User Feedback: SaaS Approach Explained

Despite having a very different approach compared to traditional business models, customer feedback isn't any less important for SaaS products. In fact, due to the steep competition, the constant need to innovate, and regular updates and changes, collecting, analyzing, and acting on customer feedback are more important for SaaS businesses than traditional ones. And since it is so important, SaaS companies simply can't afford to ignore customer feedback and sentiment, since that's a one-way ticket to failure.

But knowing the importance of user feedback isn't enough, companies that offer SaaS products need to have concrete strategies for collecting, analyzing, and acting on customer feedback. This is precisely the goal of this article: Equipping you with the strategies you need to successfully understand and keep track of customer sentiment.

How Does SaaS Customer Feedback Differ From Traditional Businesses?

There are many traditional approaches to collecting customer feedback that are simply not applicable to a SaaS business model. To understand why, you need to understand the differences between customer feedback for a SaaS product vis-a-vis a traditional one:

Customer Sentiments Directly Affect the Revenues of a SaaS Product

When you buy a traditional product, even a software program, it is a one-time purchase. You pay for it, start using it, and that's largely the end of your interaction with that business. Even if you end up being completely dissatisfied with the product, you've still paid for it in full.

Now, when a customer wants to use software with a SaaS model, they are not going to purchase the piece of software. Rather, they'll purchase a weekly, monthly, or yearly license to use the piece of software and its features. What happens when the client is dissatisfied? When next month rolls around, he'll simply refuse to renew his license, which means a direct financial loss for the company operating the piece of software.

What this means is that for a SaaS company to be successful it needs to regularly and religiously capture feedback from its clients and make sure they're happy and satisfied with the service. Any widespread dissatisfaction could spell the end of the company.

How Can SaaS Companies Collect Feedback?

#1 Customer Survey

Customer surveys are a traditional yet effective way of asking for feedback. To properly conduct a customer survey, you first need to prepare a list of questions you want to ask your customers and then compile them into a proper list.

Now that you have your survey questions, you need to contact your customers and encourage them to take the survey. There are several ways you can do that. You can ask them directly when they're using the service or you can email them a request to take the survey. The correct approach depends on both the industry you are working in and the tone and seriousness of the survey itself. Both unwanted emails and notifications might annoy professional clients, so you need to approach a customer survey with tact.

#2 Product Feedback Requests

Feedback requests are generally open-ended calls to customers to provide their feedback on the product (in this case a SaaS) they're using. They generally don't adhere to any concrete structures and simply ask for feedback in the form of a line or two from the customer.

Feedback requests are qualitative and can help inform you about general sentiments among users of your service. However, due to the open-ended nature of the request, the customer feedback you receive generally contains very little useful information, so, many businesses fail to draw actionable insights from the results of feedback requests. However, they can be useful when paired with more feedback from other methods.

#3 Feedback Tool

Instead of handling it yourself, you can rely on feedback tools to help you design surveys, send them out to clients, and collect the results. Feedback tools don't present an exclusive kind of feedback collection, rather, they aid and enable you in various ways. They can help you design visually striking surveys, they can help you send push notifications, and they can help you clean up the survey data.

If you don't have experience collecting and analyzing feedback from customers, feedback tools not only can make your job much simpler, but they can even improve your success rates!

#4 Net Promoter Score (NPS), Customer Effort Score (CES), and Customer Satisfaction Score (CSAT)

Several different types of feedback collection methods are all exclusively built around a single question. Each one of these has a singular goal: To gauge customer sentiments on that question and that question alone:

• NPS
  • NPS surveys ask how likely is a customer to recommend your service to someone else by coming up with a score from one to ten.
• CES
  • CES surveys ask how easy, simple, or straightforward is the use of your service.
• CSAT
  • CSAT surveys ask customers to rate how satisfied they are with your service.

Evaluating CSAT, NPS, and CES

Each one of these surveys asks a very important question, and due to their singular and simple focus, they are very easy for clients to answer, so implementing them is a great way to access simple, yet informative, feedback from your clients.

Though their simplicity is their strength, it is also their weakness. Their singular focus means these surveys provide no information about other important questions. Want to gauge customer loyalty? Wondering about the customer journey? You can't answer these questions through NPS, CES, and CSAT surveys.

#5 Third-party Feedback

Designing and using your surveys with specific questions whose answer helps you make better business decisions is very important, but these surveys are not and should not be your only source for feedback.

There is plenty of valuable third-party feedback that you need to pay attention to. This includes online reviews, your service's perception on social media, and even discussions on a blog or a feedback board. You should have a general idea of how your clients discuss your services in various spaces online. These give you a unique perspective that's simply not obtainable through surveys.

This, however, doesn't mean third-party feedback has no issues. It has several glaring issues that you need to be aware of before taking the information into account.

Downsides of Third-party Feedback

• A lot of third-party feedback is low quality, unverifiable, and untrustworthy. You need to discern which sources you take into account.
• After your service reaches a certain popularity, it can be increasingly difficult to create a holistic picture of how your service is perceived. There will be very disparate criticisms, complaints, and suggestions directed at your service.
• It is exceedingly difficult to quantify third-party feedback and turn it into actionable insights. And when it is possible, it requires a high level of expertise, time, and capital investment.

Tips to Improve Quantity and Quality of Feedback

Even if a SaaS company were to perfectly carry out all the approaches we listed above, they'd likely still be wanting in both the quantity and the quality when analyzing the feedback they receive. This isn't because the above approaches don't work, but rather, not only is collecting feedback difficult, but, due to how important it is especially for SaaS companies, there are very slim margins of error.

This is why we've come up with a list of important tips that can help you improve both the amount of feedback you receive and the number of important insights you can draw from the feedback:

#1 Use Surveying Approaches Suitable for Your Industry

SaaS services are increasingly prevalent in all major sectors and industries of advanced economies, and there's simply no unified approach to surveying and feedback collection that can work equally well for SaaS companies regardless of the sector they operate in.

From management to construction and IT: clients operating in each sector have different expectations, norms, and even language. To successfully acquire feedback, you need to understand the norms and meet the expectations of the industry your clients operate in. Here are some simple examples to illustrate the point: clients operating in IT might be particularly allergic to pop-ups, which means that when you try to ask them for feedback, you should try a different approach. Management clients, on the other hand, might appreciate a more formal, straightforward approach, which might make email surveys suitable for the task.

Ultimately, you have to analyze the environment you operate in and accommodate your strategies to that environment. This is a general statement, but it certainly holds for SaaS feedback collection.

#2 Incentivize Feedback Submission

Incentives work - this is true in economics as it is true in feedback submission. If you want a large number of your clients to take time out of their day to provide feedback, sometimes through comprehensive surveys, you likely have to offer something in return.

An obvious incentive is a slight extension of their existing subscriptions, but SaaS companies have many options available to them. It can be a time-limited trial of a higher service tier with access to better, more powerful features. It can be a discount on their next purchase. Here, you're only limited by your creativity and your business model. As long as the incentive is both worth it and reasonable to hand out, you should have great success increasing the rate at which your clients submit feedback!

#3 Tailor Your Messaging to Specific Client Segments

The principles we mentioned regarding how different industries require unique approaches tailor-made to their expectations hold across different client segments as well. As your SaaS company grows larger, it is highly unlikely you'll be working with one type of client only. You'll slowly be able to segment your clients into specific categories. This could be based on the size of the company, the stage of the customer journey they are in, or any other meaningful metric.

Once you segment your client pool, you should be able to see ways in which a specific segment will be more responsive to a particular survey question while another segment might completely ignore it. Once you draw up individualized plans to collect customer feedback from each segment, you should experience far more success.

There's one very common pitfall you must pay attention to here, however: when you receive feedback from a specific client segment, any insights or information you gain from it won't necessarily apply to other client segments. Your clients can only be segmented if there are meaningful and measurable differences between them, and these same differences mean that feedback from one segment doesn't translate to another.

#4 Frame Feedback Received in Terms of Actionable Insights

There's a key fact one should never forget when collecting, processing, and analyzing feedback: the feedback isn't an end in itself. It is a means by which you, as a SaaS company, can make more informed business decisions. You can have comprehensive feedback from every single one of your clients, but if this feedback is analyzed and turned into actionable insights you could use to improve your business, it is useless. It is that simple.

This fact should inform all your feedback-collecting and analyzing efforts. When you design a survey, the first thing you should ask should be, "How will the answers help me improve my service or business?" When you are thinking about creating ways to process third-party feedback, which is both time and capital incentive, you shouldn't go ahead with your plans if you can't lay down, in clear terms, how analyzing and processing this feedback will help you improve your services.

Feedback is extremely valuable, and not only can it help you increase satisfaction and retention rates, but it can also aid you when developing new features, expanding your services, or exploiting market gaps. There are always ways to turn feedback into specific insights you can leverage to help you succeed. Once you get into the habit of looking at the process through those lenses, you'll become increasingly adept at finding ways in which information from feedback can help your business.

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