In your constant rush to grow MRR, decrease churn and increase customer satisfaction, you know you would do anything to keep your customers happy. And that includes giving them the features they want.
But how do you really prioritize feature requests?
Even if you feel like it’s a major chore, there is actually a sensible way to prioritize your features. This way will keep your customers happy, your development team sane and your budget healthy. Let’s dig in.
Why you need prioritization in the first place
As you work on a SaaS product, you have a general idea of how you want to roll out new product features and options. Usually, you have a timeline in mind, along with your resources (developers and the budget), you have a pretty good grasp on how things should go, in theory.
In practice, your customers might want a completely different set of features that you never even anticipated. They might like a certain aspect of your product so they want it perfected or your competition has a cool new feature you really should have. Now, instead of doing your planned features, you have to jump on the ones your customers want.
This is where prioritization comes into place. It allows you to choose the features which have the most impact on your business.
You could be spending $10k building a feature such as a call center integration, for example. While this is nice to have just to keep your customers happy, you want to invest that money in a feature that has the long-term potential to bring in more customers and increase revenue.
In other words, you choose your SaaS product features according to the value they bring.
Choose your most important business goal
Every SaaS business out there has the same major goals: increasing revenue and decreasing churn. While that’s all perfectly fine, there are smaller, more manageable goals, such as…
- Increasing your free trial to paid conversions
- Increasing product adoption
- Improving your customer lifetime value
- Attracting more customers for your highest-tiered plans
- Getting more upgrades from cheaper to pricier plans
If you’ve had your business for long enough, you’ll know your major pain points. Focus on the one that influences your business growth the most and you’ll know how to prioritize your features, as customer feedback rolls in.
If you’re just launching your SaaS, you’ll probably have a harder time figuring out your major business goals. At the same time, you shouldn’t be too concerned with feature prioritization either, as you should aim to solve someone’s problem with your product first.
Determine whose vote counts
Let’s take a look at two scenarios. In the first one, you have a customer who signed up for a free plan a month ago and they’re requiring you to introduce customer tags because that will make them sign up for a paid account.
An example of a SaaS pricing by PersistIQ
In the second scenario, you have a customer who’s on the enterprise plan, bringing in an average of $1,000 per month with a signed annual contract. They’ve also been with you for more than a year. They need a new integration with their favorite CRM.
Which feature will you prioritize and build first?
In this case, it will be the second one. Not every customer is the same and you should prioritize according to the person/entity requesting a feature. The more someone spends with you, the longer they’ve been with you, the bigger their network is… The more important their request should be.
In the end, you shouldn’t make these important decisions based on just a single request. Tools such as FeedBear allow you to collect votes for different requests from a variety of sources. That way, you can wait out as votes come in to decide on which path to take.
On top of that, you should consider something else that is crucial - focus on the type of customers you want more of. If you want more enterprise customers, listen to feature requests from other enterprise customers - simple as that.
As time goes by and you get more experience, you’ll realize two things: who your most important customers are and who sends in the best feature requests.
Last but not least, pay special attention to the requests coming in from your own team. Internal feedback is crucial because your own customer support team will have a firm grasp on the features that will make an impact on overall customer satisfaction.
Segmenting the data related to feature requests can be one of the most daunting parts of the entire feature request prioritization. However, no one but yourself can tell who the important customers are and which features are really meaningful for the future of your business.
Invest in a great feedback tool
Collecting, managing and using customer feedback can be a proper mess. Customer feedback comes in various forms but it’s all data. If you have thousands of customers, you can count on hundreds of new feature requests coming in every month.
A great feedback tool covers one major aspect of feature requests - the platform. If you don’t have one, customers will use whatever they can to send in their feature requests:
- Social media
- Your website live chat
- Phone/video calls
All of this information comes in from various sources and you’ll need to sort it in one place. If you have lots of feature requests, you’ll have to hire one person just to weed through this data.
Speaking from experience, a new SaaS business will have a handful of feature requests per month. The more customers you have, the more feature requests come flocking in.
As your business grows, the requests gradually increase as well. Unless, of course, you launch your product on a platform such as Appsumo, and you get bombarded with thousands of new feature requests per week.
Let’s say, hypothetically, that you manage to put all of this data in one place, e.g. an Excel sheet. You’ll have hundreds of lines with different data and sources and no way to interpret that data.
A great feedback tool such as FeedBear puts all of that data from different sources in one place and shows you actionable insights. No matter where your customers submit a feature request, it all lands in one central Feedback dashboard.
FeedBear then lets you filter through these feature requests, sort them, tag them, merge them and more. Most importantly, it lets you act on them immediately.
The alternative to using a customer feedback tool? Weeding through endless sheets, forms and emails. Instead, try out FeedBear’s free trial for 14 days! We guarantee you won’t go back to your old way of collecting feature requests.
And if you’re not convinced just yet, think of the ways you can use FeedBear to collaborate with customers. Instead of just letting them leave feedback, they can now engage in discussions about the features that matter to them.
What’s more, with FeedBear you can pool feedback from several different sources (email, live chat, in-app, etc.) all in one place instead of adding it manually in a single location.
Choose a prioritization model that fits you
When it’s all said and done, the app can only do a part of the job for you. It pools together the requests and feedback in one place and makes it easy (or easier, at least) to see what users really want. But the app doesn’t solve the hard part - actually deciding what to do and which path to take.
One model that is pretty popular and known to work is the RICE model. Used by Intercom, RICE makes you think of new features in terms of four different viewpoints:
Reach is the overall number of people who will see the effects of a feature that gets rolled out. For example, if only a certain portion of your users will benefit from a feature, its reach isn’t ideal.
Impact is exactly what it sounds like - the overall impact of a new feature on a single user. It’s ranked from 0-3.
Confidence is the most subjective field here - it literally entails how confident you are that a feature will make an impact, and on which percentage of your users.
Last but not least, Effort is how much you have to invest in terms of time and money to build a certain feature.
The total formula here is:
Reach x Impact x Confidence / Effort = RICE score
The benefit of this method is that it is quantifiable and forces you to weigh out different aspects of a new feature before even putting it into a formula. On the flip side, RICE doesn’t eliminate the problem of subjectivity, which is prominent in all models of feature prioritization.
As Adam Hempenstall of Better Proposals says, it's dangerous to base your priorities on one feature alone, so a mix of these four always makes for a smart business and product decision
Value vs. effort
This is yet another popular model for determining how to prioritize a feature request. Just as its name suggests, you take a look at the value a certain feature brings to your overall business and your users, weighing it out against the effort it takes to build it.
Value doesn’t entail just the cash that you’re bound to get. It also entails the impact it will have on your overall business, lifetime value, churn and other crucial metrics, as well as the benefits a user will get.
On the other hand, effort is how much time and money it takes to build a feature, as well as how complex it is to integrate it in the existing product.
When you think of it, the value vs. effort model is a simplified version of the RICE model. Its benefit is that it forces you to take a look at the whole spectrum of a feature’s implementation. However, a lot of it once again boils down to subjectivity.
To grade your feature on this scale, simply assign a value from 1-5 for value and the same for effort. If a new feature has a value of 1 and and an effort of 5, its total score will be a round 3.
Once again, it’s not ideal, but it helps you compare different features and see which ones to prioritize and build next.
Determine your budget
When it comes to the word “budget”, most people usually think of money. In a SaaS product team, you have to think of both the time and money needed to handle a certain feature request.
Whether you’re outsourcing your dev work to freelancers and developer teams or you have a team working in-house, you have to think of how you want to spend their time - which ultimately costs you money.
For example, adding a new color or a theme to your dashboard might cost you very little in terms of your developers’ time, but it also might not be too impactful for your customer lifetime value or decreasing churn.
On the other hand, a new integration with a project management tool might take months to build and develop, but it will also make a huge impact on new signups and retaining existing customers.
When you’re assigning new features to your development team, bear in mind that you also have to work on other technical aspects of your product, such as fixing existing bugs. With this in mind, you can only allot a certain portion of your resources to new features, so make sure to choose them well.
Implement and be accountable
Once you’ve chosen the right features you want to prioritize and build first, it’s time to get to work. As your developers and product team get to work, it’s time to let your customers know that you’re working on the very features that they requested from you.
First, it’s a good idea to build a product roadmap with your prioritized features for the future. This is essentially a board that lists the features you’re working on, along with the time when you expect to see them launched. Roadmaps are nothing new and many SaaS companies have launched their own to be transparent with their customers.
You can use a simple board tool like Trello to create a product roadmap or you can use FeedBear to get your feature requests made into a roadmap with just a few clicks. Customers who are just about to make a feature request can see that someone else already beat them to it and that you’re already working on it.
On top of that, maintain communication with the customers that requested the features you’re working on. Chances are, they bring value to your business so they should be in the loop that their request is important enough to have priority. Send them an email or some type of notification that you’re working on the very thing they requested.
Similarly, don’t leave customers hanging if their request isn’t on your to-do list. Let them know that you received their message and that you can’t work on their request at the moment.
Once your new feature goes live, you can do the standard feature release announcement and email, but also make sure to inform the individual customers that requested the feature. You’ll make them feel heard and appreciated and as a result, they’ll stay with you.
Keeping your roadmaps public is a discussion on its own, but it’s a good idea in general. You can gain new customers with your promises of features which are yet to come. At the same time, you risk those same customers pestering you to finish them as quickly as possible.
On the plus side, one amazing aspect of a product roadmap (such as one in FeedBear) is that customers can vote. When they see a feature they like in the roadmap, they can upvote it to let you know they’re a fan.
While this is not the most precise way of gauging which feature to build next, it’s a way to give voice to the silent customers who haven’t submitted a request of their own.
Prioritizing new features is one of the most important duties of a SaaS CEO, CTO, product manager, or some other executive. If done right, your prioritization will result in improved CAC, LTV, and churn rate. If done the wrong way, your churn will slowly catch up to your growth and cause you to lose money.
With this framework in mind, you are sure to prioritize the right features every time, no matter the size or niche of your SaaS application.