Product Life Cycle: Everything You Need to Know about Stages and Success Strategies
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If you are here, you’re probably seeking to build a digital project. Just like human beings, all products undergo phases of development and growth. A profound understanding and knowledge of the product life cycle and its stages, help you to act in the right direction to prolong the lifetime of your SaaS.
Eleken is a product design company, with the end users being the most significant element of our process. Setting up a SaaS business is not only about designing the project. The truth about growth and longevity is that your product needs to meet its customers’ requirements. Throughout all these phases, it’s the user who defines whether your SaaS lives or dies.
In this article, we will look closely at the stages of the product lifespan to support you with figuring out how to develop your SaaS.
4 main stages of the product life cycle
All in all, there are 4 main phases of the SaaS lifetime:
Let’s look at the curve of the product life cycle with all phases included:
The research & development stage precedes all the other phases and is all about research and testing product prototypes. This is usually an indefinite phase dedicated to learning more about the requirements of your target customers. By studying the issues your potential users deal with, you can think of the ways to satisfy their requests and create SaaS.
If your project is brand new, the research & development stage can continue even for some years. During this time, you can look for investors, plan the launch of the product, and finalize the arrangements to take your startup off the ground. Such preparations may include building a website, creating a business plan, and exploring your customer base.
One of the biggest obstacles at this time is the absence of revenue. In most cases, all of your finances are used for market analysis and project development as you need to lay the foundations for your SaaS introduction.
Introduction stage
The keypoints:
During the first stage, the product debuts in the market, so you have to introduce it properly. The task here is to spread the word about your service. Because nobody knows much about your SaaS yet, you should provide as much information as possible. You should plan your go-to-market strategy way in advance.
A common way to do this is to start talking about your project a few months before it is actually released. On the one hand, you are slowly introducing your product to people. On the other hand, as they are learning your SaaS step by step, they can decide if they need it once it shows up on the market.
Reform, a powerful data preparation solution built by SlamData is one example of a SaaS product in the introduction stage that we assisted with design (check our case study here). There were no analogs to this service on the market, so our client came up with a plain message to their users: a tool that turns your data into analytics-ready tables in minutes.
Reviews and feedback are crucial at this point. With users’ comments and opinions regarding improvements and changes, you will know what modifications are required and what customers want to see in the product shortly.
You can even ask your friends or experienced people from the same sphere to review your project. They may advise what to improve, add, or even exclude from it. Honest reviews are the most valuable ones, even though they are not always positive.
An additional boost in the introduction stage is an investment in marketing and advertising to draw attention to your SaaS. Thus, you will stimulate demand, which, in its turn, should hike both your product’s popularity and sales. Nevertheless, be prepared that there can be no revenue, as the users are still getting familiar with your service. Good customer acquisition strategy is a key to business growth up till the next stage.
Growth stage
The keypoints:
In the growth stage of the SaaS lifetime, customers already know about your product and invest money in it actively. As a result, sales are constantly increasing, which creates stable revenue.
Let's look at the project in its growth stage to understand how the target audience shapes your actions and development methods. We have chosen Dropbox that wasn’t a unique product initially. Indeed, there were plenty of cloud storage services on the market. Dropbox intended to be a first storage service that would be simple to use.
By introducing its services for Linux users years ago, Dropbox managed to enter a whole new market segment. Additionally, this software is famous for its referral programs. With more new customers you invite to Dropbox, your free storage is getting bigger. This strategy has been effective for a few years already and constantly adds to the number of users.
Another essential quality of the growth stage is a market expansion which is caused by project development. When new SaaS enter the market and enjoy their popularity, there appear more competitors. But what to do if the competition is too harsh and your product remains unnoticed?
Don’t forget about the marketing aspect, so that advertising works in your favor. With SaaS, you can consider such ways of promotion as social media platforms or cooperation with bigger companies or even influencers. At the same time, you may check various distribution channels to enlarge the number of potential customers.
Maturity stage
The keypoints:
Once you get to the maturity phase of the product lifespan, be prepared for market saturation. Sales are dropping or slowing down while advertising is not so easy and fruitful. This happens because many users have already purchased your SaaS.
Marketing should focus on differentiation. In comparison to similar projects, your SaaS should have serious benefits to stand out. In this stage, the stabilization of market share and keeping customers are your major goals. Then, you can restart the life cycle of the product to avoid falling into the decline stage.
You should analyze your SaaS and the requests of the target audience once again, as they could have changed since the launch. This phase is a high time to launch new features and reach out to all market segments. Remember that with time, the technological sphere is only advancing and your product has to keep up with all the changes.
Before working with Eleken, TextMagic was a messaging service helping small businesses with marketing. However, being in the maturity stage, they decided to add more functionality to their product. In such a way, TextMagic skyrocketed the number of users and remained active on the market (more information in our case study).
As mentioned before, effective marketing and advertising always come in handy. However, there are times when you should do more. One more trick here would be implementing success strategies to keep your SaaS profitable and we will get back to these a little bit later.
Decline stage
The keypoints:
Although the maturity stage can last for decades, each project will eventually reach its final stage, also known as the decline. During this time, both sales and market share are gradually dropping, which is caused by a slowly decreasing demand.
Because of the over-saturated market, there are almost no potential new users. Consequently, your advertising is targeted mostly at proven loyal customers with prices being reduced for them. In such a stage, it is advisable to redesign and redevelop SaaS to create demand again.
A fine example of a project in its decline stage is Kodak. This company is worldwide known for its photography products. It was rather successful in the early 21st century. However, Kodak failed to shift to digital photography and went bankrupt. Probably, if they could foresee and adapt to the change in their users’ requirements, they would remain in the market.
Success strategies to prolong your product’s longevity
Apart from conventional tips to profit from each stage of the SaaS lifespan, you can also implement success strategies. However, make sure to double-check if they will work best for a certain stage of the product lifetime. Let’s look at these methods down here:
Adding value
This strategy often works magic, especially with SaaS. There is always something that can be added or improved in software so that it becomes even better. Sometimes, it is just a modern UI/UX design but sometimes, it can be an essential feature that users have been begging for forever.
Exploration of new markets
This strategy can be beneficial in each phase of the product life cycle. Without careful consideration of users’ needs and planning of your next steps, it is impossible to build a profitable SaaS or any other project. That is why the opportunities that come with new markets can always make a deal and attract an even bigger pool of potential customers.
New packaging
This approach is effortless to imagine when you are selling actual goods and products. Nothing surprising here, but works wonders in most spheres. But what about software? Introducing a SaaS version is very likely to make it even more attractive to targeted users.
In terms of SaaS, this strategy is about design and the very service. You can optimize and update the website, features, and anything else that comes to your mind. Probably, there was something that users wanted to see in your product, even if it’s such a small thing as an additional button or a completely new layout of the site.
Price reduction
Possibly the least harmful approach, it will help to keep your project afloat at any point in the product lifespan. By implementing a price reduction strategy, you can both resist your competitors and demonstrate that your project is valuable but not overpriced.
To sum up
Whether you are only developing your digital product or already at some stage of the SaaS lifetime, you should constantly monitor the needs of your end users. Their requirements are your top priority to figure out how the market works and build a successful project.
If you want to learn more about specifics of marketing at the different stages, read our article about product life cycle strategies.
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Product Life Cycle: Everything You Need to Know about Stages and Success Strategies
If you are here, you’re probably seeking to build a digital project. Just like human beings, all products undergo phases of development and growth. A profound understanding and knowledge of the product life cycle and its stages, help you to act in the right direction to prolong the lifetime of your SaaS.
Eleken is a product design company, with the end users being the most significant element of our process. Setting up a SaaS business is not only about designing the project. The truth about growth and longevity is that your product needs to meet its customers’ requirements. Throughout all these phases, it’s the user who defines whether your SaaS lives or dies.
In this article, we will look closely at the stages of the product lifespan to support you with figuring out how to develop your SaaS.
4 main stages of the product life cycle
All in all, there are 4 main phases of the SaaS lifetime:
Let’s look at the curve of the product life cycle with all phases included:
The research & development stage precedes all the other phases and is all about research and testing product prototypes. This is usually an indefinite phase dedicated to learning more about the requirements of your target customers. By studying the issues your potential users deal with, you can think of the ways to satisfy their requests and create SaaS.
If your project is brand new, the research & development stage can continue even for some years. During this time, you can look for investors, plan the launch of the product, and finalize the arrangements to take your startup off the ground. Such preparations may include building a website, creating a business plan, and exploring your customer base.
One of the biggest obstacles at this time is the absence of revenue. In most cases, all of your finances are used for market analysis and project development as you need to lay the foundations for your SaaS introduction.
Introduction stage
The keypoints:
During the first stage, the product debuts in the market, so you have to introduce it properly. The task here is to spread the word about your service. Because nobody knows much about your SaaS yet, you should provide as much information as possible. You should plan your go-to-market strategy way in advance.
A common way to do this is to start talking about your project a few months before it is actually released. On the one hand, you are slowly introducing your product to people. On the other hand, as they are learning your SaaS step by step, they can decide if they need it once it shows up on the market.
Reform, a powerful data preparation solution built by SlamData is one example of a SaaS product in the introduction stage that we assisted with design (check our case study here). There were no analogs to this service on the market, so our client came up with a plain message to their users: a tool that turns your data into analytics-ready tables in minutes.
Reviews and feedback are crucial at this point. With users’ comments and opinions regarding improvements and changes, you will know what modifications are required and what customers want to see in the product shortly.
You can even ask your friends or experienced people from the same sphere to review your project. They may advise what to improve, add, or even exclude from it. Honest reviews are the most valuable ones, even though they are not always positive.
An additional boost in the introduction stage is an investment in marketing and advertising to draw attention to your SaaS. Thus, you will stimulate demand, which, in its turn, should hike both your product’s popularity and sales. Nevertheless, be prepared that there can be no revenue, as the users are still getting familiar with your service. Good customer acquisition strategy is a key to business growth up till the next stage.
Growth stage
The keypoints:
In the growth stage of the SaaS lifetime, customers already know about your product and invest money in it actively. As a result, sales are constantly increasing, which creates stable revenue.
Let's look at the project in its growth stage to understand how the target audience shapes your actions and development methods. We have chosen Dropbox that wasn’t a unique product initially. Indeed, there were plenty of cloud storage services on the market. Dropbox intended to be a first storage service that would be simple to use.
By introducing its services for Linux users years ago, Dropbox managed to enter a whole new market segment. Additionally, this software is famous for its referral programs. With more new customers you invite to Dropbox, your free storage is getting bigger. This strategy has been effective for a few years already and constantly adds to the number of users.
Another essential quality of the growth stage is a market expansion which is caused by project development. When new SaaS enter the market and enjoy their popularity, there appear more competitors. But what to do if the competition is too harsh and your product remains unnoticed?
Don’t forget about the marketing aspect, so that advertising works in your favor. With SaaS, you can consider such ways of promotion as social media platforms or cooperation with bigger companies or even influencers. At the same time, you may check various distribution channels to enlarge the number of potential customers.
Maturity stage
The keypoints:
Once you get to the maturity phase of the product lifespan, be prepared for market saturation. Sales are dropping or slowing down while advertising is not so easy and fruitful. This happens because many users have already purchased your SaaS.
Marketing should focus on differentiation. In comparison to similar projects, your SaaS should have serious benefits to stand out. In this stage, the stabilization of market share and keeping customers are your major goals. Then, you can restart the life cycle of the product to avoid falling into the decline stage.
You should analyze your SaaS and the requests of the target audience once again, as they could have changed since the launch. This phase is a high time to launch new features and reach out to all market segments. Remember that with time, the technological sphere is only advancing and your product has to keep up with all the changes.
Before working with Eleken, TextMagic was a messaging service helping small businesses with marketing. However, being in the maturity stage, they decided to add more functionality to their product. In such a way, TextMagic skyrocketed the number of users and remained active on the market (more information in our case study).
As mentioned before, effective marketing and advertising always come in handy. However, there are times when you should do more. One more trick here would be implementing success strategies to keep your SaaS profitable and we will get back to these a little bit later.
Decline stage
The keypoints:
Although the maturity stage can last for decades, each project will eventually reach its final stage, also known as the decline. During this time, both sales and market share are gradually dropping, which is caused by a slowly decreasing demand.
Because of the over-saturated market, there are almost no potential new users. Consequently, your advertising is targeted mostly at proven loyal customers with prices being reduced for them. In such a stage, it is advisable to redesign and redevelop SaaS to create demand again.
A fine example of a project in its decline stage is Kodak. This company is worldwide known for its photography products. It was rather successful in the early 21st century. However, Kodak failed to shift to digital photography and went bankrupt. Probably, if they could foresee and adapt to the change in their users’ requirements, they would remain in the market.
Success strategies to prolong your product’s longevity
Apart from conventional tips to profit from each stage of the SaaS lifespan, you can also implement success strategies. However, make sure to double-check if they will work best for a certain stage of the product lifetime. Let’s look at these methods down here:
Adding value
This strategy often works magic, especially with SaaS. There is always something that can be added or improved in software so that it becomes even better. Sometimes, it is just a modern UI/UX design but sometimes, it can be an essential feature that users have been begging for forever.
Exploration of new markets
This strategy can be beneficial in each phase of the product life cycle. Without careful consideration of users’ needs and planning of your next steps, it is impossible to build a profitable SaaS or any other project. That is why the opportunities that come with new markets can always make a deal and attract an even bigger pool of potential customers.
New packaging
This approach is effortless to imagine when you are selling actual goods and products. Nothing surprising here, but works wonders in most spheres. But what about software? Introducing a SaaS version is very likely to make it even more attractive to targeted users.
In terms of SaaS, this strategy is about design and the very service. You can optimize and update the website, features, and anything else that comes to your mind. Probably, there was something that users wanted to see in your product, even if it’s such a small thing as an additional button or a completely new layout of the site.
Price reduction
Possibly the least harmful approach, it will help to keep your project afloat at any point in the product lifespan. By implementing a price reduction strategy, you can both resist your competitors and demonstrate that your project is valuable but not overpriced.
To sum up
Whether you are only developing your digital product or already at some stage of the SaaS lifetime, you should constantly monitor the needs of your end users. Their requirements are your top priority to figure out how the market works and build a successful project.
If you want to learn more about specifics of marketing at the different stages, read our article about product life cycle strategies.
What is SaaS? Explanation, Benefits, and Examples
At the beginning of 2021, we can definitely state that SaaS is literally everywhere. From large organizations like Google, Microsoft, or Adobe Systems, to small apps that offer data cleanup or financial calculations, almost every type of software we use daily is SaaS.
So, what is SaaS and why is the SaaS business market growing so rapidly?
SaaS is Software as a Service. The emphasis is on "service" — is not a one-and-done transaction, it’s an ongoing experience that gives the clients continual value. User experience is how the value is delivered in SaaS applications. When you look at UX design this way, it becomes clear why UX is one of the most important elements of SaaS.
When SaaS emerged on the market, they quickly started replacing old-school software on a disk. This is because they offered a much better experience by providing both a better value and more convenient user interfaces. The software companies that are still building desktop-oriented applications, typically offer a poor user experience, especially on mobile devices. In 2021, when best-in-class user experiences can be downloaded in the App Store for free, people don’t just want the software they use at work to have great UX, they’ve come to expect and demand it.
It's not that SaaS, in comparison to desktop-oriented applications, offers better UX by definition. For example, most SaaS companies in the space of sales and marketing usually start small and grow very complex as they add up new features and additional products.
When we were working on designing TextMagic, a SaaS product in the sales and marketing space, complexity was the main problem we wanted to avoid. To reduce the complexity we combined marketing campaigns, CRM, and help desk functionality on one platform (check out our case study).
This way with the help of design we made the product simple and pleasant to use and as we already know a great user experience is a key to SaaS success.
With so many SaaS applications that surround us, this business model has become the most popular and profitable for software entrepreneurs.
In this article, we are going to figure out what software as a service is, why this business model has become so popular, and how it manages to provide a better user experience in comparison with stand-alone desktop software. As well, we will go through some popular examples of SaaS products to explain to you everything about this type of product.
Basic information about SaaS
SaaS (Software as a Service) is a method of software delivery with the help of which people can access the data over the internet. Cloud applications run on the server of the SaaS provider, and users can access them with their browser from any place and any device.
The user does not buy an application, but rents it - customers pay for a subscription on the regular basis as long as they need it.
The SaaS vendor takes care of the application's performance, provides technical support, and independently installs updates. Thus, the customer doesn't have to worry about technical issues and can focus more on their business goals.
How does it work?
Installing the traditional, desktop-oriented software requires a physical disk and a tedious installation process. Software as a service is hosted in the cloud and in most cases does not require installation.
Instead, a person visits the software's website and register for an account using only their email address, create a password, and here we go! After registration, they can log in and have access to all the tools and features the software offers anytime and anywhere only via the Internet.
Benefits of SaaS
Software as a service model is beneficial both for those who develop the software and those who use it.
The software as a service is beneficial due to the fact that it:
- generates recurring revenue for businesses (provides relatively stable income because of a subscription-based model)
- is affordable for users
- is cost-effective for businesses (no need to spend on hardware maintenance)
- gives a possibility to scale easily (when the business grows and the requirements increase the client can quickly and easily upgrade the subscription. And vice versa, they can downgrade the plan when needed.
- makes it easier to attract new customers (again because of the low initial cost and the possibility to have a trial period)
- let users receive updates and new features without buying a new product
- provides great user experience (SaaS applications offer simple and hassle-free experiences across all devices).
To better understand what the software as a service is, let's take a look at some popular SaaS companies and their products. We are sure you've used at least one of them.
Examples of popular SaaS products that you've definitely heard about
Even if you don't know much about the software as a service industry, it doesn't mean you've never used SaaS products before. There is no need to be an expert in SaaS to understand how tightly it is connected with people’s everyday routine. Just check these examples of well-known cloud-based software to get a better understanding of this business model.
Dropbox
Dropbox is a leader in cloud storage services. It allows us to store the information, share data, and in general collaborate easily.
Dropbox gained its popularity because of the ease of use and availability across different platforms and devices. Its UX is equally coherent on desktops and smartphones, Windows or IOS.
Google Workspace
Google workspace (former G Suit) offers a range of tools to optimize the working process. It includes custom business email (Gmail), cloud storage (Drive), word processing (Docs), spreadsheets (Sheets), survey builder (Forms), and much more.
Delivering this software using the SaaS model allows few people to work with the same document simultaneously, see all changes, comment on everything, and not be afraid of forgetting to save the changes. Organizing video meetings with the use of Google Drive has made the working process easier as well. Of course, it is worth mentioning Gmail here. Its clean UI and intuitive navigation have made Gmail the main way of sharing mail in most modern companies.
Office 365
Even large corporations move to SaaS. One such example is Office 365 by Microsoft. Well-known services like Word, Excel, PowerPoint, etc. without which any enterprise couldn't imagine its work ten years ago are now available on a SaaS subscription basis and can be accessed from everywhere via the Internet. You don't need to buy a license and spend time installing a number of applications on your desktop.
Shopify
Shopify is an e-commerce software as a service platform that allows users to start their business online and offer tools for marketing and SEO optimization. And again this cloud-based software has gained popularity because of the clear UI and intuitive user experience.
Slack
Slack is a cloud solution for business communication. This messenger allows you to create channels on different topics, have direct private conversations, share files, and comment on them.
Slack's design is one of the main reasons it became so successful. From the onboarding process to presenting updates, everything in this app is extremely easy-to-understand. This messenger provides the best possible user experience and customers value it.
Zoom
With the beginning of the COVID-19 pandemic in 2019, there is hardly any person that has never heard about Zoom. This service for video communication gives an opportunity to conduct video meetings, conferences, hold webinars, and chat only having a browser and an Internet connection.
Many people wonder, how Zoom managed to become so popular in such a short period. Previously Skype was the number one software for video communication, but because of its clunky and hard to use UX, it is no more a competitor for cloud-based Zoom with an intuitive and user-friendly design.
Read more about popular SaaS companies and their products in Best SaaS Companies and Secrets of Their Success.
All of the above companies that choose the SaaS model to deliver their software have become popular among customers as they provide the best user experience on the market and their products are known for their simplicity and ease of use. But why SaaS products manage to provide a better experience to their customers than on-premises software?
SaaS vs stand-alone desktop software
The main objective of providing service with a SaaS business model is to make the interaction with the product more efficient, user experience better and as a result the customer happier. Usually, the client is not interested if the data is stored locally or on the cloud, all they want is to receive an outstanding user experience and get their problem solved.
But why are SaaS applications better at delivering a great customer experience than standalone desktop software?
Lower spendings
While on-premise software is installed locally (on the company's computer) the SaaS is hosted on the vendor’s server and enterprises don't have to worry about maintenance and managing everything themselves. This fact allows organizations that use SaaS to decrease spendings on software updates, support, and implementation and lets them focus more on and improving their services and UX.
Size and functionality
In the past, most software products used to be large, complex, expensive and offered a wide range of functions in one app. When software includes so many features in one product, it becomes extremely difficult to keep the design clean and clear. As the result the customer experience becomes poor.
In their turn, SaaS products are usually simpler as they solve some specific user problems (they are more focused on a particular niche). It allows them to have a better design with intuitive and user-friendly interfaces.
Ongoing development
Unlike the on-premises software SaaS doesn't have a "final version" - the product is constantly evolving and tested, companies regularly add new features and improve the design of their apps. SaaS business model makes it possible for users not to constantly pay for new versions, download separate products, or new additions on the desktop. With cloud-based applications, customers get all the updates on the go, unlike with the stand-alone desktop software.
Mobile experience
More than 90 percent of the overall Internet users access the web with their mobile devices at least once in a while. That's why it's natural that in our mobile-driven world an application should give real-time access to platforms and data from different devices regardless of the location.
Unlike traditional desktop-oriented software that is available on computers only, SaaS technology allows connecting from any gadget that has an internet connection. It promotes providing a coherent user experience both on desktops, smartphones, or tablets, different operating systems, and browsers.
So, because of cost-effectiveness, narrow focus, and constant development SaaS companies can pay more attention to the customer-centered design of their applications.
What waits for SaaS in the future?
Software as a service has merged into our lives and has no intention to leave the market. Companies and ordinary people use SaaS applications daily as they offer continual value and user-friendly interfaces. Its accessibility, affordability, and ease of use explain the rising popularity of SaaS. Anyone who has a computer and a browser can try it out and see the difference a SaaS has made.
SaaS is constantly developing and today it has become the most profitable business model that offers its customers an outstanding user experience.
With the development of new technologies, the SaaS will evolve as well. Some people say that mobile-optimization will be the number one priority of cloud-based software applications, others think that SaaS will focus on developing software for artificial intelligence.
No matter, what future is waiting for software as a service model, as more companies are moving to the cloud the list of unique SaaS solutions continues to rise. Businesses continue to search for specialists able to analyze and design practical and effective cloud-based software that meet both the needs of the market and their business needs.
Great design is more important than ever in SaaS success. But what makes a good SaaS product? Find out in our next blog post!
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