California Institute of Technology and Stanford carried out an interesting study in 2008. The participants (who were not wine experts) were told that they would be tasting five different samples of wine, when in fact only three were used—$5, $90, and $30 bottles respectively. However, the $5 wine was marked with a $45 tag and the $90 one was marked with a $5 tag. The results were surprising. The participants said that they tasted five different wines. Not only that, but researchers also found that participants reported the wine with the fake higher price tag as tasting better.
This study seems to prove that when you have nothing much to go on, a higher price carries with it the perception of higher quality. In this case, it even affects something as cardinal as taste.
How this illusion of value affects SaaS
SaaS has been a game-changer for small and medium businesses. It's helped them access quality software at an affordable price and use it every day to grow their businesses.
Yet when big companies spend millions of dollars on marketing, it's natural for businesses of all sizes to think perhaps they're doing their business a disservice by not opting for the more expensive product—especially when there's an abundance of social proof and FOMO associated with it.
The impact of this decision doesn't end with the high cost, though. It's felt every day when the software doesn't work well with the other products you use, or when you're not able to customize it the way you want. Imagine ending up with a scenario where you have to change your entire lineup of SaaS apps just because that one app which "everyone" seems to be using promises to grow your business exponentially. These are all consequences that you'll have to live with, and it's going to cost you time as well as money.
Making the best decisions for your business
This problem of making software purchasing decisions influenced by another company's marketing occurs only when we think of the software solution as something separate from our business.
If we ask "what's the best solution on the market," we're making it less about our business and more about the company claiming to be the best around—and doing it quite loudly, as well.
"I'll pay whatever it takes to get the best" is another way we make it less about our business. Here we're already talking about the cost and falling directly into the other company's marketing pitch.
An effective reframe would be something along the lines of "I'm going to find a quality solution that's reliable, flexible, and suits the unique requirements of my business." Here, we're neither talking about the cost nor the brand of the software. The focus remains on our business and providing it a solution that's reliable and flexible.
In this frame of mind, we bypass all the advertising, advocacy, and social proof by default. We're free to pick, try, and choose the software that works best for us from an ever-growing SaaS market.
Retaining our freedom while building our SaaS stack
When we put the focus on our business and the various processes involved, we need the various apps we use to work with one another for executing complex workflows. Will we need to compromise on fit and functionality for interoperability?
We've managed to bypass the advertising and branding filters, but aren't our choices limited anyway, irrespective of how much the SaaS market is growing, since we need multiple apps passing data to and from one another? We surely can't expect one SaaS vendor to support all the apps we're using from such a huge pool of applications.
The answer, then, is to invest in an integration platform.
People bring up automation and saving time when talking about an integration platform, but the flexibility it provides in allowing us to choose the apps we want might be its most important benefit. Add to that the additional advantage of saving on the time and resources required for building and maintaining your various integrations, and a SaaS integration platform or IPAAS becomes one of the most valuable subscriptions a business can have.