The New SaaS World ExplainedFeb 23, 2023
Things are changing fast and folks are struggling to make sense of it all. I'm going to explain what's happening, why it's happening, and how it's affecting the SaaS world we all know and love. I'd like to preface with the following statement.
To understand the world we must understand it's people and to understand the future we must understand their emotions.
I begin with that quote because I believe it to be the formula for comprehending the world around us and attempting to predict its future. Let me explain...
Humans are the fastest evolving species we know in existence. This means our behaviors, beliefs and emotions are constantly evolving and may, at times, go through rapid periods of change which may be challenging to understand. This is because much of the changes we experience in our civilization are generational.
This makes sense because we generationally learn from our parents and our parents generally have strong feelings about how their parents raised them, which impacts change in how they'll choose to raise their children. This level of generational change happens through all facets of our lives, and yes, inclusive of sales and business.
As I've explained in my course, The Modern Outbound Playbook™, over the past decade we've been transitioning from serving mostly Baby Boomer and Generation X decision makers in B2B SaaS sales. This means the way we marketed, sold, and serviced these customers is likely to change as Millennials take over those B2B decision maker roles.
Why? Because Millennials make purchasing decisions quite differently than prior generations because we are accustomed to having more information at our fingertips and doing more of our own research prior to interacting with a salesperson. This changes literally everything but most have only taken this with a grain of salt.
It doesn't stop there, in fact, that's just the very tip of the iceberg. What's happening today is so much bigger than a generational change in buying behaviors. So let me break it down in a way that's easy to understand. I'll start with this timeline of events and then explain each:
Phase 1 → Information Era *past
Phase 2 → Distaste for Sales *past
Phase 3 → Desire for Self-Serve *now
Phase 4 → Distaste for Marketing *soon
- The Information Era → As the internet has connected the globe in ways never before possible, humans now have access to information at their fingertips which previously may only have been discovered through speaking with people, reading books, or attending a class. Nowadays information has become easily accessible and our patterns and expectations over time have changed as a result of this. If I think back to high school when I'd have a debate on a topic with my buddies, if we wanted to determine who was actually correct we'd have to decide which teacher at school we were going to ask.
That teacher was our "source of truth" for information, but today that teacher has been quickly replaced by Google in most instances. Again, this changes generational behaviors and results in a world that starts to feel very unfamiliar and things that used to work in business suddenly stop working.
- The Distaste for Sales → As humans gain access to things they formerly needed to utilize other people for, they naturally begin to value those people significantly less, because they simply don't need them as much, or at all. This has clearly been the vein of salespeople's existence over the past decade and it's getting increasingly worse each day that passes. We are now seeing many companies "fighting against the grain" trying to find hacks and solutions to making old models work in new worlds, but this is simply a fool's errand. People don't like speaking with salespeople and that is not going to change because people are capable of making their own decisions and they would prefer to do so.
- The Desire for Self-Serve → This is the current phase we're in. With information at our fingertips the modern buyer now expects access to trying, buying, and even implementing software to be something they have the option of doing completely by themselves. If you think your software is too complex for a self-serve model, you're most likely going to get leapfrogged by someone who builds the same thing as you, while also solving for that self-serve problem.
This is the new focus for product design. It's no longer a game of building products that serve customers, it's a game of building products that market themselves and convert trialers into paying subscribers.
In other words, the sales, marketing, onboarding, and even service aspect of your "SaaS" is now fundamentally a core part of your product design and development. This not only allows you to more easily serve prospects and customers in the way they want, but it also helps you reduce your need for human capital, which while on one hand is a reduction in jobs, it's also a reduction of software cost and allows products to be developed and brought to market with significantly less capital. As long as some of these savings are passed along to the customer, it's a win-win.
- The Distaste for Marketing → This is what I believe lies ahead in our near future. We are already seeing early signs of this transition taking place and those who truly want to prepare for the future should pay hyper-close attention to this. It's simple to understand because we see it in all facets of life. We are living in a world whereby the common person is losing trust in things like news channels, media, politicians, governments, etc. They are beginning to realize that things are often presented in such a way that is a far stretch from reality and they are beginning to realize the number of ways these deceptions are negatively impacting their lives.
We're seeing this happen in the food industry where consumers are beginning to make smarter decisions with what they purchase, they're learning that marketing can often be with the intention of leading one to believe certain products are healthier than they actually are.
In other words, the consumer is becoming incredibly intelligent and they are beginning to view marketing as an often dishonest and manipulative practice. I believe strongly that the same level of distaste we see for salespeople and cold calls today will soon be seen toward any marketing campaign that is designed to influence behavior and get someone to spend money.
Particularly in a down economy folks will be increasingly more defensive toward anything that suggests they open their wallet. Humans are also getting more intuitive and their understanding of psychology, manipulation, and influence are at all time highs. These realities will continue to change the way consumers make purchasing decisions, rapidly.
So in the same ways that companies today feel the need to partake in certain social practices to have an "acceptable public image", these will most likely morph into completely and entirely different practices as Millennials, Generation Z, and soon, Generation A become more active in the business/consumer world.
For those who don't know, Generation Z is also known as Generation Omega, which means "The End". So it's not surprising that we seem to be preparing a new world for Generation Alpha.
With all of that said, clearly the world is changing and that's a direct result of people changing. I'm not even going to get into AI and Robots because while those items play a huge role, I think we generally all understand what's going on in that regard, but in short, in case you don't, the reality is robots and AI are going to replace the majority of work humans currently do to earn a living.
While there are many reasons to fear these transitions or even get angry at them, that's only a waste of energy and time because we cannot stop these changes and we are only best trying to embrace them. The good news is that if we replace most of what humans currently do for work with AI and Robots, that means we can all evolve to a new world where people get to do even more important and interesting things.
That's all I'll mention on AI/Robots in this blog since I cover it at length in my course and elsewhere.
Now, back to the point, people are changing and the way we can sell or market to them has no choice but to adapt. This will happen in all industries but it will impact certain folks sooner than others depending on who you're selling to.
So what can you do? What should you be thinking about?
It's super simple.
You should be thinking about how to serve consumers what they want and need.
That's really all you have to do.
This means focusing all energies on actually doing the right things, rather than looking for creative and interesting "hacks" (for lack of a better word) to acquire customers and grow your business.
If I'm not making this clear enough, let me try to speak more bluntly; If your product or service is not great then you are screwed.
Gone are the days where talented salespeople or creative marketers can make businesses with poor products and/or services actually successful. This is simply because we have allowed humans to get ripped off and "burned" more times than they can count and the result of this with humanity will always be that they continue to get smarter and more defensive.
So yes, it's why they stopped answering your cold calls, it's why they blocked your spam emails, and it's precisely why they're going to start questioning every piece of marketing content that's put before their eyes in ways they never have before.
These are the same folks who read the ingredients on the labels of the food they buy and actually research what the ingredients are before making a purchase.
As a result of this, I think we need to stop thinking about software distribution as a Sales and Marketing game and instead we simply need to focus on building products/services that solve problems better than anyone else can.
When we do that effectively we don't need a lot of horsepower on the sales or marketing side because modern consumers are capable of researching, testing, and deciding what to buy on their own.
Let me say that again because it's one sentence that sums up this whole blog perfectly:
Modern consumers are capable of researching, testing, and deciding what to buy on their own.
I know the opinions of Elon Musk are strong in both directions so this may not be an example that resonates with everyone but personal feelings about Musk aside, just look at how he built the best car company in the world (by definition of efficiency and profitability).
He did it all without a marketing budget or a sales team which was only possible because he focused relentlessly on making the best possible product, which in turn, will market and sell itself, even to people who don't like the company or founder.
You'll also notice the majority of companies coming out of OpenAI will have very bland websites, little-to-no marketing, and generally no salespeople. This is because they are following the principals I outlined in this blog.
They are focused on building superior solutions and they understand that with a superior product they do not need the bells and whistles, the annual re-branding projects, the big marketing and sales teams, etc.
Those ingredients were only necessary in a world where communication and information was difficult to obtain.
Welcome to The New SaaS World.
SUBSCRIBE TO →
THE REVENUE GROWTH BLOG™
Receive an email when a new blog is posted.