaction, or being happy with what I do.

By investigating factors that differentiated a product from failing or succeeding, the product/market fit concept came to me. A whole new world was revealed right before my eyes.

Product/market fit means that not only is the product good, but it successfully responds to the customer group it is designed for.

It’s pretty simple.

If we have a clear understanding of what customers need, their everyday problems, and their jobs to be done, we can build better products that solve real problems. These will truly be successful market fit products.

Why is customer research important?

Strange as it seems, there is a huge gap between what companies think their customers want and what their customers actually want.

When we first discuss customer research findings with companies, we mostly get answers like “You are crazy”, “No way, these are our customers”. Yet, as we turn those findings into actionable insights, companies have a reliable guiding light to step into important decisions that lead to success.

Let’s walk you through the steps we follow in order to gather these valuable findings before translating them into a custom-made growth strategy for SaaS companies.

An audit reveals the problem behind the “symptoms”.

Before beginning with actual customer research, an audit is necessary. Companies usually come to us with a symptom, not an identified, describable problem. The audit works as a medical examination that reveals the real problem.

What an in-depth audit can reveal about your product

In short, here are the things you should be checking for in a product audit:

growth sandwich audit steps
What to consider in a product audit

Now let’s go through this one by one.

1. Reported problems

The best way to kickstart an audit is with reported problems; in other words, what does the company think the problem is?

The most common symptom is that “marketing/advertising doesn’t work!”.

Usually, the actual problem appears in a different stage of the funnel than reported. So, digging deeper into funnel stages will reveal the whole “iceberg”.

For example, if a company describes that they have happy customers, but struggle to get new ones, the real problem is usually in the front-end of the funnel (positioning, tone of voice, onboarding procedure, etc.). But if the company says that they do acquire customers, but customers leave quickly, the main problem must be hidden within the product itself.

So reported problems work as a starting point that, after further investigation, eventually leads to diagnosing the real issue.

2. Reported Ideal Customer Profile (ICP)

Asking companies to describe “who their ideal customers are” always brings back useful input. Most of the time, there is a huge gap between who companies think their ICP is, and who their target ICP should be.

Answers that define SaaS ICP as “companies with 50-200 employees in England” or “retail shops in America” are very generic. These companies probably do very broad targeting because they haven’t yet figured out the ideal market segment for their product.

So it is very important to understand the client’s idea of ICP. It helps extract valuable information about where the real problem is hidden.

3. Positioning

Positioning is about defining the place a product occupies in the minds of its target audience. So, another part of the audit is to visit the product’s website and try to understand within a couple of seconds what it offers and what value it provides.

It is very common that SaaS companies describe what their product does through the technologies they use to do it.

e.g. “We use blockchain in the food industry. Distributed decentralized food delivery”

On the other hand, users never get technical. They only care about the outcome, the job you help them do, the positive effect your technologies will have on their everyday to-do tasks. The truth is nobody out there actually cares about the technologies behind the product, except perhaps investors!

A good positioning makes a product unique and makes the users consider using it as a distinct benefit to them. So, positioning review is a crucial part of the audit procedure.

4. Customer Journey & Flow

The next thing to be checked after positioning is the customer flow.

During this audit stage, we spot things on the customer journey that can be improved. We also check on flow moments offered for customer feedback.

Every product has user journey spots that work amazingly as feedback checkpoints. Onboarding and cancellation flow are two of the greatest moments to abstract valuable information as direct customer feedback. But grabbing the perfect customer flow moment is not enough. The thing is, “Do we ask users the right questions?” at the right time?

user adoption flywheel
User adoption journey

Unfortunately most of the time the feedback a company already has is not useful as it is based on vanity questions. Tweaking feedback touchpoints can turn the customer journey into an automated valuable feedback collection source.

5. Marketing efforts

The way a company communicates with customers throughout all digital channels has a major impact on product performance.

During this audit step it’s important to check:

  • What is the source medium that brought customers closer to trial?
  • What does the company “sell” to get them?
  • What expectations do customers have before trying the product?

It’s very common that marketing efforts bring low-quality traffic that doesn’t meet the company’s KPIs. So visitors basically just trash-in and then trash-out without using the product or converting to paying customers.

Sounds familiar? Let’s see where it may lead:

saas growth marketing example

Founders enter an unhealthy battle between spending money and pressuring their teams to come up with new features. This is a strategic move based on wrong impressions, that lead nowhere and usually backfires after a while.

Once again the main route of the problem is not based on product features. It’s based on what companies say, who are they talking to and which source-medium customers come from. In other words, the problem occurs in marketing efforts.

6. Churn rate check

One of the most representative metrics that reveal whether a product can or has already approached product-market fit, is churn rate.

For instance, let’s say a company struggles with marketing but has strong retention and a low churn rate.

That’s a piece of strong evidence that the product delivers what it promises and already has a solid engaged audience. It also means that discovering the product’s strength and bringing it to the center of communication, will increase the product’s active users.

7. Sources of feedback

As already mentioned, during the customer journey there are many checkpoint opportunities that can be used as feedback moments.

So feedback sources should be checked for 2 reasons:

Firstly, to see if there is any useful information that should be considered during the main customer research process. It’s very important to know what customers say when coming onboard and when leaving. This is also a unique chance to understand if there is some sort of connection between segments and churns.

Secondly, to check if these touchpoints need some tweaking.

Most of the time input provided during the customer journey is far away from the truth, as it’s based on vanity questions. So more often than not, along with customer research, we need to build an automated information & feedback flow that will provide useful user insights to the company.

8. Category competition

In order to understand true competition, there has to be an investigation around the product’s jobs-to-be-done or users’ expected outcome.

But when it comes to category competition we need to see the bigger picture of the market.

  • What are the competitors’ features?
  • What is their strategic communication and marketing plan?
  • Which are the target audiences they talk to?
  • How do they build their landing pages?

The best way to get the market trends is to monitor competitors and spot their marketing plans & choices.

9. Online review platforms

Last but not least, in order to have a clear view of the market, we also need to check online review platforms.

  • What do users say about our product?
  • How do users review competitors?

Online reviews are a valuable information source. They prove which competitors are popular and strong and which ones are vulnerable. Based on these insights we can draw the frame of the market and spot where our product of interest stands compared to competitors.

The main steps of customer research

The real customer research journey begins after the audit.

In a few words, customer research is the process of getting to know your ideal user thoroughly. It’s about revealing the true Voice of Customer by designing a research process that combines in-depth and at scale quantified qualitative research data.

You can use mixed research methods if you need to investigate quantitative and qualitative data simultaneously. This method is popular today because it allows a more comprehensive understanding of customer behaviors, preferences, and needs, ultimately leading to more informed decision-making in product development and marketing strategies.

growth sandwich customer research
What is customer research?

The key to success is that we don’t just deliver an academic research report. We turn research outcomes into actionable insights that companies can safely use when stepping into critical strategic growth decisions.

Read on for the 3 stages of a full customer research circle.

SaaS customer research stage #1: Qualitative research

qualitative research in customer research
Customer research stage 1: qualitative research

a. Representative samples

The first step to qualitative research is defining the sample of users we will talk to. The sample might include all sorts of users; power users, churned users, fresh users, etc. In any case, it is crucial to choose a representative sample of the customer base, or segment.

For instance, if we choose power users, we first need to define this exact group using multiple user attributes.

user segmentation userpilot
Building advances customer segments using Userpilot for in-app targeting

We need to check the numbers, gather several criteria, and draw the ICP. Of course, the ideal customer is hard to be found among users. So, we need to go through some trial and error, pair the ICP with the existing power users and finally create a truly representative sample.

b. Recruitment

After defining the representative samples, we proceed to recruitment.

During recruitment, we actually represent the company and invite users to interviews. So we pay close attention to creating a customer-friendly experience, based on tested processes, that will leave users a positive impression.

In every step of the way, respect for user’s privacy and compliance with GDPR is taken for granted.

c. Interviews

There is a common misunderstanding about interviews. Many think they can do it, but very few can actually do it right. The key to a successful jobs-to-be-done interview is a combination of know-how & attitude.

  • The interviewer should have a talent for breaking the ice and use psychotherapeutic techniques to erupt valuable information.
  • At the same time, interviewing is about asking the right questions, being an active listener, spotting interesting points. It’s about daring to go beyond the script, to extract the exact information you are looking for.

The fascinating thing about interviews is that we usually begin the procedure already knowing about the product and its customers. Yet time and again, users surprise us with their answers and lead us to a whole new perspective of the product.

For example, a client of ours was about to invest a large amount of money, effort, time, and resources on improving the star feature of their product. Through interviews, we realized that users not only did not use the product’s star feature, but they adored the product for a feature the company almost didn’t mention!

So interview insights provide high value to customer research. Here is the kind of information we extract through interviews:

  • Identify real competition: which product do users abandon to use yours and if they abandon yours which is the product they turn to?
  • What are the Jobs-to-be-done that users come to the product for?
  • Customer words on describing the product that can be used as catchy one-liners.
  • What do disappointed customers say about their user experience?

d. Cluster reports

So what do we do with all these research findings?

The qualitative research procedure is not just about gathering customer data and delivering an academic research outcome, as most researchers do. Having a product and marketing background, we turn research & interview learnings into actionable insights.

At the same time, we usually come up with unexpected findings based on accurate data that can define the company’s strategy on features to build, features not to invest on, target audiences, communication strategy e.t.c.

SaaS customer research stage #2: At scale research

at scale research growth sandwich
Customer research stage 2

a. Automated feedback collection

Information gathered on customer flow touchpoints is honest because users do not realize they take part in the research. So we tweak important touch-points to automatedly collect valuable feedback. The main idea is to discreetly insert some of the interview questions into the onboarding & cancellation flow.

These feedback loops lead the company in becoming independent and truly customer-led.

Also, from a scientific point of view, automated feedback collection validates qualitative research results at scale. It’s a moment of truth when the company can evaluate the quality of research services.

b. Surveys

Surveys are often seen as intrusive and less effective as they’re positioned out of the user flow. Yet, when done right, surveys can be very useful in conducting original in-depth research on any subject that matters to the evolution of your product.

To use another example: we ran a survey about pricing sensitivity on SaaS features. We were looking for customers’ opinions on features offered in the free/ premium/ super premium plan. The survey results gave us a crystal clear view of features and price range as well. Those findings defined the lowest and the highest price limits that will make the product look neither too cheap & low quality nor too premium.

Based on this data we designed a pricing strategy that eventually led the product to success.

c. User recordings

User recordings are used to gain a real understanding of how users interact with the website or the product.

Info from user recordings enriches research findings with empathy as they point out what intrigues users, what are their difficulties, and what are they interested in. Session replays further reveal user behavior that people hide or didn’t mention during interviews.

SaaS customer research stage #3: Customer interaction/ Success

In every company, employees who interact with customers are the most useful feedback ambassadors. A truly customer-led company should care about how salesmen and customer success employees communicate with users.

So, on top of all research procedures, it is necessary to enhance sales pitches with a pint of customer research & jobs-to-be-done points of view.

Companies should ask the right questions and gather users’ feedback about problems, expectations, and desired outcomes.

But the most important thing is to translate that valuable input into smart and sustainable products that will successfully solve real problems.

Conclusion: How do you know when it’s time to turn to customer research for your SaaS?

The most intimidating part about running a SaaS company is when you need to make crucial decisions but lack both the confidence and the evidence to progress.

Research has negative connotations in the market. It is considered a costly and time-consuming luxury process that is nice to have, but only Series B companies choose to get it.

We primarily work with Series A companies at their crucial growth momentum. It’s the point where they make risky decisions to grow and most of them fail to do the next step.

The truth is that customer research is the only “growth hack” that a company can safely use as a guiding light to step into important decisions that lead to success.

That being said, the time to start doing customer research is yesterday.

And after reading this article you have all the steps you need to take to get started.

Looking for a way to gather customer insights without having to code? Click on the banner below to schedule a demo with Userpilot!

About the author

 Aggelos Mouzakitis

Aggelos is the founder and Growth Product Manager of Growth Sandwich. He is among the first Customer-led experts in the world, leveraging advanced, Jobs-to-be-done customer research to orchestrate and guide Growth for B2B SaaS companies. A- and B- series SaaS are hiring him to organize, design, and execute programs that infuse the whole company with qualitative data, empathy, and the necessary knowledge to address any growth dilemma. In the last 4 years, he has worked with more than 100 SaaS companies and trained literally, thousands through my physical and online courses.


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