3Rs to Guide Your Product Roadmap: Revenue, Reach, and Retention

Explore the simple-to-use, Three Rs framework that guides how Product Managers should balance how a roadmap item impacts revenue, the possible reach of a feature to new customers, and how it affects your current customer base. We'll explore real-world examples on how to translate this framework from theory to reality. This workshop was most recently conducted at the SaaStock Remote event, and is based on an article Sameer wrote for Business 2 Community entitled How Leading Product Led to CEO: The Three Rs.

Topics covered in this workshop

  • Potential pitfalls of following hierarchy or the loudest voice
  • Examples of how roadmap items impact Revenue, Reach, and Retention
  • Overview of the 3Rs Worksheet resource

About the presenter(s)

Sameer-geometry-800pxSameer Gulati, CEO & Founder, Ordway 
Sameer’s track record designing many of the world’s leading ERP and financial billing systems equipped him with the knowledge and desire to found Ordway. As one of the first Product Managers at Zuora, Intacct, and Workday, to product leadership at First Data, Sameer developed a deep understanding of the heartbeat of a business – billing and finance. An entrepreneur at heart, Sameer is also an active angel investor including investments in UrbanStems, Social Tables, TrackMaven, and Advantia Health.

Read the transcript of the workshop archive

Sameer Gulati, CEO & Founder, Ordway [00:00:00] A little bit about Ordway, what Ordway is a billing and revenue recognition automation software. Our platform automates the entire workflow between sales and finance, which includes contract management, billing, payment processing, collections, revenue recognitions, insights. So as you can imagine, there is a lot of product that we build and manage and we use a very simple framework. We call it the 3R framework to manage our roadmap. And I'm excited to share this with everyone. And I would love to make this interactive as we go along. So let's go to the next slide over here. So a little bit about me. Product is certainly in my DNA. I have been doing this over 20 years. I've built I've helped build a lot of complex enterprise systems in billing ERP payment processing. For context, I was employee number six, first product manager at Intacct. The company grew and got acquired by Sage for 850 million. I was the first product manager at Zuora. Among the first 10 employees help take their product to market. And the company is a publicly traded company today. It's you know, and then Workday is another company, which is a large SaaS vendor. I was part of the I was part of the team in the early days when they were under 50 employees product first product manager to take their products to for finance, to market and so forth. So anyway, just contextual. I have been in product for a long time, help grow products that have become large billion dollar companies. And I've learned a lot over the last 20 years and that's exactly what we are implementing at Ordway. So I would like to make this interactive. So what we are doing here is there is an app called Slido. We're going to do some live polling as we go along. So what I'm going to ask everyone is, please take out your phones. Scan this QR code. This will load up the Slido app on your phones. And then we will do some polling to start with. So what I'm also going to do is I'm actually going to for those of you who want to do this on their browser and open up this link that I just posted in the chat. And this will also open the Slido app if you don't want to do it on your phone. I'll give everyone a minute to do it. And the goal is to make this workshop a little bit interactive, not one way presentation. And hopefully we can get some polling here going as well.


Sameer Gulati, CEO & Founder, Ordway [00:02:46] All right. The first confirmation that I get on the chat that it's loaded, I'll move to the next slide. All right. All good. I see one confirmation. And if you need more time, definitely use the URL that I put on the chart for loading this up.


Sameer Gulati, CEO & Founder, Ordway [00:03:07] All right. Well, number one, let's see. Are you in a time zone where you can start drinking? So I have this app open on my side. This is a test. I have this app. What I do is I'm going to enable this poll over here. And I want to see some polls start coming. I know we are all in different time zones. For me, it's early. It's ten, thirty a.m. in the morning. But I would love to see where people are. And let's start getting some polls in.


Sameer Gulati, CEO & Founder, Ordway [00:03:35] OK. The polls are increasing.


Sameer Gulati, CEO & Founder, Ordway [00:03:40] Seventy percent say it's SaaS and it's always drinking time. That's what I expected. Very good. All right. So let's I'll leave this poll open and I would let you guys were taking some time to load the get this for going. While I get on with my workshop over here.


Sameer Gulati, CEO & Founder, Ordway [00:03:59] So let's talk about the problem that we are trying to solve in our in product organization.


Sameer Gulati, CEO & Founder, Ordway [00:04:04] I'm assuming most of the people here are product managers and you're dealing with these decisions every day. The biggest problem that we see in most product company is that the loudest voice always wins, right? Typically, it's driven by hierarchy. If the CEO says she likes blue, we're making it blue. That's typically how most of the product decisions are made and so forth. And then to reinforce, the salesperson comes in and says, you know what? Let's make this blue. And we will land a million dollar deal. Well, what are you going to do as a product manager? You have a million dollar deal in the pipeline. You will make it blue because it's a million dollar deal after all. Right. So it's essentially creating a product culture where the loudest voice and the most recent voice is driving the decision in the direction of the road map. This is not a long term business strategy. This is more of a reactive strategy to who is more convincing on what should go on the road map and so forth. All right. Let's do another poll over here. I would love to get a feel for how many in your company, in the product team, the decision that actually made and the loudest voice. So I'm going to go back to my poll over here and I'm going to close all the first and enable the second point over here. I would love for you guys to start answering this question on.


Sameer Gulati, CEO & Founder, Ordway [00:05:38] All righty. Let's see. Some polls are coming in.


Sameer Gulati, CEO & Founder, Ordway [00:05:48] Well, it looks like a majority of you actually don't make decisions based on the loudest voice. So that's promising. That's a start.


Sameer Gulati, CEO & Founder, Ordway [00:05:56] All right. I'll keep that open for the time being and so forth. So this next slide over here is I'm going to use Ordway his own roadmap as an example and how we do things ourselves. This is to help visualize everything that Ordway platform does between sales and finance. Sales can be driven from salesforce or whatever system you may have over there. Our platform handles everything after that from sending out a quote your customers, managing the contracts day to day operations, billing, revenue recognition. There's a lot of finance that we do in our system. Journal Entry, sub ledgers, and then analytics. We have built an entire B.I. Tool that allows you to create customer reports and get analytics at your at your fingertips, but also ability to get the data out of our system, whether it's API is Excel exports UI interface. There's a lot that our product and our platform does and not to mention the integrations to other systems like accounting systems, like QuickBooks or Netsuite and things like that. So we definitely use this Three Rs framework. The Three Rs framework basically stands for revenue, retention and reach. How do you prioritize your roadmap for certain items that drive revenue? Certain certain items? A lot of us drive revenue that are there are feature on product items that we in product teams will do that help expand our reach. And I'm going to use some examples from Ordway as context to showcase how. What are some of the examples for each of these three Rs? Revenue, Reach, retention and and and we'll do an exercise together to try and create a roadmap over here. So the first example is for the first R - revenue. One of the key things that Ordway does well is usage-based billing. Now, no one in the market does it really well for B2B SaaS. This is a huge pain for a lot of SaaS company, as we know does this early on that if we do a really good job and usage-based pricing, we will be able to convert a lot of these customers to paying customers. Examples of usage-based pricing can be as simple as your cell phone plan, where you're charged by a minute, but also get really, really complex for volume pricing, tiered pricing. You could have prepayments. Your customers may be prepaying you for X number of units and then bring down do the prepayments auto refill. There is a revenue recognition impact of how people consume the prepaid units that you purchase. So be focused on this as a key differentiator from our system among all the other things that we do. And this was purely driven by the goal of converting more customers that have this problem. And this was a revenue feature, basically. So this is an example that we used internally for the first R revenue. So let's look at an example for Reach. Now, reach is defined as features that will allow your product marketing to make some noise. Go talk to more customers like, for example, add Ordway. We support multiple currency in our framework. Now, if we did not support that, we we would have been shot down at the very first conversation with some transnational international companies. Right? So by simply supporting the ability to have multiple currencies and Ordway, we said we we expanded our market globally to talk to any organization that does business cross-border or have entities around the world. And these days, especially most even startups are multinational from day one. They have international customers. They have employees in other countries and things like that. So just by launching a very simple feature to support multi-currency in Ordway, this expanded our reach, many for as an example. The next R is retention, retention. You're always going to have customers who want this. They would like this better. They would like to change something else and so forth. And some of them, some features are absolutely critical that you may have to do otherwise you will lose the customer. So they are driven by retention over here. Now, here's an example that we used internally ourselves. We did have a Salesforce to Ordway integration two years ago, which was one way data comes from Salesforce to Ordway. Our customers more and more requested that we support a bi-directional integration. And we listened to our customers. We have to make sure our customer are successful on our platform. So this is a simple example of our retention based feature in Ordway context. So how do we put this all together? We have a we use a very simple framework in Ordway. We just put them in a spreadsheet. Over here, we use a simple waiting for each. And then that's how we decide to prioritize what goes first. We're going to do this exercise together. I'm actually going to jump to my spreadsheet here. And what I'm going to do is I'm actually going to put this in the URL over here, so everyone has access to the spreadsheet while I'm talking through this spreadsheet, how this works. I would love for you all to make a copy. You can. This is Google Sheets. You can go to file, make a copy, or you can download an Excel so you can have a copy of this template for yourself. It has some formulas built in. Now, there it is. It is one advantage of doing a virtual conference. I would not have been able to share this spreadsheet if you were ordered personally. So if you're gonna do this exercise together. So, so. So let me just walk this through. Right. Here, the goal for this Quarter. I'm just using some very simple examples, we have used an Ordway. The goal for this quarter is to create a roadmap where we address 50 percent of the features attributable to revenue, 30 percent to reach and another 20 percent retention. So I took six product features over here as examples and did some relative weighting and here usage based billing. As I mention, this was big on revenue. And we have used a very simple map, here, high, medium, low, high as five medium is three and low is one. So for usage based billing, usage impacts revenue big time gave it a high, but it definitely impacts reach and retention also. So there are certain features that have weighed in all of the three sections over here. Now we talked about multi-currency, et cetera. This is purely a reach roadmap item. This is not something that people will pay extra for. But yes, it does impact revenue to certain extent because now you can convert these international customers are using your product as well. So we gave it to five for reach and then we gave it a low for revenue and retention. So similarly, we went out and ranked all the items in the roadmap that we have. There are some small items as well, like make sure you have tooltips on UI. This is a retention feature. Make sure that we have good naming conventions and things like that. And then you simply add up all the features. We did a weighted average over here and now we can prioritize what goes first and so forth. But if we want to meet our goal of 50 percent, we need more features in our roadmap that are going to help us drive more revenue-based features. So what I'm going to do is I'm going to come up with a feature over here. I'm going to say you're going to really if you do our analytics framework over here, this is high on revenue. Just by adding this feature, my relative weight for revenue went up and I will probably keep adding more features because the goal for this quarter is to make sure that half of the features that we roll out have, in fact, have direct impact to revenue. And so forth. So there's a very simple framework over here. Now, all of you hopefully have got a chance to look at this spreadsheet and download it. I would love to. Let's go back to my presentation. We're going to take a minute. Also, we're here and we'll let you do this on your own so that we can address some of the questions that come up during Q&A. I'm going to pause my share here or I'll just leave this on. So you guys can take the time to do it. Yes, if we were if we were doing this conference in person, we would have certainly used breakout rooms where broken the group into teams and then I would have been able to see what you guys are doing. But we'll make the best here. And I you can you can post your questions on chat or ask directly towards the end.


Sameer Gulati, CEO & Founder, Ordway [00:16:04] So given we have seven minutes left in the session, I'm going to open the third poll that we have over here.


Sameer Gulati, CEO & Founder, Ordway [00:16:12] If you guys are interested in learning more about Ordway, I will go ahead and go to my poll over here. I'll stop this and I'll open the third poll. Definitely. Please go ahead and put your name and email. And we would we would be happy to share more about what we do at Ordway over here. And now I'm going to put this conclusion slide here and open this up for Q&A. But basically to reinforce what we just talked about, the Three R framework is is a more data, quantitative based framework to make decisions rather than management driven or the loudest voice driven and so forth. There are always going to be circumstances where no matter what you have in your Three R's, framework management or short term needs will overrule it. It always happens. There is one customer that's really, really upset and you have to do something for the customer. You will productize that no matter how small the weight for that feature is. And so forth. But this framework at least helps make a strong argument with management on why we should prioritize something over the other and so forth. So at this point, I'm going to open it up for Q&A. Maybe I can even stop sharing my screen so we can have more in-person charge for the remainder of the six minutes left in the.


Sameer Gulati, CEO & Founder, Ordway [00:17:40] Right, shy crowd, thank you so much.


Radka Jancikova, SaaStock [00:17:45] Man, this is really good. Some great insight. So please, guys, don't be shy and we'll bring some questions for Sameer.


Sameer Gulati, CEO & Founder, Ordway [00:18:07] OK, yes, if there are no questions, we can give people back five minutes for the next day for the next session starts.


Radka Jancikova, SaaStock [00:18:14] Yeah, sure. Unless anybody needs more time to come up with to get the questions together. I can see somebody is trying to join, too. So, yeah, well, if and if nobody has any questions, that's fine. Thank you, everybody, so much for attending. And thank you, Sameer, for a great presentation. Thank you, everyone. Yeah. Have a good evening. Bye.

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