product-led growth

Use a SaaS product gap analysis to uncover opportunities in your product roadmap

Published February 28th, 2023

14 min read

Developing a product is hard. And, it's often executed through an idealistic lens. Because paradoxically, it’s not what you did include that matters most to a SaaS product, it’s what you didn’t include. It’s those areas that highlight a roadmap opportunity for new growth, deeper consumption, providing more value, or reducing churn. But, how do you identify those options? With a product gap analysis.

Di Mace

Marketing Communications Manager

Generally, product development gets off the ground by addressing an unfulfilled need. The need is either identified among your users, or it fills a gap within the competitor (peer) products in the market. Those unfulfilled needs, as well as emerging market opportunities are then converted into a myriad of requirements for new products or features – both functional and non-functional. Suddenly, your SaaS product roadmap is born.

However, as your product’s development lifecycle matures, you need tools to help you regularly review your existing features and identify new product roadmap opportunities. One tool is a SaaS product gap analysis.

Downsides of SaaS product management

Sadly, in the rush to grow, some SaaS companies lose sight of increasing their user value, satisfaction and consumption, and get sidetrack-stuck on a ‘feature treadmill’ of building ever more complex feature-rich products. Product managers need to constantly ask:

Is the investment made driving up adoption of the product/feature?
Does the new capability increase consumption of the product/feature?
Does the value that users expect match up to the value they’re getting?
Is the churn rate reducing, with the introduction of any particular new capabilities?

If you’re continually launching new features that are poorly adopted across your customer base, it could well be a sign that you’re either building:

Features they’re not ready for

Features customers don’t want

Features they don’t know how to consume

SaaS Product Managers must think deeply about future introductions, because the negative implications for the Saas model is obvious: if you don't build products and features your customers actually use, or use to their full extent, you won't get paid.

In short, your monetization efforts correlate to your ability to drive consumption and lift value through the capabilities you build. Let’s look at how a product gap analysis can help with this challenge.

TABLE OF CONTENTS

Downsides of SaaS product management

What is a gap analysis?

What types of product gap analysis are there?

Why do you need a SaaS product gap analysis?

What product gap analysis is used for SaaS product roadmapping?

What other types of SaaS product gap analysis can be helpful?

What is a SaaS consumption gap?

A SaaS consumption gap is when users don’t utilize the full capabilities of the product they paid for.

SaaS consumption gaps can be the result of:

Poor onboarding
Bad user experience
Lack of educational resources
Ineffective marketing efforts
Poor adoption of features

Two ways to identify a consumption gap:

Use product usage analytics to identify neglected product features.
Implement a voice of customer (VoC) program to uncover unsatisfied customer needs and wants and/or reasons for poor adoption and usage.

What is a gap analysis?

A gap analysis is a commonly used business planning tool that compares your current state to your desired future state. It produces a broad framework that defines where you are today, where you want to be, what you're going to do to get there and what customers are (and will) be delivered.

Also known as a ’needs assessment’ a gap analysis helps you determine the requirements to deliver a goal, as well as assessing whether it’s currently being met. There are many different forms of gap analysis, for different areas of an organization. Here are a few scenarios where a gap analysis can improve business performance:

Customer service gap analysis
Human resources gap analysis
Product usage gaps

Performance gap
Portfolio gap
Diversification gap

Generally, a business gap analysis is broken down into four steps.

Numerous resources, frameworks and tools are available to conduct the different types of business gap analysis, however detailing them and the steps undertaken, are beyond the scope of this article.

What types of product gap analysis are there?

A data-driven product gap analysis identifies where your product's performance falls short of (internal) targets or (external/user) expectations. It can highlight your product’s pain points and flaws as well as potential opportunities, and helps you build a product roadmap to better navigate the market and satisfy your users.

Because product gap analysis typically measures the differences between a customer’s expectations of a product and what's delivered, they can cover a few areas:

Product line and feature gap
Product distribution/availability gap
Product usage and consumption gap
Product value gap
Competitor gap

Each analysis uncovers different aspects of your product and when combined together, they create a detailed picture of the strengths, weakness, opportunities, and threats to the future of your product – similar to a SWOT analysis (which is one method used to perform a gap analysis).

Why is a product gap analysis important?

A product gap analysis is important because it helps your product team and management stakeholders to understand the difference between where your product is and where you want (or need) it to be. From the product gap analysis, strategies can then be developed and product/feature plans added to the product roadmap to close the gap and achieve your desired future state.

The benefits of conducting a product gap analysis can include:

Identifying areas for improvement

Setting product development priorities

Allocating engineering resources

Measuring progress

Achieving and improving customer success

Increasing customer usage and consumption goals

Improving win/loss ratios

Narrowing the value gap

What is a SaaS value gap?

A SaaS value gap occurs when there’s a disparity between what your customers expect and what your product offers: they expect one thing and experience another.

Symptoms of a value gap are:

Campaigns aren’t performing or are underperforming
Activation rate is falling
Conversion rates are low
Churn rate is high
Having problems growing the user base

Saas value gaps can be identified through:

Low trial conversion rate
Long time to value or ‘aha’ moment
Low activation rate
Low feature usage

Why do you need a SaaS product gap analysis?

Part of the reason for the intense competition within the SaaS market, is the desirability of its SaaS subscription model. And what's the growth potential if you're successful? According to Grandview Research, “The global SaaS market size was valued at USD 165.9 billion in 2021 and is anticipated to expand at a compound annual growth rate (CAGR) of 11.0% from 2022 to 2028.”

The subscription growth of every SaaS provider is dependent on providing consistent value to its users, and for users to continue to pay for that value. That’s why it pays to complete a product gap analysis – you need reliable information on whether your product experience is living up to expectations.

LEARN MORE

Want to explore our public product roadmap?

See more →

Who uses and who does a SaaS product gap analysis?

A SaaS product gap analysis is most commonly completed and used by a Product Manager, to aid them in building and updating the product roadmap. For example, you can use your product gap analysis to identify new and/or missing functionality (and whether the omission is accidental, deliberate, or otherwise).

Once the missing (or new) functionality is uncovered, the features are then researched and evaluated for inclusion in the development plan, and added to the product roadmap to ensure they aren’t buried or forgotten.

It should be noted this type of approach is a product-led strategic approach, where the product is placed at the center of the organization. Product-led go to market (GTM) organizations deliver a product which anticipates, and answers, the evolving needs of users, by delivering exceptional, customer-centric product experiences.

In a product-led GTM strategy the product is the experience.

Ideally, the experience is so strong and optimized that it converts and builds loyal advocates, minutes after usage commences, and is delivered on a consistent cadence to retain and expand their loyalty.

What product gap analysis is used for SaaS product roadmapping?

There are many options for you to gain valuable intel on whether your product is surviving, thriving, or dying. Most product professionals immediately think of features or functionality that are missing from a product, when they consider a product gap analysis. However, there are many other ways to have a gap in your product strategy. Here are a few examples.

In all cases, the analysis is conducted on the basis of where you are, where you want/could be and what you need to do to get to your desired future state.

1. Market viability and gap analysis

The name is self explanatory. This encompasses a regular overview of the market in which your SaaS product competes. For TinyMCE, it's the rich text editor market.

2. Use case/industry gap analysis

This gap analysis covers the industries where your SaaS product is utilized, as well as the key use cases who most value its features and capabilities. As the most trusted WYSIWYG component for rich text editing applications, TinyMCE has seven main use cases:

3. Competitor gap analysis and trend monitoring

For each SaaS product the list of competitors would vary, according to your current and future/desired state of operation. In the case of TinyMCE, this covers all rich text editors (out-of-the-box, framework, and headless), with particular attention paid to the ‘most compared’ editors.

TinyMCE also monitors other word processing tools and platforms, like MS Word and Google Docs, for features that need to be matched, as well as blue sky research into future and emerging trends.

4. User and developer feedback

In general terms, contributors to this gap analysis come from: NPS surveys (developers), key customer interviews (users and developers), interactions on Github and Stack Overflow (developers), voice of customer (VoC) surveys and in-app interactions (users) and well as broader developer community feedback and events.

5. Win-Loss analysis

A win-loss analysis is an increasingly popular reflective tool for product-led SaaS organizations. The analysis should be conducted regularly (eg. quarterly) to understand why prospective buyers did or didn’t purchase your product. Key areas to explore:

What was the final decision? Why?
Did the prospect perceive any product gaps?
What other factors (if any) influenced their decision?
Were they considering alternative solutions?
If lost, how can their business be won in the future?
Did the sales process influence the decision?
Was the technical expertise of the sales/technician influential in the buying decision?

TinyMCE conducts these analyses on a quarterly basis, and combines data and inputs from direct client interviews, surveys, sales analysis, and CRM data inputs. The results are widely circulated across key stakeholders (Product, Marketing, Sales, C-Suite) who use the information to monitor, manage, correct and anticipate patterns that emerge.

6. Feature gap analysis

Each product team has different dynamics, skills and zones of genius. But every product team should be the company’s sensei when it comes to product users and customers. They should have a deep understanding and empathy with who they are (ie. persona), their situation (ie. industry), the capabilities required (ie. use case), needs, wants and desires (ie. customizations).

Product managers should also be vocal about sharing with stakeholders: what customers and users require, as well as what's needed in the product and internal systems, to better serve them.

Methods and tools used by TinyMCE are:

Our Public Product Roadmap: we request and encourage feedback and suggestions
Direct contact with Roadmaps contributors: after suggestions are made, to further clarify ideas and advise when their ideas are implemented in the product
Key client interviews: to better understand where we can add value to their business, through new features and capabilities
Use case specific uses/customizations: understanding customizations that developers have made to our product and ways those can be added to the core editor and/or as premium features

LEARN MORE

Tell us what you’d love to see in TinyMCE rich text editor

Add your feedback to our roadmap →

What other types of SaaS product gap analysis can be helpful?

As SaaS product management continues to evolve, new areas emerge that can be helpful to undertake a gap analysis and monitor ongoing – all of which contribute to the growth of usage, consumption, adding value and lowering churn. Here are three types of gap analysis that are worthwhile additions to your SaaS product management tool kit:

1. Competitor SEO analysis

With so many competitors in the SaaS market, you need to know what your competition is doing, to stay on top. This SaaS gap analysis is an additional type of competitor review that focuses on SEO – looking for any gaps that can be identified that may work to your advantage.

A competitor SEO analysis highlights your own SEO strengths, weaknesses, opportunities, and threats (SWOT) as well as that of your competitors, by answering three key questions:

Which competitor is doing what?
How are they doing it?
Can it be done better?

Generally speaking, a SaaS SEO competitor analysis can uncover:

Ways you can outrank competitors on SERPs
Keyword search volumes to get insights into trends and demands
Keywords to target and rank for in Google
Competitor features that are ranking well (or not) and whether you can provide a superior feature/capability
Where to look for backlinks and off-page opportunities
Content marketing topics that can be better served and optimized
Flaws in your competitors’ website user experience (UX)
Monitor competitor social media posting and interactions

In short, a competitor gap analysis helps you understand the gaps in your competitors’ strategy and ways to improve your competitive advantage.

What are SEO and SERPs?

SEO (Search Engine Optimization) helps your prospective customers and users find you online.

The goal is to achieve a high ranking position (prime location) though your SEO efforts, and that location is on the SERPs, or Search Engine Results Pages.

2. Unuseful/misplaced features

Sometimes a negative product gap can be opened, through the creation of a feature that isn’t useful.

This type of product gap doesn't arise from failing to include an important feature, but instead from building unwanted features around a flagship piece of functionality. These are often a result of the earlier mentioned sidetrack-stuck on a ‘feature treadmill’ of constantly developing new features.

Despite their lack of use, these features wastefully retain engineering attention and resources (especially if they’re related/supportive of flagship capability), and they tend to be retained beyond their commercial usefulness (and financial viability).

Contrast these gaps with ones that are identified and open because an important feature wasn’t included, or a new need has emerged. Which is worth more effort, resources and financial investment?

3. Persona and use case miss-hits

Similarly, a negative gap can be created by mistakenly positioning your product for the wrong persona or use case. Generally speaking, these gaps open when the product team fails to dig deeply enough into a use case story or learn enough about the people they’re aiming to target and engage with, through the product or feature.

This can often be resolved and realigned, through more comprehensive research, customer interviews and building closer relationships with existing users.

4. Short-lived market obsession

Fairly obvious by its name, this is where a SaaS company creates a product gap when they mistakenly try to keep up with a hot topic. Frequently these types of development initiatives result in the accrual of technical debt, because the team has scrambled to build something that answers the question ‘Do you have that?’ and hacked the feature on as an afterthought, instead of building it into the core of the product.

Users easily spot these poorly thought through features.

Useful resources on SaaS feature analysis and product roadmapping

Many successful SaaS companies have already trodden the path of feature and product gap analysis for you. Learning from them and understanding that designing a new solution without understanding what is wrong with the current ones, is far from the best path to take. Here’s some great resources on the way other SaaS company have approached the problem:

Basecamp’s Shape Up

You’ve probably heard about Shape Up of Basecamp. It’s a great framework for growing startups, especially if you’re having difficulties in shipping valuable features and improvements for your customers.

Miro’s Product Alignment Document

Farbod Sarah’s introduction to product management in Miro is definitely worth the read. Despite their large size, all the Miro product teams are internally aligned and constantly sharing feedback, which has helped them deliver a product their users value.

Intercom’s Team Alignment Framework

As a content writer and marketer, I’m constantly amazed by Intercom's Product Blog. Unsurprisingly, their team alignment framework is also fabulous and easy to implement in a PM’s daily work.

Conducting regular, in-depth product gap analysis is a crucial tool in strategic product management. It helps to define the best candidates for new features, or new products to launch.

Ideally the analysis combines internal and external data, as well as direct and indirect feedback, surveys and interviews – to create a comprehensive depiction of your customer’s expectations and ways you can satisfy them with our product.

Besides, what better way is there to reduce churn?

author

Di Mace

Marketing Communications Manager

Messaging strategist and copywriter whose passion lies in working with brands like Tiny, that have deep-seated values and embrace the power of their story. She gets a kick out of solving problems, loves learning new things and making stuff, every day. When she’s not thinking through clever copy lines or clarifying value propositions, she’s knitting amazing socks for everyone she knows.