How to Prioritize Integrations for Your B2B SaaS Product
When adding integrations to your SaaS product, you need a way to decide which ones are most important and prioritize your development accordingly.
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One of the most frequent integration questions we hear from SaaS teams is, "Which integrations should we build first?"
This question often arises as they start with our embedded integration platform (since it substantially increases how quickly they can launch new integrations). Still, it's relevant no matter how you build integrations to the other products your customers use.
Outside of core product development, integration development may be the most important thing you can do to define the future of your product.
You may have identified dozens of integrations you'd like to build, but which ones need to come first? Sales can give you all sorts of data about which missing integrations impact the pipeline. Your success team has a list of customer requests they would like to deliver. Engineering has a feel for the level of effort and knows which ones it would like (or not like) to build.
Similar to setting the roadmap for your core product, you need a way to determine which integrations to build first and which can wait. To help you with that decision, let's look at common strategic and tactical approaches to setting integration development priorities. But first, let's recap why integrations are so important.
Why Are Integrations Important for SaaS?
With the average mid-market company using 137 different software tools, it's no surprise that integrations are increasingly important. Without integrations, apps turn into data silos. That, of course, is inefficient, making product integrations essential for the modern software ecosystem.
You are already familiar with SaaS (software as a service) companies like Slack and Hubspot that have leveraged integrations to make themselves indispensable to their customers while growing at phenomenal rates.
In today's market, with few exceptions, a successful B2B SaaS product needs integrations – often quite a few. So let's look at a few critical strategies for prioritizing your SaaS integrations.
Strategies for Prioritizing Integration Development
We have found three common strategies that successful SaaS companies use – often in conjunction with one another – to determine which integrations to build first:
- Which integrations are most needed by customers and prospects?
- Which integrations will extend your product's functionality and SAM?
- Which integrations will increase your competitive advantage?
Which Integrations Are Most Needed by Customers and Prospects?
Depending on your product, you may have a largely homogeneous customer base, or your customers may have substantially different integration needs based on the other software they use. That can vary greatly based on company size, industry, sophistication, and region.
Some situations are straightforward. Perhaps 40% of your customers use the same third-party accounting system, with the other 60% spread over a score of different accounting systems. Integrating your product with that first accounting system will bring needed efficiencies to a substantial portion of your customer base.
But what if the data isn't that obvious? What if only 10% of your customers use the same third-party accounting system? Is that enough reason to work on that integration first? Knowing that one of those accounting systems is gaining huge market share among your ICP or that another 10% of your customers will shift to it in the next year can give you the data you need to prioritize.
As you can see, a big part of using the customer need strategy is getting good customer data. Do you have a regular touchpoint with your customers, like a quarterly business review (QBR), where they can tell you how everything is going and share concerns and upcoming needs? If you aren't getting regular, solid customer feedback, you might be trying to make strategic decisions based on anecdotes.
Along with customer data, you also need prospect data. If some non-trivial number of your prospects are also using or planning to use the same third-party accounting system, that should factor into your decision. Do you have a mechanism for your sales team to pass this data to your product team? For example, if you use a tool like Gong or Chorus to record sales calls, you can set specific terms (such as "integration") to be flagged in those recordings.
The bottom line is that you can only focus on the integrations that are most needed if you know what other SaaS apps your customers and prospects use and how they use them.
Which Integrations Will Extend Your Product's Functionality and SAM?
That is, which integrations will supply desired functionality to your product and help it do more for your customers? In many cases, integrations can expand your serviceable addressable market (SAM) by providing functionality that solves the problems of larger prospects, more sophisticated prospects, or prospects in a new industry or region.
In some situations, building that functionality directly into your product makes sense. But sometimes, adding certain functionality would take your product in a direction that detracts from your core value proposition. Or you could add that functionality but lack the resources to do it right now.
In either case, building an integration to another app that supplies that functionality can often extend your product's capabilities and SAM for substantially less work and cost than building that functionality in your product right now.
Let's say your product is an industry-specific classification system. However, your product lacks the functionality that more sophisticated customers need to automate the scheduling of classification interviews. As a result, you need to decide whether to add scheduling to your product.
In this scenario, integrating with a scheduling system (ideally one that your prospects are already using) will quickly address those scheduling needs and expand your SAM while buying you time to determine whether there are long-term benefits to having scheduling as part of your core product.
Which Integrations Will Increase Your Competitive Advantage?
Maybe you've had your product on the market for a while, and it's mature, and you've built a few integrations for it but are struggling to differentiate yourself from your competitors. Or you don't have any product integrations, but you are considering an upcoming major release of your product and would like to do something to make your product stand out from the competition.
How many times have you seen "integrates with X" as a value proposition on a SaaS homepage? Unfortunately, if you don't have the integrations your prospects want/need, then they'll go with someone who does. To keep this from happening, find out what integrations your competitors have that you don't, and then focus on closing those gaps as quickly as possible.
But beyond matching what your competitors offer, build integrations to outpace the competition. Each SaaS company that builds an integration can choose (within limits) what that integration does, so integrations with the same third-party app can vary immensely. Are there integration categories where you could offer more, better, broader, or deeper integrations than are available from your competitors? If so, building those integrations and detailing how/why they offer greater value than your competitors' integrations with the same systems may be the edge you need.
To make some noise in the market, you might also consider launching an integration hub or marketplace or releasing several integrations in an entirely new category all at once. Doing so lets everyone know that you are making a significant investment in integrations as part of your long-term strategy and signals the market that your product is the one that integrates with everything else they use.
Tactics for Prioritizing Integration Development
These strategies are essential for big-picture, long-term planning. Most SaaS companies use a combination of them and ultimately look at the overlap to choose which integrations to build first.
Your planning should also include flexibility for handling integration needs that pop up periodically, often more frequently than you might want them to. Let's look at some common scenarios where a tactical approach is necessary.
You Need an Integration to Win an In-Flight Deal
Sometimes, saying yes to adding a prospect's integration requirement makes the difference between winning and losing the deal.
The key here is to agree to those integrations that are also needed by other prospects and customers, add value to your product, or help your competitive position.
Sometimes, you may also say yes to an integration to win an important customer, knowing that it will be a custom or one-off integration but that you can pass along the costs to the customer.
In other cases, you may need to tell the customer "No" if the request doesn't fit with the direction of your product or what you can charge the customer won't cover your costs. Or you may need to tell the customer that you will build the integration, but it will be a few months until you can deliver it.
Whatever you agree to, make sure it's something you can execute in the promised time frame to get the new customer relationship off to a good start.
You Need an Integration to Keep a Customer
Sometimes, a missing integration causes enough pain or inefficiency to a customer that the customer considers churning – especially if a competitor has or agrees to build that integration.
Leaving aside the question of whether you want to keep that customer, you should ask questions about the integration. Is it a current gap in your lineup? Does it make sense for your overall product plan? Will it add value to only this customer, or will it be valuable for other customers or prospects? Can you fit it into the short-term schedule, or is it better to revisit it in a quarter or two?
Delaying other priorities to build an integration to keep a customer may or may not be the right decision. But if you decide to do it, your decision should be backed up by as much good data as possible.
You Need to Replace an Existing Integration
Sometimes, an existing integration no longer meets customer needs. Ideally, you've planned for integration replacements and worked them into a long-term strategy. However, there will be times when new industry regulations or third-party changes (whether to languages, libraries, or APIs) can break something that worked fine yesterday.
Sometimes you won't need to replace an integration. But in many cases, you may only know once your devs investigate whether a small code change will do the trick or if a complete rewrite is required.
Communication is key. Let your customers know what's happening, how you plan to address it, and when and why they'll need to migrate to the new integration.
Change the Plan as You Need to
Planning product integrations is challenging, in no small part, because systems and technology are constantly changing. Setting up a strategy for prioritizing integrations doesn't tend to get any easier if you wait, but you also need the flexibility to change that strategy over time.
Integration usage and churn provide essential data for adjusting that strategy to account for changes to the market and your customers. And yes, regular communication with your customers is the key to staying current with how they use your product and its integrations.
Whatever strategic approach you put in place for prioritizing integrations is a starting point. As a result, you'll need to periodically revisit your strategy to ensure it isn't stale and that you are not missing market opportunities.
Published at DZone with permission of Bru Woodring. See the original article here.
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