What is SaaS Marketing?
SaaS stands for "Software as a Service." And that refers to a company that builds and sells software in cloud-based applications.
SaaS marketing specifically focuses on promoting and acquiring leads for these intangible products, which require regular updates and added functionality to continually prove that their subscription service is worth the monthly fee.
Marketing something with a goofy name, no physical presence, and doesn't make sense to the average person, is indeed a tough job.
But how awesome is it to have software that sells itself?
We've made SaaS marketing more complicated than it really needs to be. Let's break down everything you need to know about SaaS marketing, from strategy to execution to drive demos and subscriptions ASAP.
Some popular examples of SaaS companies include:
- G Suite (Gmail, Calendar, Hangouts, Google Drive, Sheets, Docs, etc.)
What should be your current SaaS marketing Strategy?
You're a SaaS founder; you've got a great idea, technical expertise, and you've been working really hard to handle the competition. And now you're looking for paying customers.
You've been told that it's a must to have SEO; you've heard that you should use social media, and others have told you to offer a free trial. So what should you do?
Before you jump into marketing your SaaS, you need to go back to the basics of any marketing plan made up of strategies and tactics.
Strategy vs. Tactics
A strategy is an overall approach to achieving the goals and objectives of your business; it is specific and has concrete targets. Tactics are the actions you take to achieve your goals. These are chosen based on their ability to deliver the highest ROI for specific strategies. And it is common for a strategy to require multiple, interconnected tactics over time.
But today, we're not getting down into the weeds of comparing tactics; we're talking about the primary strategy that makes up your plan.
The main focus of your marketing strategy depends on the stage that your company is in.
- Build your credibility as an expert in your field
- Brand awareness
- Ensure the product/market fit
- Determine your actual costs to acquire a lead and customer acquisition.
If you are a startup/growing SaaS with a proven product/market fit, then your strategy focus should be on:
- Optimize the channel to expand it along with your persona and message rapidly.
- Maximize the reach to explore new channels while controlling acquisition costs.
- Reduce acquisition costs by analyzing traffic, conversion, and lead quality to identify and reduce costs.
- Increase lead conversion rates by improving on-site and landing page experience.
- Brand amplification to stay on top of mind for your target customers through highly targeted PR.
7 tactics to include in your SaaS marketing strategy to grow faster in 2021
#1 Create content your audience wants to read
Most SaaS companies attempting to reach prospective buyers know that content marketing is one of the best ways to go. Potential customers are already searching for a solution for their pain point online. Don't simply create a few blog posts. Instead, take a different and strategic approach to answer the main questions in the SaaS buyer's journey. This includes churning out consistently high-quality, persona-driven content that offers value in the first place and is keyword optimized.
Wistia's, a video platform, is a perfect example of this.
An entire section of their website is dedicated to tutorials on every part of the video creation process. This is likely much more engaging and encouraging for users to invest in a video than even the most well-written blog post on the subject.
To be able to do so, you must have already known your ideal customer's questions and researched their pain points, and created a that helps them solve their specific problem.
#2 Offer free SaaS trial to boost acquisition
SaaS companies have a major advantage over traditional business models, which is offering free trials when it comes to boosting acquisitions and increasing recurring revenue. A sports equipment store, for example, couldn't just offer prospective buyers a free 30 days trial without running into a logistics nightmare for shipping and return costs.
While, for a SaaS company, all this hassle is not applicable. Instead, it provides you an opportunity to show off your products and your customer support as well. If your product is the right fit, you'll have paid subscriptions happen with no additional efforts.
For this reason, you should take advantage of this relatively low barrier to entry and feature a trial offer throughout your marketing materials.
The advantage doesn't just end here. Even if the user hasn't subscribed, you'll have the opportunity to reach out again and get priceless insights and feedback for your product, sales, and marketing teams.
#3 Optimize your pricing
Converting trials into paying customers takes a huge part of marketing campaigns and shows how pricing and marketing strategies go hand in hand in SaaS models.
SaaS companies who experiment and improve pricing have six times more LTV/CAC ratio than those who don't.
From a cash flow standpoint, having annual subscriptions is the best scenario to establish a steady flow of revenue for your business. However, the most effective approach is not always obvious for customers. They're more likely to choose offers that provide something for "free" over discounted ones as they don't naturally understand percentages. So switching subscribers from a monthly plan to an annual plan is more successful when offering a "free month" instead of a % discount, even if this is technically a better deal.
If you see this as a minor semantic difference, it significantly impacts earning valuable subscriptions.
#4 Incentivize referrals
Give users a reason to make referrals, and you would be surprised at what they would do for a free month of service. Considering that 82% of Americans seek recommendations from friends and family, referrals are super effective in reaching new customers. Apply this marketing strategy for your business and encourage your customers to spread the word and be compensated accordingly.
Evernote provides users with "points" that they can use toward their subscription costs.
For every three friends a user refers, they get three months of free Evernote Premium.
#5 Simplify the sign-up process
Ensure your sign-up process is as quick and straightforward as possible, especially if you are offering a free trial. Remove unnecessary upfront steps that can derail the process since the customers may not fully commit to your product.
#6 Refine call to action
To get more customers to try or purchase your product, you'll have to ask them to do so by clarifying the next steps you want your site visitors to take. Ensure the CTAs are clear and visible in all the right places on your pages.
#7 Leverage SaaS review sites
Potential customers are those who are already looking for solutions to their problems, and mostly on review sites. Make sure you are listed, and your solution is well represented on websites like Capterra or G2 Crowd. Some sites offer premium features to spotlight your SaaS platform, so reach out to the site's editorial team with your specifications and value proposition.
What should be your execution SaaS marketing Strategy?
Do you offer a free trial, freemium version, or a demo?
A SaaS company is expected to offer a Free Trial, a Freemium product, or at least a demo. But, each of them has benefits and disadvantages, and one model may be a better fit for your company over another.
Allowing your visitors to test out your product using their data will help them figure out if it meets their needs and if it's worth the money. They work best in a niche market, especially when addressing specific problems, and result in a conversion rate of at least 30%. Free trials can easily soak up resources, so SaaS businesses must pay close attention to conversion costs and ensure strong communication during and after the trial to keep users engaged.
A freemium model helps users enter your product at a no/low cost, check how beneficial it and become comfortable with it before committing to higher and long-term costs. In addition, SaaS brands can advertise or sell compatible products, another way to increase revenues.
The challenges to a freemium model include:
- Running costs can be high
- Users may not always see the benefit of upgrading
- Return on Investment (ROI) requires a huge volume
Provides users with an opportunity to connect, establish trust and determine if your product is the right fit. Many formats could be leveraged, like Facebook Live, Webinars, or 1:1 videos.
How to Market SaaS Products?
Putting together a top-tier SaaS marketing plan means reaching customers and showing them a subscription service is worth the monthly investment. There's no single way to do that, but a combination of inbound and outbound tactics that have proven to work over and over again.
Let's break them down.
Optimize your website conversion rate
The website is your company's shop window that cannot just look good, but it has to convert leads. Either by increasing the free trial sign-ups, demo booking, or downloading content. However, a common misconception is that getting greater results means increasing your spending. But, that's not always true.
The key to optimizing your website's conversion rate is by identifying what drives the lead generation activity and carving up your budget to generate web traffic and stronger leads.
What does that mean?
Instead of just offering a free trial, why not split different test lengths of these trials to identify which one gets the highest clicks and conversions? Also, why not switch up the CTAs on each page of your website until you figure out the one that gives the highest traction? Why not also experiment with the content on your pages, simplifying the user journey?
Maybe this would generate better results for you than overwhelming users with multiple options? Try removing few calls to action and re-designing the website to focus on just one to increase effectiveness and usability.
Content is Key
Convey your expert knowledge and the importance of your product through various SaaS marketing automation formats. Use email marketing and social media, as well as blog posts, webinars, trade show materials, podcasts, etc.
Yes, SaaS email marketing might seem old-school, but it remains integral to SaaS marketing for making frequent, one-on-one touchpoints with customers. It gives your customers a nudge and makes sure that someone is satisfied with your product.
Here are some typical emails that most SaaS companies send on a regular basis:
- Onboarding emails (for demos)
- Feature notification
- New content (webinars, blog posts)
We can't stress enough the importance of SEO and organic reach.
In his research about the best traffic sources for SaaS, Mike Sonders illustrates that organic traffic accounts for up to 68% of leads and traffic for top-tier SaaS companies. Users are increasingly turning to a quick Google search when looking up SaaS products. This is why many companies always try to get featured on "best of" lists besides creating their own SEO content.
Webinars are cited as the best method for generating high-quality leads. They are all the rage right now for driving demos, demonstrating your product, and promoting thought leadership. They can be presented live or downloaded on-demand, and replays can be uploaded on Youtube to help build your channel.
Use quizzes, animated infographics, and GIFs to help readers get interactive and consider gating them with a form to collect contact info. This blend of gated and freely accessible content is critical in SaaS marketing strategies.
Present in-depth knowledge like Q&A, how-tos, case studies, videos, ebooks, and white papers on your website not only to prove your worth to new customers. But to show current customers, your guiding principle should is of a high level of service. Offer exclusive deals, valuable content, engage with them across various channels and keep them informed of updates.
PPC and social ads
SaaS digital marketing like social media ads and Google ads boost visibility and help in outranking competitors via pay-per-click advertising. These campaigns are instant and don't require the waiting game involved with SEO. Instead, they help SaaS companies avoid social algorithms and directly reach relevant customers.
Checklists, webinars, and case studies are ideal for social ads.
One of the SaaS marketing success stories is that of BigCommerce. They saw a 3x increase in trial conversions from their Facebook ad campaign.
Facebook specifically allows SaaS companies a "second chance" at winning over bounced users from a demo or a landing page.
Wrap up on how to optimize your SaaS marketing:
- Make sure your sales increase always adds value by personalizing the customer experience.
- A clear sales copy is super important when communicating with your customer through your blog, email, or sales page. It can be humorous, serious, or corporate, as long as it's well-understood.
- Use multiple channels to connect with your customers and develop relationships with your audience. To do this effectively, find where your audience is most active. You can first contact a person by email, then build on this by getting them to follow you on social media, or you can follow them online with pay-per-click retargeting ads.
- Simplify your funnel and add complexity based on performance to ensure that the fundamentals of your funnel operate effectively first.
How to review SaaS marketing metrics?
Why is it important to establish KPIs in SaaS companies?
When a sector is saturated, has rapid growth, and a lot of competition, only a few SaaS companies can succeed. We have compiled the most important KPIs that a SaaS company should know and understand to keep up with performance and profitability.
Unique monthly visitor
It is the number of unique users who visited your website in a specific month. Those who visit the website several times a month will not have all their visits counted. This metric is perfect to know the effectiveness of your top of the marketing funnel. You can see how users act once they are on your website:
- Average time on the page
- Number of repeated visits
- Number of pages visited
- Number of comments
Registrations and subscriptions
This metric is arguably one of the most important for any SaaS business. If your offer a free trial or a freemium plan, your main goal is to get as many subscriptions as possible.
Product qualified lead (PQL)
This metric is equivalent to marketing qualified leads MQLs.
This metric shows the users who have registered, have used the product, and meet the requirements to become paying customers of the platform, which companies rank potential customers based on their product usage.
To qualify and measure potential customers, you can use factors such as time spent on the product, the number of features used, or how often it has been used.
Qualified lead speed rate
Once you know the conversion rate of your potential customers, you must define how many of them you need each month.
Calculate the Number of new leads you need to reach your monthly income goal. This is important because all qualified users who sign up are potential customers who may end up being paying customers.
How to calculate it?
(Qualified Leads - Qualified Leads last month) / Qualified Leads last month
Customer churn rate
Customer churn rate measures the number of customers who have canceled their subscription in a given period. This is a key metric since most SaaS companies are subscription-based.
A high turnover rate means that you are not retaining your customers, and you must analyze why.
In addition to the customer churn, it is important to measure the revenue churn. If you offer different subscription plans, you may be interested in retaining more customers as the impact of canceling their subscription may be more significant.
Customer lifetime value (CLV)
The customer lifetime value or CLV is the average total amount of money that a customer pays during their subscription.
This metric is calculated in 3 steps :
- Calculate the customer life rate: 1 / subscriber loss rate
- Calculate your average revenue per account (ARPA): total revenue / total customers
- Calculate CLV: customer lifetime x ARPA
This is a fundamental metric for startups to show investors the value of their company.
Cost of customer acquisition (CAC)
The CAC shows how much you spend money to acquire each customer. If it is greater than the profit, it means you are losing money.
To calculate the CAC:
Total sales and marketing expenses / total Number of new customers
A profitable business model: CAC<CLV
A nonprofitable business model: CAC>CLV
Monthly Recurring Income (MRR)
This is a key KPI that shows recurring revenue with some stability, typically on a monthly basis.
The easiest way to calculate MRR is by summing all your income from your paying customers per month by using a concrete formula:
MRR = Number of paying customers x Your average income
Months to recover the CAC
This shows the time your SaaS company needs to recover the investment made and start generating a return on investment.
How is it calculated?
CAC / product of monthly recurring revenue x gross margin
Customer interaction rating
This shows the current status of the customer relationship with your company which gives you insights into whether he is a fixed client or is there a risk of canceling the subscription.
How can you measure this metric?
Create a list of information to measure customer satisfaction with the software you offer and assess the status accordingly.
- Frequency of use
- Login frequency
- Average time spent using the software
- Achieved goals
Number of incidents
It is inevitable for any SaaS company to have a ticket system to receive complaints, requests, or suggestions from users.
Staying attentive to the ticket volume and measuring how many users are requesting help or facing issues is essential for rating your progress.
Average time per resolution
This KPI is the average time needed to solve a ticket since it is useless to have a good response time if the time it takes to resolve an incident is high.
How can you calculate it?
Average resolution time = total of all resolution times/number of tickets resolved.
Number of active users
This indicates the number of active users using your platform, which indicates how good our database is.
There is no specific metric to measure the number of active users, as each company has certain determining factors to consider a user doing something that has a value. Here are some examples:
- Usage patterns
- Usage frequencies
- Profit combinations
Each company establishes certain determining factors to consider an active user when they do something that has value for the company.
This indicates the percentage of customers who have maintained their subscriptions for a specified time.
A high retention rate indicates positive customer experience and satisfaction.
Calculate the monthly retention rate by comparing the month's renewal of customer subscriptions with the previous month.
SaaS marketing FAQs
How do I start SaaS marketing?
- Increase your brand awareness
- Perfect your website SEO to increase organic traffic
- Focus on high-quality content
- Offer referral incentives for subscribers.
- Work on affiliate or partnership marketing with more established companies
- Take your competitors' weaknesses in customer support problems and make them your strengths.
- Treat your business as a brand, not just a service provider.
How is SaaS different from marketing?
B2B SaaS marketing is challenging, to say the least, and quite different from every other type of marketing strategy that exists.
- You are selling a service, not a brand or a product.
- SaaS clients are loyal and long-term, and customer retention is the key to success here, more so than in any other area.
- Content is king in SaaS marketing; the majority of SaaS is designed around the idea of providing information that leads customers to the actual product.
How do you promote a SaaS product?
- Develop a strong social media presence
- Build credibility through targeted and personalized email marketing.
- Creating and distributing high-quality content to attract and retain an audience.
- Showcase your software to online directories, which improve your website's SEO and increase brand awareness.
- Attract new customers by offering free trials
- Offer a referral program that provides discounts for both your current customer and any new customers they bring in.
To know more here is an example regarding how to promote an online with email marketing.
What is B2B SaaS?
B2B SaaS has goals of selling their service to as many users as possible, just like other SaaS companies, but have very different methods of doing this due to their customers' needs.
B2B SaaS marketing is aimed to solve an issue or help companies in their development instead of individuals. Also, businesses investing in services look at how this service can improve their ROI.
Grow your SaaS company with Think Orion
Think Orion knows B2B and B2C SaaS. Our clients include some of the leading brands in the world from organizations like Gartner, Forrester, and many more to increase online leads, boost sales and advance them along the digital maturity spectrum.
Is your business looking to join this list? To get there, it takes a solid marketing strategy and a trusted SaaS marketing agency to analyze and act on your marketing performance. Get in touch today to see how we can potentially help you.
SaaS marketing vastly differs from other industries, but it's an excellent way to boost your productivity and conversion rates.
Take the tips and tactics highlighted above as the foundation for your SaaS marketing plan template, no matter what industry you're in. Analyze and experiment to figure out what works best for your customer base and make tweaks over time.