Over the past 20 years in B2B software, customer end-user concerns about software quality have seldom jeopardized a software company's ability to meet its revenue targets. This is because the people who decide to buy your software are usually not the ones who end up using it.
If the person who has the authority to renew the contract isn't affected by any problems with the software's quality or how easy it is to use, software companies haven't felt a strong need to fix these issues to achieve their yearly targets. If the buyer is satisfied, we consider the customer satisfied.
This distance between the user and the buyer in these customer organizations can shape the focus of software companies in many ways. Here are a few signals that your organization has felt safe to ignore concerns about the quality of your product experience without impacting your yearly targets:
Engineering teams often must balance resolving the following:
When planning for features, companies often prioritize creating new ones over improving or enhancing what was already built. Outside of feedback received from support tickets or NetPromoter Score surveys, many of these companies rarely invest in studying how easy or enjoyable their products are to use (usability research) or in designing them well.
Since they don't see a big risk of losing customers, they focus more on meeting sales targets rather than making sure end-users are happy enough for the buyer to renew. Instead, their strategy is to add more features to attract new customers by meeting the specific needs that those potential buyers have.
When it comes to product design, the focus is on making sure the product looks good at first glance. Since first impressions are formed very quickly, especially during sales demos, the product needs to visually impress potential buyers. If end-users find the product hard to use, it's not seen as a big problem by these companies now, because it doesn't directly affect new sales or keep existing customers from leaving.
Worries about how difficult a product is to use can be reduced by offering more support services. It’s common for companies to respond to concerns that their product is hard to use by arguing that the users just need more training. So, when complaints from end-users do reach the person who decides whether to renew their contract with you, it creates a chance for you to sell them a higher level of support.
This approach turns a bad user experience into an opportunity to make more money in the short term. And fixing the underlying problems with the product would mean losing the chance to sell these additional support services. If these revenue opportunities are tied to yearly targets, the organization is incentivized not to address quality issues.
Creating a successful product relies on balancing three important factors: what's good for the business, what can be built within the opportunity window, and what users want. Each of these areas has its own set of strategies, skills, and processes. In B2B software companies, regardless of what the users want, what ends up being built is often determined by what the buyer requests, not by observing the actual users' behavior and assessing their needs. Since the sales team interacts most with the buyer, their requests are passed on to the product team. This approach reduces the emphasis on studying how users interact with the product or focusing on improving the user experience.
If a company's strategy is simply to add new features based on what buyers say they need, it might make sense for them to have one person in charge of both product direction and technology, directly under the CEO. This can work well for a while, especially if the company is making good money from its customers and has a strong sales team. Having one executive overseeing product and technology decisions can seem to have little downside in the short term.
The signals above are just a few lagging indicators that your company is in an exceptional position to advance your growth objectives without experiencing any near-term impact that software quality has on your retention targets. But what happens when things start to change; when there’s a downturn in your customer market, when there’s new fast-moving competition, or when end-users start abandoning your software in favor of your competitors’ freemium solutions? In these scenarios, the quality of how users experience the product begins to directly affect whether customers renew or leave, and the operations and decisions that had more exclusively served your growth objectives suddenly need to shift or adapt to account for the recurring losses you may now be experiencing in your net revenue retention.
In the next part of this series, we'll share examples of how companies respond to these new conditions and the ways they might shift operations and incentives to improve the quality of their software.
