End-User Era

What Is the End-User Era?

The end-user era refers to a new trend in how businesses buy software. The decisions about which enterprise applications to purchase are shifting from company executives. Instead, it’s the employees who will use these software tools to do their jobs. In the end-user era, both software makers and the businesses that buy from them are changing the way they operate based on this new reality.

How Product-Led Growth Relates to the End-User Era

Many software companies are adapting to the end-user era. Many are changing from a revenue-driven model to a strategy of product-led growth. With this strategy, the product itself becomes the company’s primary tool for attracting users. This is because one proven way to lure new customers is to allow people to sample your product for free. Businesses that use the product-led growth model make their products available to the public without charge.
In some cases, a product-led growth company offers a limited-time free trial of its application. Then it charges for continued use after the trial ends. Other companies make a basic version of their app free forever but charge users to upgrade to a version that offers more advanced functionality.
The philosophy behind product-led growth goes as follows: Let the public find our product, use it free, and get comfortable with it (and maybe even dependent on it). When the free-trial period ends, they’ll be willing to pay to continue using it.
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Product-Led Growth Model

One way to understand the end-user era is that it represents the flipside of the product-led growth model. Many software companies today recognize that it will be the employees at their customers’ organizations who decide which software tools the company buys.
These software makers are not guessing about this. There is data to support the theory. Employees are gaining decision-making power over the company’s software purchases. A 2019 research report from Gartner estimates that by 2023, 40% of professional workers will decide which business applications their companies buy. They decided what tool will to enable them to do their work. Compared to bosses or department execs making the choice for them.
Knowing this, app makers that take the product-led growth approach are refocusing their efforts. Thus they are moving away from large sales teams that target the C-level executives at their customer companies. Instead, they’re redeploying those resources toward building a world-class product.
These app makers reason that their software needs to be outstanding and easy. Especially if they hope to lure the employees at their enterprise prospect companies to start using it in their day-to-day work. Only after a company’s employees have gotten comfortable with a piece of productivity software will the makers of that software have a chance of that enterprise buying licenses to its product.

How to Build a SaaS Product in the End-User Era

Given the important role that employees within your customer’s company are playing in choosing which software to buy, here are a few best practices when building a B2B SaaS application that will attract those employees:

1. Make it free.

In the end-user era, your enterprise customers’ employees will be the ones advocating for your SaaS apps within their organizations. But many of those employees will have no company approval to purchase software, or anything else, directly. If you hope to enlist their help in championing your product over others, you’ll need to let them experience the product for free.

This could mean making a basic version available for free indefinitely and charging for more advanced features. Think of Slack. That company makes a bare-bones version of its digital-workspace platform free.

But if an enterprise wants to add more instant-messaging capacity, or add more sophisticated video calling capability, the company will need to upgrade to a paid version of Slack.

2. Build a network effect in the product.

The network effect describes a product that becomes more valuable to its user base as it gains more users. Facebook is a good example. When Facebook had 100,000 users in its early days, the typical person wouldn’t have found much value in it. The chances were low that the person would’ve known anyone else on Facebook. But when Facebook reached 100,000,000 users, it became more interesting to the typical person.

Slack also offers a good example of this best practice. The more of a company’s employees sign up for a Slack account and use the platform on a regular basis, the more useful Slack becomes to each of those employees.

If you’re going to build a SaaS product with the end-user era in mind, you’ll want to make it appealing for one employee at your prospect’s company to encourage their colleagues to use it as well.

Eventually, the user count in that organization will reach a critical mass—and many employees will be asking their executives to buy your upgraded “professional” or “enterprise” packages.

3. Solve the end user’s problem.

A SaaS product team that hopes to capitalize on the end-user era needs to build its product with the end user’s pain in mind. This might sound obvious, but many enterprise software makers instead focus on developing products that solve problems for the buyer persona—such as the company’s CIO or a department vice president.

To succeed in the end-user era, a B2B SaaS company should focus the majority of its efforts on trying to solve the end user’s problem. That means, first, learning about those employees’ challenges, concerns, needs, and goals. It also means designing a software product that zeroes in on solving one big challenge or helping the employee achieve a single key objective.

Employees don’t start using a B2B app because it does a lot of things fairly well. They sign up to use a business app only if it does at least one thing—something they need—extremely well.

 Related Terms:

user experience, user research, customer empathy, customer acquisition cost (CAC), lifetime value (LTV)

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