You have a quality product, you’ve confirmed interest in the market, but at what point have you hit product-market fit (PMF)? Understanding your growth stage is crucial for developing the right go-to-market strategy for your B2B SaaS business—it’s also something CEOs and founders often get wrong.
Many assume they’ve reached this PMF sooner than they actually have. Considering the array of definitions you’ll find after a quick Google search, it’s understandable why that’s the case.
It’s easy to think that once you’ve built up your initial audience of customers, you’ve proven your market fit and reached the next growth level. However, there’s a large distinction between your first few customers who might be curious about trying something new vs. customers who pay, stay, and advocate for your service.
It’s important to understand when you’ve truly reached PMF. It can be an indication that it’s time to pour fuel on the fire by:
Committing to your ideal customer profile (ICP)
Before putting all your chips on the table, you must confirm that you have the product and the audience to do so confidently. Here’s a list of 10 simple milestones to mark your progress toward PMF:
However, before we dive into each of these, let’s set up our definition of PMF.
Hear more on identifying PMF in episode 45 of the B2B SaaS Marketing Snacks podcast, where Mike Northfield and I take a deep dive into this topic:
Product-market fit means you’ve established a defendable position in a market that you can define. This means that you have a base of loyal customers in your niche ICP who are using your product, who like using it, and who tell other people about it. We often call these “engaged advocates.”
Because the line between your initial MVP audience and your PMF audience of engaged advocates can be gray, use this list of 10 checkpoints to measure how close your company is to PMF and what areas you need to focus on to get there.
The first milestone towards achieving product-market fit is to attract 10 unique visitors to your site without any external aid. These individuals should find your platform solely through organic search. This initial traffic represents the beginnings of genuine interest in your product, showing that it has some appeal and discoverability.
For this milestone, you’ll need to have web pages ranking for 10 non-branded keywords within the first page (top 10) results. Furthermore, each of these keywords should collect at least 10 monthly searches.
If you’re hitting this checkpoint, it means a number of things:
If you’re struggling to pick up traffic for the keywords you’re most interested in ranking for, or are simply not sure which search terms you should be focusing on, check out our “Beginner's guide to B2B SaaS SEO content.”
The best way to build search authority is by publishing high-quality and relevant content for your audience. Consider what they would be searching for and what knowledge you can offer them. For more on creating valuable, ranking content, see these related resources from our library:
You’re beginning to build a genuine community—an audience that is curious about you and wants to learn more and hear from you. For this checkpoint, you’ll need 10 people who have willingly granted permission for you to stay in touch.
These contacts may have…
These aren’t just 10 of your friends or family members either; they are subscribers who fit in your ICP and would have an interest in your offering.
Now transitioning from people who are passively interested to actively engaged, hand-raisers are individuals who have expressed an interest in your product. These prospects or marketing qualified leads (MQLs) have willingly filled out a form or requested a conversation or demo regarding their needs. This interaction signals a deeper level of interest and potential conversion.
These contacts may have…
10 active users of your product or service. This means that you’ve built an audience who are more than curious about your service—they actually use the product. They are investing their time to explore your solution. Tracking logins, purchases, and user data can help you measure this.
Now that you’ve gotten your first set of users, you need to get them to keep coming back. User retention is a crucial indicator of product satisfaction. Having 10 repeat users signifies that your product/service has not only attracted initial users but has also managed to create enough value that they return for more. 10 people have recognized they have an important problem to solve and that you have a good solution.
This metric, measured at least a week after their initial sign-up, shows that you provide real value with your offering that people are willing to stick around for.
This indicator looks at how many people actively share and evangelize your product. If more and more of your users are getting enough value out of your offering to become advocates for it, that’s a great signal for PMF.
These sharers (or referrers) are extremely valuable for your sales and marketing as they can often also help you build your first pieces of social proof in—customer testimonials and case studies (we believe testimonials are the most valuable content you can have). Connect with your audience, ask them to share, and set up partnership or referral programs to boost this metric.
The transition from users to paying customers is pivotal in confirming PMF. You’ve found people who not only find value in your product but are also willing to invest their money in it. Your number of customers is a fundamental metric that directly shows the market's willingness to pay for your service.
Testimonials are one of the most powerful marketing assets in your toolbelt. They not only provide external validation for you but can be shared among your audience as social proof. Building your library of quotes and written and video testimonials should be a primary focus for your marketing and customer service teams as you try to cross the gap between MVP and PMF.
Though they may not make your testimonials page, negative feedback is often just as valuable as positive feedback during this period. Interview any customers who are willing and use those insights to improve your product and positioning. You may not know what parts of your messaging are most impactful for your audience until you talk with them.
Use our “24 customer testimonial interview question examples” when leading your own interviews.
Referrals are a testament to customer satisfaction and loyalty. Achieving 10 new customers who have signed up after being referred by existing customers is a clear indication that your product not only meets expectations but exceeds them. Implementing a formal referral program with tracking codes can help establish and measure this key performance indicator (KPI), providing insights into the strength of your customer community.
Reaching these milestones paints a comprehensive picture of your product-market fit. It's not just about acquiring users but ensuring their satisfaction, loyalty, and willingness to advocate for your brand. These metrics, when achieved, signal that your product has not only found a market but has established a strong foothold within it.
If you’ve confirmed that you’ve hit PMF, congratulations! Now it’s time to kick your growth into the next gear. See our “B2B SaaS marketing plan to scale” for more on what your next big moves should look like. When doubling down on your sales and marketing it pays to get things right the first time, which is why following a proven playbook like T2D3’s is helpful for making sure you’re taking full advantage of limited marketing resources and bandwidth.
This is also a time when many companies are looking to make their first full-time marketing hires. Partnering with a full-service marketing agency like Kalungi, however, is a great alternative, allowing you to shortcut the in-house hiring process and immediately ramp up your marketing efforts with an experienced, full-stack team led by a B2B SaaS-specialist CMO. If you’re curious to learn more about how your company can grow with our full-service marketing support, click here to learn more.
Stijn is Kalungi's co-founder and board member. He is a serial SaaS marketing executive and has over 30 years of experience working in software marketing. He is co-author of the T2D3 book and masterclass that helps startups drive exponential growth.
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