SaaS 102 #17 What Mooncakes and PLG Have in Common
With a population of 1.4 billion people, China is one of the biggest markets in the world. Some products can become hugely successful just by capturing the Chinese market, even if they never really penetrate the rest of the global market.
Take WeChat, for example. The social networking and messaging app is used everywhere in China, and it has a user base to match, with more than 1.2 billion monthly active users. That might not be as many users as WhatsApp, a messaging app that has around 2 billion monthly active users. But when you consider that most WeChat users are based in just one country, China, its achievements are pretty incredible.
Actually, the phenomenon of products being popular in China yet almost unknown elsewhere isn’t just limited to modern tech. It even applies to some traditional Chinese snacks.
In China, snacks called mooncakes are hugely popular. Not only are they delicious parcels of sweet or savory filling wrapped in a soft pastry, they are also closely associated with the Mid-Autumn Festival.
The Mid-Autumn Festival falls on a day in the lunar calendar when there is always a full moon. “Watching the moon” with friends and family while eating mooncakes is a traditional way to spend the holiday in China. As well as eating mooncakes at this time of year, people will often also give them as gifts.
As they are a well-loved snack and an integral part of the Mid-Autumn Festival, mooncakes don’t need too much marketing within China and neighboring regions. Around the rest of the world, though, mooncakes are not generally eaten.
But what if you wanted to achieve with mooncakes what apps such as TikTok have achieved with social media?
What if you wanted to take Chinese mooncakes and sell them around the world?
Perhaps a lot of people might think that for people around the world to want to buy mooncakes, they first need to understand the Chinese customs and traditions surrounding mooncakes. If we follow that way of thinking, then before we sell mooncakes, we need to explain the Mid-Autumn Festival.
But actually we don’t need to do that. If the goal is purely to sell mooncakes, then we don’t need to explain the Mid-Autumn Festival or China’s traditional customs. Once we realize we don’t need our customers to fully understand the cultural background of mooncakes, the job of selling them becomes simpler.
What does all this have to do with SaaS?
Well, it so happens that recently many people have asked me:
How can SaaS companies sell their products globally?
And from my point of view selling SaaS products globally isn’t so different to selling mooncakes around the world.
I’ll now use a few examples to explain how, whether we’re selling SaaS software or mooncakes, we can use similar techniques to be successful on a global scale.
SaaS tools and mooncakes should both be simple and straightforward
Mooncakes are a user-friendly food. All you have to do is remove the wrapper and you can start eating them right away.
SaaS products should be as easy to use as possible. Ideally, using a SaaS product should be about as easy as eating a mooncake.
What if mooncakes weren’t designed in such a simple way at all? What if, before we could eat mooncakes, we had to place them in a dish, add a little water and sugar, and steam them in a pressure cooker for 15 minutes?
What if we had to go through a long and confusing process before we could just eat our mooncakes?
Can you imagine the expression on the face of the customer who found out they had bought mooncakes like that?
Good mooncakes should be ready to eat straight from the packaging.
In the same way, a good SaaS product should be as easy and simple to use as possible. Ideally, using a SaaS tool should be as easy as removing the wrapper from a mooncake and eating it.
So, when we create SaaS products, we should try to subtract rather than to add. This principle is especially true for SaaS tools.
Let’s use AfterShip shipment tracking as an example:
Originally, customers needed to provide both the tracking number and the carrier name to be able to track a shipment. Our first subtraction was to stop requiring that customers provide the carrier name.
Once we’d made this subtraction, we only required customers to provide the tracking number. We could do this because our AI systems can auto-detect which carrier corresponds to a given tracking number.
The following image is an example:
After making this change, though, I still wondered if we could further simplify our shipment tracking feature?
After all, it’s possible that one order can correspond to multiple tracking numbers. And if the customer needs to enter many tracking numbers it will definitely be inconvenient for them.
So the second subtraction we made was to remove the requirement to enter the tracking number. Once we’d made this subtraction, customers could enter their email address or phone number together with the order number to track shipment information for all shipments in that order.
But after making this change I still thought:
Is there any way we can make this simpler? Is there any way to make it so that customers don’t need to enter their order number or email address?
That’s why we created the AfterShip mobile phone app. All users have to do is install the app and link their email or phone number. Once that’s done, they can receive notifications about their shipments with no further action required on their part.
As I wrote above, good SaaS should be as simple as possible, just like mooncakes.
It’s easy for almost anyone to pick up a mooncake and eat it, no matter whether they’re three years old or 80. When you buy a pack of mooncakes, you don’t expect to find an instruction manual included.
In the same way, a good quality SaaS platform, tool, or app shouldn’t require an instruction manual. You should be able to just open it up and start using it right away.
You should be able to appreciate a good mooncake by eating it, and a good SaaS product by using it
Once we’ve made a great mooncake, or a great, simple-to-use SaaS product, we still need to resolve the question that started this article:
How can we sell mooncakes (or SaaS products) globally?
And the answer is very simple: we give people free mooncake samples to try.
If someone eats a piece of mooncake, they can tell us within a matter of seconds whether they like it or not.
And if the person ends up liking mooncakes, then it’s only natural that they’ll want to buy some.
If the person doesn’t like the flavor of mooncakes, then we can quickly collect customer feedback. We can then iterate to new versions of mooncakes, and in fact that’s a lot like what’s happening with the different mooncake flavors being sold and promoted at the moment, such as ham mooncakes, snow skin mooncakes, and so on.
So, how can we ensure that customers can immediately appreciate the benefits our SaaS products can provide, just as if they were eating great mooncakes? The two main steps we should take in order to achieve this are:
- Reduce the amount of work it takes for customers to get started using the product. Ensure the customer spends their time actually using the product, rather than spending their time learning how to use the product.
- Provide a free trial to attract customers to try using our products.
If we can successfully complete these steps, then the customer will have invested time costs on trying out what we have to offer. As the customer cannot get back the time they have invested into a product, the time they have spent will be “sunk costs.” The more sunk costs the user has invested in a product, the more likely they will be to make a purchase so that the costs they have invested won’t have been wasted.
I will write more about sunk costs and how they apply to SaaS in my next article in this series.
Where can we sell our mooncakes (or SaaS products)?
Once we’ve made a product which is simple, easy to get started with, and which the customer will quickly appreciate the value for, the next thing we have to do is promote and sell it.
No one will try to sell mooncakes in a stationery store. In the same way, you should try to promote your product in the same places your target customers will often appear.
Mooncakes are usually sold and promoted in places like supermarkets and food retailers. That’s because those are places people go to buy food.
Following this logic, if we want to sell mooncakes globally, then we should find the shops and markets where people go to buy food in our target countries, and offer free samples of mooncakes there.
The customer acquisition cost (CAC) of this sales method is very low. All you need to do is let customers try a small sample of mooncake. If they think it’s good, they’ll buy some mooncakes. If they don’t like it, they won’t.
What you don’t need to do is rack your brains thinking of the best way to explain the culture and traditions behind the Chinese Mid-Autumn Festival and mooncakes.
The same applies when promoting SaaS products globally. As long as you understand your target customers clearly enough, then you will know where your customers will come into contact with your product.
For example, our target customers might be small to mid-sized eCommerce sellers in Europe and North America. They have their own brand and website, and are willing to use all kinds of SaaS tools to resolve issues and challenges.
In 2012 we found that Shopify was a channel which many of our target customers used. We applied the same logic described in our example about selling mooncakes above, and decided to promote our product by listing it on the Shopify app store.
We did this because we know that people who have opened their own online store will most definitely want to find a tool to resolve shipment tracking issues. So even if we didn’t do any paid advertising, they would still be able to find us.
And after they find us, they could quickly become our customers. That’s because our product is simple and easy to get started with, and once customers have started using it, it’s easy for them to see its value.
With all of these factors in place, as long as Shopify grows as a marketplace, and our customers on Shopify continue to grow their businesses, then our business too will naturally continue to grow.
Summary
As you can see, selling SaaS products to the world is actually a lot like selling mooncakes globally. In both scenarios, we need to do the following:
- We need to make sure our product is simple and easy to use. (It should be as simple to use as mooncakes, which can be unwrapped and eaten straight away.)
- As soon as people start using our product, they should immediately understand its benefits. (Just as if you eat a mooncake, you know straight away how delicious it is.)
- We need to know clearly who our target groups are and where to find them and use this knowledge to promote our product in the right place. (If we’re selling mooncakes globally, we need to go to places where people often go to buy food in our target countries.)
If you work with SaaS products aimed at a global market, do you follow these principles in your daily work?
About Author:
Teddy Chan is a serial entrepreneur with 20+ years of experience in SaaS and eCommerce. His latest venture is AfterShip, a SaaS post-purchase experience platform that empowers eCommerce retailers like Amazon, eBay, and Gymshark to improve their customer experience, drive sales, and increase brand loyalty.
SaaS 102 is a series of articles where I share my thoughts and experience with SaaS. My fundamental belief is that a great team with an average idea will always go further than an average team with a great idea. If you want to be part of this great and growing team, check out careers at AfterShip here—I’m currently on the lookout for superstar sales talent.