SaaS marketing is a type of marketing that specifically focuses on promoting and acquiring leads for subscription-based SaaS products. SaaS, also known as Software as a Service, is a way in which businesses sell their products in cloud-based applications with regular updates and added functionality.
Compared to businesses with physical products or one-time purchases, SaaS businesses offer an intangible product and need to continually prove to their current and potential customers that their "rented" or subscription service is worth the monthly fee.
In this article we will walk through:
- SaaS Marketing Strategy
- The SaaS Carrot
- How Do I Market My SaaS Products?
- What SaaS Marketing Metrics Should I Regularly Review?
- Getting Started with Marketing your SaaS
Before you jump into promoting your SaaS, you need to spend time crafting your SaaS marketing strategy.
The basics of any marketing plan are made up of strategies and tactics. In general, strategies are the overall approach to achieving goals and objectives (with specific, concrete targets), and tactics are the specific actions that you take to achieve your goals.
Marketing strategy depends on the stage that your company is in. If you are in the early stages, then the primary strategy should focus on:
- Establishing your credibility as an expert in your vertical
- Brand awareness
- Confirming the product/market fit
- Finding your true costs to acquire a lead (CPL) and customer acquisition.
Product/market fit is a key indicator for investor confidence. This happens when your product adequately solves your target customers' problem, and there are a lot more customers where your first few came from. There are several paths to getting there, and we have explored winning strategies in the article Product-Market Fit: What Is It and How to Find It For Your SaaS Startup.
If you are an emerging/growing SaaS that has proven your product/market fit, then your strategy focus should be on:
- Channel Optimization: Rapidly expanding upon proven channel, persona and message combinations.
- Marketing Expansion: Exploring new channels to maximize reach while keeping acquisition costs in check.
- Reducing Acquisition Costs: Using traffic, conversion, and lead quality analytics to identify and reduce acquisition costs.
- Conversion Funnel Optimization: Improving the on-site experience on chat and landing pages to increase lead conversion rates.
- Brand Amplification: Using highly targeted PR to stay top of mind for your target audience.
You may be tempted to take a pinch of SEO and a sprinkle of social media marketing to market your SaaS. However, the success of your marketing tactics depend on a strong and clear strategy - and what stage your SaaS is in.
For more information on creating a strategy that fits you, dive deeper with SaaS marketing strategy: A SaaS Founders Guide.
If you are a true SaaS, the expectation is that you should be able to offer a Free Trial, a Freemium product, or at the very least a demo. Each of them has benefits and disadvantages, and one model may be a better fit for your company over another. Or, you may find the carrot you chose isn't having the outcome you expected and may need to consider switching to a different one.
Offer a Free Trial:
The key to your customers' hearts lies with a sample of your product. By allowing site visitors to test out your product firsthand (usually between 14 and 60 days) and work with your product using their data, they'll be able to figure out if a) your product meets their needs and b) if it's worth the money. Most free trials include all features, but it can also be limited by capacity or number of users.
Free trials work best in a niche market and that address specific problems. The conversion rate is generally 30% or higher as most people are serious about solving their particular pain point and willing to pay.
The challenge is to manage conversion costs, as free trials can soak up resources, particularly in the onboarding process. Strong marketing communication is key - both during and after the trial to keep people engaged.
Creativity in pairing a free trial with other options like a demo can ensure that prospects don't get discouraged in the setup process. Evernote paired their free trials with the growth opportunities of a freemium by offering trials of each paid tier.
Learn the pros and cons in our blog SaaS Free Trial: To Offer, or Not to Offer - That Is the Question.
Offer a Freemium Version:
With the freemium model, people use a product at no charge and with no time limit. This allows people to enter your product at a no/low cost, see its' benefits, and become comfortable with it before committing to larger long-term costs. It allows for significant exposure of your products, creates a loyal following and gives you access to user data
You are marketing to the masses, and while 95-98% of users will never pay, your product is so addictive that a percentage of people are willing to pay for enhanced benefits- be it increased storage capacity, support, or additional features.
However, the challenges to a freemium model is that it costs money to run, people may never see the benefit of upgrading, and Return on Investment (ROI) requires huge volume.
Another way to increase revenues under this model is to offer complementary revenue streams, such as advertising or selling compatible products, rather than depending solely on turning free users into payers.
Examples: Dropbox, Canva
Dive deeper into the Pros and Cons of a SaaS Freemium Model.
Providing a demo offers an interactive space that provides an opportunity to make a personal connection, establish trust, resolve any concerns they may have, and determine if your product is the right fit. A variety of formats can be leveraged: Facebook Live, Webinars, or 1:1 videos. Learn why the SaaS Demo is Mightier Than the Free Trial.
The pluses that make "software as a service" a great value for your customers are also the challenges that make its marketplace unique. While startup costs and barriers to entry are low, it is also quick and easy for your customers to cancel.
So what tactics should marketers implement to show that a subscription service is worth the monthly investment? We'll investigate various successful tactics divided by Inbound, Outbound and Account-based Marketing.
As you begin to map out your customer personas and verticals, you will better understand their needs and how your product can address these pain points that they are seeking solutions for. From there, they key is to educate potential customers on how your specific product can address their needs. You must establish yourself as an expert authority in your field and provide regular and consistent information on how and why your product is the best. Through inbound marketing, you are attracting your customers into the sales funnel by providing relevant knowledge, expertise, and solutions.
Customer Testimonials and Review Sites:
Potential customers want to hear what real people are experiencing, so getting reviews and testimonials and linking across all of your assets provides important social proof. These can be put across your direct channels or by listing on third-party directories like G2crowd, Capterra, SaaSGenius, or Software Advice.
Include plenty of decision-supporting statistics at this level as well as product reviews and testimonials. It's been estimated that this step alone can increase SaaS sales by 18 percent.
Find Influencers Who Can Spread The Word:
Partnering with a third party that has influence in their particular niche has shown to be an effective strategy. A third party introduces your product to your target audience in a favorable light and warms them up to the idea of using your brand. Audible and Dashlane are good examples of SaaS companies that effectively used influencer marketing.
Content is Key
There are a variety of formats you can use to convey your expert knowledge and the use case of your product. Consider email marketing, blog posts, webinars, tradeshow materials, podcasts, etc. Help your readers get interactive through quizzes, animated infographics and GIFs. You may also consider gating them with a form that captures their contact info. A SaaS marketing strategy that is a blend of gated and freely accessible content is critical.
Develop a resource library on your website of in-depth knowledge - Q&A, "how-to" pieces, case studies, videos, ebooks and white papers. Since you are continually proving your worth to not only new customers, but your current customers, your guiding principle should be a high level of service. Offer exclusive deals, beneficial content, engage with them across various channels, and keep them informed of updates.
Customize and Segment Emails:
Once you have established credibility with your audience through content marketing, you then need to nurture them to convert them into subscribers or customers. That's where segmented SaaS email marketing can help. Sending personalized messages based on where users are in the sales cycle or post-sales will help close more deals by 50 percent
Outbound marketing encompasses the more traditional marketing strategies that push your message 'out' to the world and may interrupt your audience with content they don't always want or are seeking. This includes include trade shows, seminars, cold calling, and Pay per Click (PPC) and print advertising. They still serve a purpose and should be pursued, but needs to be approached strategically:
- Target which ones to use according to the price point, the maturity of the industry, and the brand awareness of your SaaS.
- Pinpoint your target audience precisely to ensure you are getting in front of the right people. Know who your decision makers are and where they are hanging out. Otherwise, you will spend a lot of money preaching to the wrong people!
- If your SaaS costs $150,000 per year, then you know your decision makers are going to be the C-suite. Focus on audience lists and target LinkedIn, AdRoll, and Facebook.
- If your SaaS provides a solution to a common and highly searched problem, (e.g. document management), then Search and directory placements will work well.
- If your brand has awareness, but there is still a nascent understanding of the problem, then you need to use outbound marketing to create awareness of the pain points your SaaS solves.
Account Based Marketing
Account-based marketing (ABM) turns traditional marketing on its head by starting with the end-goal of determining which target accounts are likely to be good customers and working backward. It is a highly integrated growth strategy where sales and marketing must collaborate closely to create personalized campaigns targeted to each account.
Each account is treated as a unique market. In fact, Gartner research found the current buying cycle has six to 10 people that are directly involved in any purchasing decision, particularly in enterprise deals. ABM's holistic approach in treating each account like its own market and developing multiple relationships across the organization increases the ability to influence buying decisions and speed up the sales process.
ABM is distinctly different from inbound and outbound marketing strategies, but they do rely on and align with both. For example, a piece of content developed for inbound may fit perfectly with the needs of one of your accounts. Alternately, something developed for an account may be repackaged for use in inbound.
ABM requires clear communication and coordination between your sales and marketing teams - at all levels. For example, your outbound specialist isn't part of your ABM team, but they have established relationships and have knowledge of your target account.
This strategy works because your chances for securing and growing these accounts in the long-term are increased by the level of nurturing and personalization your teams have put into them.
Dive deeper with ABM with the ABCs of Account Based Marketing.
Now that we've covered some marketing tactics you should implement, let's dive into how to analyze your efforts.
SaaS products are fundamentally a service, and so it is critical to measure not only the sales journey through the funnel (top, middle, and bottom) but also your post-sales/customer retention rate. While it is important to measure each stage individually (micro-level), you also need metrics that will give you a holistic macro-view of your SaaS marketing efforts.
Four metrics to help you measure overall performance and a unified view of the visitor:
This is one of the simplest metrics to keep track of, but can be misleading as the buyer's journey takes multiple touches. As a result, a specific person metric is more meaningful than just overall traffic. Focus on unique visitors, qualified leads, conversions and current customers. Measuring these indicators in Google Analytics isn't easy, but is possible!
Basically conversion measures the percent of visitors that take the action that you want them to. So, if 5 visitors of a 100 sign up for a monthly newsletter, then the conversion rate of 5%. There are several useful conversion measurements that should be considered. You want to be measuring conversions at each level of the sales funnel - lead, qualified lead, lead conversion, and lead to qualified lead conversion. Lead to qualified lead conversion measures the number of leads that actually turn into qualified leads over time. This is a very important interim step to measure because it provides a measure of the quality of leads being acquired, and the effectiveness of the marketing efforts being undertaken to nurture these leads into qualified leads.
3. Lead Quality:
You have already defined your personas but are you reaching them? You can only answer this by tracking your lead quality. Without measuring this, you may be spending a significant amount of wasted time on unqualified leads that aren't a fit for your SaaS. This can be tracked by lead scoring, or can be tracked using various attributes of your ideal customer (geography, company size, number of forms submitted, etc.)
4. Cost Per Lead (CPL):
Particularly in B2B businesses where the buying cycle can take weeks or months over multiple channels, it is often hard to measure the exact cost per lead. But, you can start simply by measuring the last channel attribution and then introduce more complexity incrementally as you gather more date aver time. Head over to our blog post on this topic to learn more about SaaS marketing analytics.
Four metrics to help you measure customer success:
1. Customer Churn:
Also known as customer attrition, this is the rate at which customers stop doing business with you. This is an important metric in the SaaS industry because it is significantly less expensive to retain customers than it is to acquire them. As such, minimizing customer churn is a key component of what makes a SaaS seller successful. Read more about churn rates.
2. Customer Lifetime Value (CLV):
This is a metric that calculates the amount of profit attributable to a given customer throughout that customer's entire relationship with the SaaS seller. This is vital because it helps SaaS marketers determine how much they should spend to acquire customers, providing a focus on targeting qualified leads and acquiring them at the lowest costs.
Why is this so important? For example, if you spend $10 to get a new lead to sell them $500 of product it may seem like a great deal. But if you only close 5% of your deals, then you just spent ($10 x 20 leads) $200 to get one customer. A clear LTV helps set the maximum marketing budget for both acquiring new customers and maintaining current customers.
3. Customer Acquisition Cost (CAC):
This metric is simply the total cost of acquiring a customer within a certain time period. If you spend $10,000 on sales and marketing this year and acquire 10 customers, your CAC is $1000. While in a startup period you may have a high CAC, over time you want to see this number decreasing.
4. CAC-to-LTV Ratio:
This is the ratio of customer acquisition cost to customer lifetime value. This metric shows the relationship between the cost of acquiring a customer versus the value attributable to that customer. The smaller this number is, the better.
Because customers don't have to commit, SaaS marketers have to focus as much (or more) on retaining existing customers as they do on acquiring new customers.
As we've discussed, there is a specificity to the unique needs of a SaaS company. Having a clear marketing strategy, matching tactics to your stage in the development cycle, and tracking your metrics are all critical to a successful marketing strategy. Marketing a SaaS comes down to knowing your target persona, the price point of the SaaS, the level of awareness there is in the market place, and the type of carrot you can offer (ebook, free trial, industry report and more).
Overwhelmed? If you are like most of us - time-constrained & goal bound, many of these tips may seem out of reach. That's where a marketing agency comes in.
The marketing industry is full of "boutique" or "niche" agencies that focus on doing one type of marketing very well. Types of digital agencies include the following specialties: Social Media, SEO, Website Design, Branding and PR, and Generalist Digital Marketing.
However, just like how SaaS is a specialized business model, SaaS marketing agencies have evolved to meet the needs of SaaS companies. A SaaS marketing agency will be good at generating and converting traffic across multiple channels in integrated campaigns, with a focus on acquisition metrics and goal-driven strategies. A SaaS marketing agency will match your strategies and tactics to an experience-based model of that fits your SaaS product and business model.
Ready to get started? As a SaaS marketing agency, we can jump start your marketing and get you moving in the right direction fast. Contact us to get started.
Not yet ready but want to keep learning more? Stay up to date with breaking news and resources about SaaS marketing by connecting with us on LinkedIn.