As a SaaS company grows, offering integrations becomes a consideration. Integrations offer valuable benefits: lead generation, churn reduction, increased upsells, and customer loyalty. But, not all integration setups are equally effective or cost-efficient.
It can be tempting to only focus on initial costs when selecting an integration setup method. But this is a mistake. You need to consider total cost over time for each approach.
Let's explore the six significant types of integration setups, their benefits, and their drawbacks.
1. Allow customers to create their own integrations using the External API
Enabling customer-built integrations through your product's external API is a common starting point. While it provides flexibility for customized integrations, customers may need more resources or motivation to build them,. This leads to manual data transfers and user frustration.
If customer-built integrations aren't regularly updated, it causes a poor user experience when APIs change or become outdated. Additionally, in-house developers may not prioritize integration building, leading to complex configurations that frustrate users and cause delays.
Ultimately, relying solely on customer-built integrations can lead to inefficiencies and challenges for users, requiring workarounds and constant communication between users and developers.
2. Value Added Resellers (VARs) or Managed Service Providers (MSPs) Build the Integrations
VARs and MSPs play a role in customizing and reselling SaaS products, including integrating them into customers' systems. While they offer added value and insights, there are some challenges to consider.
VARs and MSPs handle the cost and maintenance of integrations, but multiple parties involved can result in subpar experiences, such as bad configurations or downtime. This reflects poorly on your product and brand.
Pricing misalignment can arise, as VARs and MSPs charge for their services, potentially overshadowing the true value of your product. You also lose some control over integration configuration, updates, and maintenance.
Keeping integrations up to date is essential to avoid dissatisfaction with your product.
Changes in software and poor user interaction design can frustrate customers and impact core business functions.
To navigate these challenges, it's important to establish strong partnerships and ensure continuous communication to deliver seamless integrations that leave customers delighted.
3. Direct customers to third-party integration tools
You can simplify integrations by building a connector to a tool like Zapier. This allows customers to connect your product with other applications without the need for extensive development. Zapier offers connections to commonly used apps, making it convenient for customers.
However, using Zapier means sacrificing flexibility and control over configurations between your app and the connected software. Customers may find the options to be too simplistic and inflexible, leading to potential dissatisfaction.
It's important to note that any technical or support issues with the third-party tool, impact the reputation of your product.
Using a third-party tool requires customers to leave your app in order to install the integration. This means your company loses control over the customer experience. Many customers face challenges when implementing the integration and setting up the specific configurations they need.
Related Content: The Pros and Cons of Offering Your SaaS Customers Native Integrations vs Third Party Integrations
When multiple companies are involved, customers may struggle to find the correct contact for support or other concerns. This can lead to a complicated integration that requires workarounds due to complex setups or inadequate code. Depending on the reliability of the third-party tool, there may also be instances of downtime or potential security risks.
4. Your External API is open to any company or developer for building integrations
Companies can provide an external API, allowing third-party developers to incorporate it into their app themselves. With minimal or no oversight from you.
If your product is popular or fulfills a unique market need, developers may be motivated to build integrations for your product. Which is great for your customers, giving your customers a wide range of options. Giving access to your API for free and not requiring any review makes it even more attractive to devs. Which often leads to more integrations being built.
However, there are risks associated with this approach. Companies or developers might create poorly designed integrations without clear documentation or customer support. They may also neglect maintenance or updates.
These factors can result in integrations that are unusable for customers and have issues such as downtime, security vulnerabilities, or the need for workarounds.
5. Tech Partners develop certified integrations
Large in-app integration marketplaces have approved or certified partner-built integrations.
You don't have to build or maintain the integrations, but you can still ensure quality and security for your customers, retaining some control over their experience.
Platforms like Shopify, Box, and Workday have tiers of approved partners, with the highest tier meeting strict requirements for uptime, configurations, support, security, and performance.
This hybrid approach allows for a wide range of tech partners while ensuring quality integration options for customers. But, imposing requirements can decrease their number because companies may be unwilling to meet those requirements.
But, there are two downsides to this approach. Only some partners will be willing to jump through hoops to meet scrict requirements. This can mean fewer integrations into your app get built. Plus, defining requirements, ensuring compliance, and enforcement take resources. You have to dedicate time and manpower to the program. And despite the oversight, it’s still possible that partners integrate in a way that doesn't meet customer needs, especially with configurations.
6. Native Integrations You Build to Your App
Create customer-centric integrations within your own application. By embedding integrations natively, you gain full control over the customer experience. Seamless installation and usage can be achieved without users leaving your app. Enjoy the flexibility to cater to your customers' specific configurations, ensuring reliable performance, security, and updates.
While this option requires an initial investment in building integrations and UI, the long-term benefits are substantial.
Related Content: How In-App Marketplaces Create a Competitive Advantage for B2B SaaS
Using a dedicated integration platform (like Pandium) can significantly reduce costs compared to relying solely on third parties. While it may involve higher initial expenses, the long-term savings are substantial due to improved customer experiences and reduced support needs.
Controlling the customer journey and having the flexibility to update integrations as required offer significant business advantages, which can outweigh the investment in building and maintaining integrations.
Every integration setup is unique. Many companies initially direct customers to third-party tools and later transition to building their own in-app integration center, incorporating both self-built and partner-approved integrations.
Before choosing your strategy, carefully evaluate the benefits and drawbacks of each approach to make the best decision for your company.