Software Monetization, Change and Insanity

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The classic definition of insanity is doing the same thing and expecting different results. What REALLY drove us crazy was doing the same thing and getting different results.

Every day we fired up our email client, the calendar function would work. Until one day our calendars stopped working – for no apparent reason. Was it the email client? Was it the calendar application? Or was it the application that connected to Google Calendar?

Install, reinstall, online searches… We ruled out the email, calendar and the application connecting to Google. Nothing seemed to help until we found an obscure post saying that Google changed the way applications connect to Google Calendar.

The change Google made had unanticipated, unexpected and unwanted consequences to the add-ins associated with the calendar function.

Two Lessons for SaaS Companies

There are two lesson for SaaS vendors that want to deliver consistent value to their customers.

First, make sure any change that you make meets customer expectations or assumptions about change:

  1. the change is always for the better,
  2. the change is incremental and
  3. the change can occur independently of anything else.

This can be very tricky if yours is an end-user facing application. Often these applications deliver value as part of an internal workflow or business process. Any change you make is likely to have an impact on how the workflow or process works. Minimize any disruption if you can’t eliminate it.

Any change that affects your customers’ productivity or operations will change how they view the value of your application.
The second lesson applies if you are dependent on other technology suppliers. If your company is part of the SaaS infrastructure and other applications depend on your products, make sure any changes you make are good for your business and that of your customers. Make sure you let other companies know about the change and, if possible, let them test it before going live.

Perceptions of Value

Any change that affects your customers’ productivity or operations will change how they view the value of your application. A customer may accept the unwanted changes you have caused but this may be enough to cause them to consider other alternatives and make an unwanted change to your revenues – by defecting to a competitor.

If you want to realize your full monetization potential, be careful with changes that can surprise your customers.

About the Author

Jim Geisman

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Jim is cofounder of Software Pricing Partners. An original member of the IMP team (ARPAnet project), Jim has helped emerging, growth and enterprise software companies solve some of their toughest pricing problems.

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