If I had to guess, integrations often fall to the bottom of your backlog, despite requests that come in from sales and CS.
From developing and maintaining core product features to undergoing major code refactors, there’s always something else that needs to be prioritized over building integrations for customers.
However, you could be missing out on significant growth opportunities because you are backlogging your integrations. In this article, we'll walk you through why.
Let’s get into it.
- Your customers use dozens of SaaS tools, and they expect your product to integrate with the rest of their tech stack, especially in enterprise
- Integrations accelerate product onboarding and adoption, which leads to improved product usage and subsequently retention
- Data out integrations make your product more visible across your customer’s tech stack, and also lead to your product becoming an essential part of their overall data flow.
- If your customer needs an integration that’s not in their current pricing plan, they’re likely to upgrade, leading to more expansion revenue for you.
- Integrations validate new product line opportunities, allowing you to offer your customers additional value and further driver expansion revenue
- Having your app displayed on other products’ integrations pages will make it easier for customers to discover you, as well as open up numerous opportunities for co-marketing and co-sales.
Reason #1: Integrations are a top requirement for SaaS buyers
According to Statista, the average organization uses as many as 110 different SaaS tools.
In that context, look at your sales process from your customer’s perspective for a moment. How appealing can an additional SaaS (your product) be if it doesn’t integrate with the other key tools they use, like their CRM or their communications platform?
Not especially, in our experience. Lack of integrations = friction and inefficiency within their workflows, which is why your customers are likely optimizing for certain key integrations over core product features. And if your competitor(s) offer the integration they need, that puts you at even more of a disadvantage.
You can also bet your customers don’t want to go to the hassle of paying for a platform like Zapier, do all the work of setting up and maintaining integrations alone, and still only be limited to basic data mappings.
This is even more apparent if your customers are large enterprises with thousands of tools in their stack. Put simply: you just won’t be on the table as an option if you can’t integrate. It’s a prerequisite to moving upmarket.
Conversely, if you do offer integrations, it’s easy for your customers to see how your product fits into their day-to-day workflows. And the more integrations you provide with their stack, the more natural that fit feels. Changing behavior and habits is frustrating, so the less disruptive your app can be to their existing workflows, the better.
Reason #2: Integrations accelerate onboarding
Given the interconnectivity of the SaaS landscape that we outlined above, it follows that the value provided by many SaaS apps is dependent on data provided by third party apps.
Imagine this: a user signs up for HubSpot's marketing automation platform, which initially contains no contact data. Without integrations with one or more CRMs, there is no way for the user to experience the value of their platform.
It’s in the commercial interests of every SaaS company to reduce Time to Value, which is the time between a user signing up and when they first understand the value your app provides.
So can you imagine if HubSpot forced new users to manually import contact data from other platforms, and subsequently update that data manually whenever there are changes in either platform? The amount of friction associated with that type of onboarding experience would be a huge turn off for new users.
This is especially important if you have a product-led model, or are transitioning towards one. The first session experience is crucial, as you need to ensure they experience the value of your product right away. If it requires a lot of upfront work on their end (ie. manually importing data from other platforms) to see the value of your product, they may leave your app.
The greater the number of core integrations you're able to offer customers, the less time they will need to spend manually uploading data or using a 3rd party platform like Zapier to build and maintain integrations on their own.
Ultimately, your customers came to you because they wanted to use your tool to solve a specific problem. The quicker you let them do what they came to you for, the happier they will be.
Another example of a company that understands the value of integrations in user onboarding is Outreach. With numerous automated integrations to CRMs such as Hubspot and Zoho CRM, Outreach makes it extremely easy for sales reps to start prospecting. If the reps had to manually export lead data from Hubspot before using Outreach, you can bet they’d be less likely to adopt Outreach into their tech stack.
Reason #3: Integrations make your product more sticky
For any SaaS business, customer retention is one of the most important aspects of sustainable growth. After all, it can cost up to 5x more to acquire a new customer than to retain an existing customer!
So it’s fair to say that churn is not your friend…
If a customer churns from your business, it’s not a decision that is made overnight. Churning is a process that happens over weeks and months, as your customer gradually stops using your product. This is called “activity churn.”
So how do you prevent activity churn? There’s no better way to maximize daily engagement with your product than to offer integrations. That’s because integrations offer a significant boost to both your product’s utility and its visibility across your customers’ day to day workflows.
Suddenly your customer isn’t just seeing your product in-app; they’re getting notifications about it, ingesting its data in their other apps, enriching your product with external data - the list goes on.
A customer like that is much less likely to rip out such an ingrained part of their overall workflows. It would be a huge pain for them to break their data flows and change internal processes, which can ultimately impact their operations.
So it’s no wonder that offering integrations to the rest of your customers’ tech stack increases your overall “product stickiness.” We’re talking about a 10-15% reduction in churn here, which will compound and make or break your company’s MRR growth prospects.
A good example of a business that has measured the tangible business value of integrations in preventing churn is Typeform. Typeform noticed that its best customers were integrating Typeforms into their broader website architecture, and those who activated integrations demonstrated a 40% lower churn rate.
Reason #4: Integrations can drive expansion revenue
In today’s product-led landscape, many SaaS companies build free/low entry-level tiers to attract users, and leverage their highly optimized product experience to get users to spend more money in exchange for access to more features.
The two most common SaaS expansion strategies are to upsell based on the number of seats the customer needs (proxy for usage), or to limit specific product features to higher tiers (such as SSO). In the case of integrations, you can approach upselling with either approach.
Imagine that your customer needs a particular integration that’s only available in the next pricing tier up. They could set the integration up on their own, but chances are that this would be expensive, time-consuming, and involve a lot of reading of arcane third-party APIs. Not fun!
More likely, they’ll seek to upgrade to the higher tier, meaning more expansion revenue for your SaaS business.
Here are 3 practical examples of what this could look like:
- Your customer experiences massive growth, to the point that it’s now more of an enterprise than an SME. You had chosen to put integrations aimed at enterprise buyers in the highest pricing tier, so the customer decides to upgrade.
- Your customer’s business is becoming more complex. They previously used 65 tools, but now they need 140! Increasingly, they place a high degree of value on the number of integrations that the tools they use provide them with. So upgrading to your package with 20 integrations is a no-brainer over using their current package, which only offers 10.
- Your customer switches to Salesforce, experiencing a significant increase in sales due to the improved internal systems the tool provides. Salesforce becomes so core to their business model that they develop a policy of only using tools that offer Salesforce integration. Your customer development work showed that Salesforce is the most valuable integration you offer, so you put it in the highest pricing tier. The customer upgrades overnight.
Alternatively, if customer success finds out the customer doesn’t want to pay the full price of the next tier up, you could also consider offering them the integration they need as an individual upsell.
Reason #5: Leverage integrations to build or acquire new products
One of the bonuses of offering integrations is that they allow you a window into your customers’ broader business workflows. This opens up opportunities to add more value: not only by building features that enable your product to better fit their needs, but also by potentially offering entirely new product lines.
While your product may solve a handful of challenges that are a subset of your customers’ broader workflows, capturing additional parts of their workflow through new product lines can create new revenue opportunities. Not only does this provide significant benefits in terms of differentiating you from your competition, it allows you to provide a more seamless all-in-one experience. While this will not be the case in a few years, today, your competitors are still likely to focus myopically on their own products than leverage integrations to take a bigger-picture look at new product opportunities.
So how exactly do integrations lead to new product lines?
You can analyze integration usage in a particular category to evaluate the opportunity of building that feature within your own product.
For example, HubSpot noticed that customers were avidly using their chatbot integrations and inferred that chat functionality was a crucial part of their customers overall tech stack. Based on this insight, they decided to build their own chat feature.
Generally speaking, these new product lines will be product-adjacent, meaning they will serve the same core ICP as your existing product.
However, in some cases where you notice that cross-functional teams of your core buyer are gaining a lot of value from the integration, it could inform building a product line that unlocks an entirely new buyer.
While building new product lines can be very resource-intensive, integrations allow you to validate product-market fit before you even begin to build.
Reason #6: Enabling tech partnership opportunities
If there’s one thing that separates the SaaS businesses that thrive from those that fail, it’s that the successful SaaS teams want to provide as much value to their customers as possible.
So it stands to reason that most SaaS companies have built app marketplaces to promote integrations that make their customers’ lives easier - ultimately contributing to better retention and customer satisfaction.
By building integrations with larger partners and listing your app on the third-party product’s integrations marketplace, you will get visibility in front of their customer base. However, to take a step further, it opens up the opportunity to build more formalized go-to-market partnerships.
These tech partnerships can be extremely impactful, as customers are much more likely to trust integration partners of their existing tech stacks.
To quantify the effect of this strategy on sales, consider that Freshworks’ sales from partners close 50% faster than traditional sources. That additional social proof that’s generated through using a trusted third party goes a long way in making you trustworthy in the eyes of buyers.
Whether your motivation is to speed up onboarding, make your product stickier, or earn more expansion revenue, we hope we’ve given you enough reasons to start prioritizing native integrations!
If you recognize the value of integrations, but can’t afford to spend months of your engineers’ time building them, you’re in the right place.
Paragon’s embedded integration platform can save you 80% of the engineering per integration. Book a demo today!