How to fix the “VALUE GAP”: The main reason behind why most of the SaaS companies fail!

  • 17 January 2022
  • 3 replies

Userlevel 4

Value gap: The difference between expectations and reality. And in this post , we will cover the fix to this problem


Once, a starving man was walking on the street, and he saw a “Vada” (Indian version of Donuts) stall on the roadside. He approached the stall owner and asked, “Can this vada satisfy my hunger? And what are the charges for it?”. Vada vendor replied, “Yes for sure,” and quoted the rate 2 dollars.


The hungry man ate one vada. He is still hungry. He ate the 2nd, 3rd, 4th likewise, after having 7th vada, he felt full and satisfied. He handed a 2 dollars to the stall owner. The owner got surprised to get 2 dollars in return for seven vadas. He asked for 12 dollars more, and the hungry man replied, “I had asked you whether your vada will satisfy my hunger, and to that, you said yes. When I ate the first six vadas, I was still hungry. Only the 7th vada of yours was able to help my craving. That’s why I need to pay you only 2 dollars for that 7th vada. 


The subscription business is all dependent on this same logic. Companies would tend to renew as long as their needs are satisfied for the amount they pay. The more the value derived,  the higher the customer lifetime. The faster it is, the higher the retention. 9xCpQnvKUPnK5z1NQv9gC8-_zTw8suoGrFMFmBjZuZkD9KhWoj8jMhVFacBxE8ujSHwXEoQuBEYAtb_7lJsKROQEQmSFqRdQ0jIOusl7uD0xi9WaIx_b3ItLp_-McfLLyQxUP6Xa


Learning from the story: (The SaaS version)


Here, the hungry man is like any SaaS customer, who has certain expectations before buying. The customer is not purchasing the product but the value he derives from it. 


Today 9 out of 10 SaaS companies fail only because of the value gap in the initial stages of user onboarding. It is the seamless experience that makes them stay. There is a considerable difference between the customer expectations and what most SaaS companies deliver post onboarding - and this difference is known as the “Value gap” - the heavy, leaky bucket!


Intentionally no business would like to let their customers down. Every customer is different, and the gap coefficient varies for each one of them. Their goals are different, hence their expectations. It is pretty hard to satisfy each one of them. 


But, it’s not entirely impossible either - to make the minimum setup available so that they discover value by following your instructions. 


Here instructions are as simple as guided tours. With the adoption champions like Gainsight PX, this is so simple. But it doesn’t end there. A random single feature walkthrough on the home page will not drive customers towards their aha moments. Especially when products are built to solve multiple business use cases for a diverse customer base, it’s highly impossible to figure out what interactions might lead to customer satisfaction.


Solution - Onboarding checklist to set the right expectations:

  • Give the customers everything they ever need to understand the product as a checklist. (Guided tours for all critical workflows of the product)

  • Provide additional resources like blogs, articles, documentation, and links to understand the concepts better.

  • Enable “Search” to find them on the go.

  • Facilitate feedback at the fingertips of the customer.

  • Channel the feedback to specific teams to resolve the issues as per the SLA commitments.


Hehe… this sounds like our KC BOT!


Yes, it is!! 


Knowledge Center Bot is solely responsible for everything that’s being quoted above. There are numerous ways to leverage a KC bot for their business, primarily to set the right expectations and decrease the time to value by providing a checklist of important product use cases.



How Value Gap is addressed by KC BOT:


  1. Identify the aha-moments for each customer persona. Prioritize the top 5 events/features that reveal those aha-moments. 

  2. Create guided tours for each feature reveal.

  3. Create best practices and help documentation regarding the feature and value it drives within the KC bot. This can be done using the “Article” option in the KC bot configuration editor section. (No linking to external sources - thus no drop-offs while using the product.)

  4. Add tags to the documentation and other content, generating search results for a particular tag term.

  5. Set the dynamic support system, and map the type of feedback to different teams to route the user feedback to the appropriate action takers. ( We covered all the details here )

  6. Add branding and customisation to the KC bot to showcase it as a  part of your product.

  7. Have you got a chatbot already? Don’t worry; you can integrate it into the KC bot and launch it from there whenever you want.  ( Watch this recording on how to set up one)

  8. Want to embed a chatbot on a UI element itself, you can do that as well. You can even control it via API calls. (Attend our next office hours session, to know more about it)


SaaS is a crowded space. You built a product from scratch, and every feature was built to solve significant problems. But customers are shifting like crazy, and there are no traces of why they are churning. If that resembles your situation, you have a “Value gap” problem that needs to be addressed immediately. Hop on a call with your CSM and understand how to leverage the KC Bot to bridge the gap between your customer expectations and product experience. 


Happy PX-ing!

3 replies

Userlevel 7

Great post @Sruthimalla !


At Gainsight, we drink our own champagne and rely so much on both PX and CS to run our businesses.  So, be sure to check out our up to date Knowledge Center Bot implementation for actual engagements, product knowledge, and custom content to get some deployment ideas for your KC Bot!



Userlevel 6

Fab post @Sruthimalla addressing the value gap that in most cases could be the silent reason behind the churn; and you got me hungry for Vadas now ☺️

Userlevel 4

Fab post @Sruthimalla addressing the value gap that in most cases could be the silent reason behind the churn; and you got me hungry for Vadas now ☺️

Thank you @andutta !:relaxed: