“SaaS Marketing” means different things at the various stages of an SaaS company’s development.
Stages that Jason M. Lemkin, Founder/CEO of EchoSign, helped to define are by ARR of:
If you’re still in the early stages, this really isn’t the resource for you.
Yes, there are some similarities and crossover between growth hacking and the insights outlined here, but this guide won’t be focusing on those aspects.
If you are in the demand gen or the beginning brand marketing stages, then it’s important that you continue reading.
There are many books on this subject. We know and fully support their work, as they’re very good at the outbound sales game, but this resource will represent your guiding star for SaaS marketing.
What SaaS Marketing Isn’t
SaaS Marketing ≠ Growth Hacking.
Source: Google Trends “Growth Hacking”
Sean Ellis coined the term “growth hacker” during his days at Dropbox and was praised for the now-famous referral program which was labeled as “growth hacking.” As Wikipedia defines it…
“Growth hacking is a process of rapid experimentation across marketing channels and product development to identify the most effective, efficient ways to grow a business. Growth hacking refers to a set of both conventional and unconventional marketing experiments that lead to growth of a business.”
Again, growth hacking has grown in popularity but doing Content Marketing, SEO, SEM, or social media marketing isn’t “growth hacking.” It’s simply marketing. The problem is that some marketers and startups don’t understand that.
Getting back to it.
This is not about growth hacking. This is about sustainable growth with SaaS marketing.
Predictable Demand Generation
With a well-oiled and predictable demand-generation engine, marketing can take over as a primary growth driver.
Yet, you won’t get there without the right strategy.
SaaS Marketing Strategy
When it comes down to it, SaaS marketing begins, like any other marketing, with a documented strategy.
Marketing without strategy is equivalent to driving quickly in thick fog. Let’s just say it should be avoided. With a proper strategy in place, you’ll be able to play the short game AND the long game, and play both to win.
You’ll know WHAT you’ve set out to achieve, as well as HOW you’ll go about achieving it.
Let’s see what you need to include in an effective SaaS strategy.
Many SaaS companies think that because they know the industry(ies) they serve that they know whom they’re selling to. But that isn’t a deep enough dive into the question.
Who exactly are you trying to reach with your marketing?
Are you looking for:
- A particular position within a company?
- End-users or decision-makers?
Once you’ve determined the general audience, it’s important to create very specific buyer personas that you’ll use to guide all future marketing activities. Include information like:
- Position at company
- Type of company
- Buying habits
- Problems they face
- Ways they typically overcome them
- Their buying journey (path in the marketing and sales funnels)
SaaS marketing, whether it’s B2B or B2C, is one of the best business examples of how to use sales objectives to define goals and constrain the effort to achieve the goal with a measurable CAC (Customer Acquisition Cost).
The importance of goals has been reinforced by experts time and time again, but the types of goals you’ll be setting deserves a bit of clarification.
Are you familiar with SMART goals?
Your goals should be clearly defined and easy to track. You must also be able to easily determine what actions should be taken to achieve them. Finally, they must be relevant to your success, and able to be completed within a predetermined timeframe.
Understanding True Profitability
How profitable is your SaaS marketing strategy proving to be?
It’s especially important for recurring revenue models to create a clear understanding of what profitability looks like. Many find themselves spending far more on customer acquisition than they can expect to see in the first several months.
While some naturally shy away from allocating such extensive resources to signing a single buyer, it’s up to you to determine whether or not that spend pays off in the long run.
Understanding whether or not your CAC will lead to profitability means getting clear on how your churn rate affects CLV.
Optimizing Your Website Design Triggers
Raising Prices vs. Lowering Them
If sales are slow or heading south, you may naturally decide to test discounts to see if you can drive more conversions. While discounts can be a great way to increase the number of signups you see each month, we urge you to test raising your prices as well.
Where low prices work well to sell discount products, price is often indicative of quality to shoppers of higher end items, especially in the tech sector. While each market will deliver unique results, we urge you to test raising your prices before lowering them. You may be surprised with your results.
Use Visual Cues to Highlight Your Most Profitable Items
You know which of your products represent the “bread and butter” of your profits. As such, it’s important to highlight those items with obvious visual cues built into your site. What visual cues are we talking about?
Try including things like:
- Contrasting colors
- Bolded text
- Solid color boxes
- And more…
Descriptive Language in Pricing Plans
Your pricing page is where you tell your visitors exactly what they get for their monthly/annual investment. For this reason, it’s imperative that you help them understand the value they’ll receive from each level of your product.
Rather than only outlining the features of your product, include the benefits of each. Do your best to relay the most information in the fewest words possible.
Trust Signals All Over (aka Social Proof)
Another must-have inclusion is the trust signal. You can talk (or write) about your product until you’re blue in the face, but it’s unlikely to have the same impact as a glowing testimonial. Let your happy customers do the selling for you by strategically including their reviews on the various pages of your site.
Proudly display any well-known companies that are using your product(s) on your site as well. If a brand like theirs trusts and appreciates the benefits of your product(s), it’s likely that others will too.
But that’s not all. Consider adding some of the following trust signals to help buyers feel confident about choosing your software:
- Testimonials from ordinary users
- Testimonials from well-known or power users
- Logos of well-known companies who are customers
- Credit card symbols
- BBB membership symbols
- TRUSTe certificate
- Spam guarantee
- Money-back guarantee
The more trust you can display, the more you’ll be able to earn from your prospective buyer.
Making the Most of Free Trials
The competition is fierce in the SaaS market. There are probably dozens of products like yours available. The key to customer acquisition for most SaaS companies is the free trial.
Assuming your product is a good one, once a user becomes familiar with your interface and learns how to use your software to help them perform tasks, they are far more likely to convert into a paying customer.
Ready for something a little nutty?
Only 44% of SaaS companies offer a free trial.
Free trials are widely considered the most powerful SaaS marketing tool. The cost is minimal and value provided is off the charts. Very few other industries offer customers such a hands-on testing of their products before a purchase decision has to be made.
So how do you make the most of your free trial? Start with the following structural components:
No Credit Card Required
Reducing friction, lowering the barrier to entry, and making it easy for people to sign up are the most effective ways to get more trialists into your sales funnel.
Credit card information is the number one barrier to entry when it comes to signing up for a free trial. In fact, evidence seems to support the notion that submitting credit card info can negatively affect a trialist’s perception of the experience. Rather than freely using the trial, they are more concerned with cancelling their trial before they are charged.
A study by Totango found that:
- With trials requiring a credit card, the average visitor-to-retained customer conversion rate is 0.6%.
- With trials not requiring a credit card, the visitor-to-retained customer conversion rate jumps to 1.2%.
- SaaS companies that allow trialists to sign-up without a credit card earn twice as many paying customers from their free trial.
To make it clear that your free trial doesn’t require a card to sign up, use words like:
- No obligation
- No credit card required
The pros and cons of offering a “freemium” version of your product are discussed in a later section of this guide. However, when it comes to a limited-time trial, don’t withhold anything from your trialists.
You only have a few weeks to show your trialists how your product is better than your competition. You want them to experience the full benefit potential of your software, so let them see the best of what you have to offer.
Optimal Time Span for Free Trials
Forty-one percent of SaaS companies that offer a free trial choose a free trial length of 30 days, the next highest being a 14-day trial (18%).
Because they’ve found this to be the most effective trial length when it comes to converting trialists into paying customers.
Market Heavy Once a Trial Is Active
Once you’ve converted a new trialist, it’s SaaS marketing time! Lay it on heavy, emailing regularly with valuable information, tips on making the most of their trial, and any special offers or promotions you may be running.
Study CCAs (Common Conversion Activities)
One of the most important and under-tracked metrics in the SaaS marketing game is the CCA, or Common Conversion Activity. A CCA is something that all or most paying customers do during their trial of your software.
If you can distinguish what your trialists find most exciting or helpful, then you can optimize your product around showcasing those functionalities, design features, etc. Your goal is to put the things that get trialists to convert into paying customers front and center, showcasing what makes your product worth the investment.
Consider Pros and Cons of a Freemium Version
The freemium concept entails offering a scaled-down, feature-withheld version of your product for, you guessed it, free. The pros of this type of offer are clear. With a virtually non-existent barrier to entry, signing up freemium members is easy. Promoting a free product can drive far higher conversion rates. The theory is that once users get a glimpse of all your product is capable of, many will want to upgrade to a “premium” paid version to take full advantage of features unavailable in the freemium version.
Freemium users don’t always generate ideal results. Using NPS you may find that those who buy first actually receive greater value since they get the entire product offering and thus rate higher on NPS surveys. This is something to consider when deciding whether or not a freemium version is right for you. As with any marketing action you take, test the results and make your decision based on the data.
Inbound marketing is one of the most effective modern marketing methodologies, and many of the most successful SaaS companies already deploy highly profitable inbound strategies. Inbound marketing is an excellent way to invest in the long-term success of your business by creating an effective, predictable lead-gen engine.
One of the best ways to get started with inbound is with an SEO-optimized blog. We discussed the content marketing advantages SaaS companies have thanks to the information they collect in their various industries.
Use that industry information to write blog posts that help your prospective customers solve problems and answer questions. It’s the perfect way to begin building a relationship with the people that could one day buy from you. Creating optimized blog posts is its own topic and is a bit beyond the scope of this post, but read our Blog Strategy post to learn everything you need to know to generate successful blog content.
Tools, Templates, Downloadables/Lead Gen
Blog content can help get people to your site, but 94% of them won’t be ready to buy. Instead, work to earn their contact information. One of the best ways is via downloadable offers. These can come in the form of ebooks, checklists, toolkits, templates, and anything else that can help your audience.
Work to create something the exceeds the value of your blog post, acting as the second stepping stone on the path to a sale. Whatever you create, it should be valuable enough for people to trade their contact info for it. Also, these offers provide the perfect opportunity to give your leads a sense of what it would be like to work with your company.
At Uhuru, we like to tell people to create something so valuable and helpful that they could sell it, then to turn around and give it away for free.
SaaS Email Marketing
Once you have a lead’s contact information, continue to shower them with valuable content. Blog posts, case studies, white papers, and additional downloadable offers are a great way to showcase your brand’s industry expertise.
You can also sprinkle in marketing/sales emails to help drive conversions. If you have a special offer, be sure to include it in your automated email sequence.
While this tactic isn’t a part of traditional inbound marketing, product integrations and collaborations are a great way to generate brand awareness and get people curious about your company.
Working to make your product compatible with others can go a long way to making a prospect’s decision that much easier. If they see that your platform works well with something that they’ve already learned and integrated into their systems, yours will be more appealing.
Keeping Existing Clients Happy
SaaS marketing typically revolves around new customer acquisition, yet in many cases, little attention is paid to the customers once they’ve signed up. It doesn’t take much effort to see why churn is one of the greatest issues facing SaaS businesses.
All of your customer engagement resources can’t be entirely focused on SaaS marketing. Instead, try putting some serious thought into how you can best keep your existing customers happy and renewing month after month.
While customer service is rarely viewed as marketing, financial success in the recurring revenue business depends upon keeping customers around long enough to start seeing a profit. After all, happy customers make for easy upsells and easily translates to inexpensive. See where this is going?
86% of SaaS companies label “New Customer Acquisition” as their highest growth priority when it comes to and available funding executive support
- The median cost for a SaaS company to acquire $1 of new customer revenue is $1.18.
- Upselling existing customers is 4x less costly than acquiring new customers ($0.28 to acquire an additional dollar of revenue).
- Retaining existing customers is 9x less costly to acquiring new customers ($0.13 to acquire any additional dollar of revenue).
Investing in the continued revenue from your clients is effectively marketing to them post-purchase. Plus, the opportunities for upselling your existing user base are too good to ignore. Use a small portion of your resources to keep your customers happy and you’ll find more profits in their upsell.
Pro Tip: Not only does this type of customer service keep existing clients around longer, it builds a network of brand advocates and supports them for sharing your product. According to Jason M. Lemkin, Founder/CEO, EchoSign, when you reach an ARR of $10-20 million, your business will be able to grow exclusively on leads generated from within your business. Start putting these processes into place now.
An easy way to show your clients that you care is to keep in regular contact via email. Send surveys to new and long-term users alike to determine where you can improve, both in your product and with your customer experience as a whole.
Include simple CTAs at the bottom of your emails asking important questions like, “Are you happy as an XX customer?” or “Would you refer XX product: Yes or No?
Each of your customers is going to prefer providing feedback differently. Make it easy for people to deliver small bites regularly. Give others the chance to do it all at once with full-blown surveys. Incentivise your surveys by offering something valuable for their participation. It may seems unnecessary, but the more you can understand about how your current users feel, the better you can optimize their experience and that of future customers.
Early in this guide we talked about SaaS being a service industry. You’re not just selling a product that your users can walk away with and use without any support. No matter how user friendly, how streamlined your interface, every customer is going to need to contact support at one time or another.
That’s why it’s important to be there when people truly need you.
You’re selling a product that was created to enhance the way people operate their businesses and live their day-to-day lives. If they encounter a problem, your being there to help them solve it could mean the difference between their most profitable day of the month or an operational disaster.
Being a technology company, integrating high-end support tactics will be easy. Your support strategy will be built around the industries you serve and the type of support your customers require.
Take the time to determine when most of your support issues come about and how urgently they need to be addressed. If your customers need in-the-moment support to handle issues facing their fast-paced business, live chat or instant phone support may be necessary.
Even if the issues facing your customers are less pressing, speedy support is still highly recommended.
Do you do business globally?
You’ll need to have support to handle issues facing your customers of different languages and time zones. Don’t leave any segment of your user base hanging or you’ll see them begin to churn when issues arise.
What Makes SaaS Marketing Unique?
Fundamentally, most of the strategies and tactics are simply marketing, but there are qualities that are more common when executing marketing for SaaS companies.
Outrunning the Recurring Revenue Dilemma
The dilemma most SaaS marketing efforts face is acquiring enough new clients to outpace the cost of customer acquisition, the depletion of their funding, and the churn of their existing customers. Rather than large sales, SaaS companies see small recurring payments from their clients.
Easy/Good to Give Away Samples/Trials
SaaS Marketing is made so much easier by the product being sold. The fact that free trials can be given out at virtually zero cost to the business provides an opportunity that most other verticals simply don’t see.
You can give away a full-featured taste of the benefits you can provide to your customers, then withdraw those benefits at the end of a predisposed period. Talk about hook, line, and sinker!
Shorter Sales Cycle
While the recurring revenue dilemma discussed above can be difficult to overcome, there is some light at the end of the tunnel. Where many B2B sales cycles can last several months or even years, the SaaS sales cycle is much shorter.
Content/Information Is Your Most Important Asset
One of the most unique SaaS marketing assets we’ll discuss here is made possible by the product itself. Many of the softwares being sold today gain massive insights into the inner workings of the industry(ies) they serve.
SaaS businesses are curators of the information they gather from their software and can use that to participate in some of the most effective content marketing around. Use the facts and figures you discover about your industry to create blog posts, PDF guides, tips sheets, stats, and other types of content that helps your target audience solve their problems.
Most Customers Are Long Term
Due to the longevity of your customer engagements, you’ll need to understand your CLV better than most. Having a better grasp on your customer’s lifetime value will allow you to accurately identify where your CAC needs to be and whether or not adjustments need to be made to your SaaS marketing strategy.
You’re Selling a “Service” to the Fullest Extent of the Word
Another unique factor to consider about SaaS marketing is the fact that the product you’re selling is actually a full-scale convenience service.
It’s that last “S” you need to be paying attention to. The service part.
Your product is focused on improving a part of your client’s business, the rest of your business needs to be there to back it up.
- The software product being sold is really a full-scale convenience service. It must be an integral part of sales, support, etc.
- Create video tutorials to help customers overcome issues
Top 7 SaaS Marketing Mistakes
Ignoring Competitors Actions/Changes
You can only hope to stay relevant if you position your brand ahead of the competition. Rather than existing in a bubble of ignorance, continually analyze what your competition is doing and how people are responding to those changes.
Use the behaviors of other brands and user reactions to determine how to optimize your product(s).
CRO, or conversion rate optimization, is likely the most important improvement activity SaaS companies can undertake. Your website is your number one sales and marketing tool. However, your visitors may get stuck, lost, or distracted in various places on your site, which can make for a serious decrease in conversion rate.
It’s vital that you analyze user behavior regularly to recognize patterns, understand user habits, and identify any areas of friction that may be hurting your conversions. Identify small changes that you can make to your interface will help them to complete your desired user action.
Focusing on Quantity of Leads vs. Quality
Driving loads of traffic and leads may sound like a good thing, but if they’re unqualified you may be wasting your time (and precious resources). One thousand poor quality leads mean more work for your marketing and sales departments and could be less valuable than ten quality leads.
No Written Digital Marketing Strategy or Detailed Plan
In case we didn’t fully emphasize the importance of strategy before, let’s make it clear. Marketing without strategy means not fully understanding your goals, what you’ll do to achieve them, and how to measure their success or failure.
Without these things, improving your marketing is nearly impossible.
Focusing Only on Decision Stage (Schedule a Demo CTA)
Due to the effectiveness of free trials at generating leads, most SaaS marketing strategies focus on a single stage of the buyer’s journey. What you may not realize is that you’re likely missing out on a massive piece of the pie.
Speaking to a General Audience
There is no one-size-fits-all in marketing. Trying to reach everyone means reaching virtually no one. The majority of SaaS companies are trying to reach too broad a market to generate any real traction.
Focus your efforts and start by speaking to a very specific segment of the market you serve. Use relevant language and your understanding of the industry to connect with people on a deeper level.
No Digital Sales Funnel Clearly Defined
In SaaS companies where sales and marketing are distinct roles or departments, the typical flow is that marketing creates demand, and the bottom of their marketing funnel is the top of the sales funnel or pipeline.
A digital sales funnel is a system automated or structures your sales process.
Pro Tip: A short form version can be written out like this: ads/banner ad/affiliate traffic/JV traffic, etc -> landing page (aka conversion funnel) -> Lead Capture (sales offer/demo/webinar) -> up sell -> down sell
And as always, various emails and retargeting campaigns need to be done in between to get people to keep moving forward in the sales process.
Effective SaaS marketing is highly specialized, making it all that much more important to understand what you’re dealing with. Let the contents of this guide help you navigate the process for marketing your business during its demand-gen phase and you’ll find your brand poised for successful organic growth.
Remember, successful SaaS marketing is reliant on a clear understanding of your internal economics. Get clear on your current CAC and CLTV and you’ll be able to market at the highest level of efficiency.
Here’s to your success,