The Hard Thing About Multi-product in SaaS

The frustrating thing about hard things is that they are often obvious in hindsight.

My first experience of managing multiple products was at AppDynamics, a $3.7bn Cisco acquisition, where I was CTO & Head of Customer Success for EMEA. We’d built a highly successful system monitoring product, and through customer feedback developed a second product which monitored business transactions called BusinessIQ.

The revenue-generating second product

While playing back our work to the CTO of a major airline, the dashboard went bright red and he laughed, “Your dashboard doesn’t work!”. But next to the red signs, the BusinessIQ counter started spinning with the dollars of revenue lost and a list of customer names who had experienced first class booking failures. The airline’s system had failed but this incredible second product had captured the details needed to make back their revenue.

BusinessIQ became an obvious game changer for our customers and commercially for us; we charged per transaction so it gave us unlimited upsell opportunities. But we really struggled to get it off the ground in customer implementations. And this caused a big problem at renewal time, because the cost of BusinessIQ was often half or more of the value of the customer renewal.

Our retention problem

In hindsight, it’s obvious what the problem was.

We’d built a business around a value proposition geared towards IT people which all of our teams knew inside out. Suddenly, a major part of our revenue was from a different value proposition serving a different audience: revenue teams.

Our health scores stayed green because the core product was adopted but our gross retention suffered because customers weren’t getting value from our new product. And we didn’t know how to enable our Customer Success teams on what good looks like. From our users’ perspective, our second product had little relation to our core product. We were thinking about technology, but our users were thinking about value and business outcomes.

SaaS companies are expanding their markets

The recent turbulent years in SaaS — starting from the SVB meltdown, through the economic downturn and most recently into AI’s changing demands — have seen a huge increase in companies moving to multi-product offerings:

• New product offerings of AI products

• New products to increase market share (TAM) and revenue

• Acquisitions of existing products, driven by changing fundraising dynamics

Across these, we’re seeing similar patterns in the feedback from CS teams. What worked for the core product isn’t working to renew and expand the new products. And often this means running multiple CS teams or taking the hit on net/gross retention.

Customers buy outcomes, not products

We see common themes for failure:

• Sales & CS teams aren’t enabled on what good looks like in newer products, and the company’s DNA is based on the existing one, resulting in Sales teams over promising and CS teams under delivering

• New business personas in the customer have different expectations ranging what value means to them to how they want to speak to you

• Metrics of success for each product are completely different. But that’s hard to see for a single account because there’s already too many metrics to understand what success looks like.

• Multi-product and bigger accounts also mean your customers’ organisations are more complex meaning value means different things to different teams and regions. But this is very difficult to assess objectively and CS teams often get stuck with the loudest team or region.

Let’s take this back to basics. As many of us have learnt the hard way: customers are buying value, not products. So if they’re spending more on a new product, it means they’re expecting new value. Often with new teams, new business cases or business areas.

There’s one thing that is the common denominator across all of these points: data. With the right data shaped up in the right way, it’s much easier to objectively see what’s gone well and what hasn’t. And in the absence of it, it comes down to luck.

Our mission to fix this

When we started to see the increased new products and acquisitions in our own customers last year, we decided to act. Hook already provided our customers with an accurate revenue prediction that worked to predict renewals 6 months out — but now we needed to be able to do that at a product level to help identify which product might churn, and where upsell opportunities might lie.

We partnered with our flagship customer Salesloft when they acquired Drift. While merging the two businesses together, they were left solving an important problem: how do they get a single view of whether a customer is healthy? Through Hook Multi-Product, we gave them visibility and revenue predictions at both an individual product and rolling up to an account within weeks of their acquisition completing. We enabled them to run one consistent face off to their customers while knowing where to spend time to fix renewal risk and find new revenue opportunities.

“Hook has been an invaluable partner for Salesloft, developing customized health scores for each of our major product lines. This tailored approach enables us to accurately measure customer health in ways that reflect the unique usage patterns and qualities specific to each offering. As a result, we can proactively identify both renewal opportunities and churn risks, allowing our teams to take targeted action that drives customer success and business growth.”

Tracy Zinder, Snr Director of Revenue Operations at Salesloft

Launching Hook Multi-Product

I’m pleased to announce the General Launch of Hook Multi-Product — the industry’s only solution for predictive customer health across multiple products. With Hook Multi-Product, we help customers understand renewal and upsell likelihood down to the dollar at individual product level within every account — but also deeper within teams, organisations and parent accounts. Teams benefit from being able to very quickly know where problems are — and where upsell opportunities lie.

Talk to the Hook team today to find out more.