Last Updated on April 22, 2022 by Tracy Jackson
SaaS marketing is unlike any other type of marketing.
For starters, a SaaS company needs long-term customers. And with the abundance of competition that exists, customers are spoilt for choice.
Customers churn through 30% of SaaS apps, abandoning them when they find apps with more features and better functionalities.
A SaaS product isn’t a one-off sale. It requires constant improvement, exceptional customer service, and a trailblazing SaaS marketing strategy.
With the increase in the number of SaaS companies that exist, there is much to be learned about SaaS marketing tactics that are on-trend. It’s up to you to focus on the strategies that suit your SaaS business to sky-rocket your SaaS sales.
Read on to learn more about what makes SaaS marketing unique, the different tactics you can use in your business to improve your conversions, and more importantly, your customer retention rate.
Disclaimer: If you buy something using the links in this article, I may receive a commission at no extra cost to you. Know that I only promote stuff that I use and trust for the sake of my readers and the reputation of this site.
What is SaaS Marketing?
A SaaS (Software-as-a-Service) product is sold as a subscription to users who can access it through the internet and a web browser. It is cloud-based and is usually updated with added functionalities very often.
Unlike software that needs to be bought and installed, a SaaS product needs to be improved continuously so that customers do not abandon it and move to another product with better features.
SaaS marketing involves the promotion and acquisition of leads for membership-based (SaaS) products.
There are challenges to SaaS marketing. Each customer’s experience with the product is unique.
This makes it hard to cite case studies for the purpose of marketing. SaaS marketing must, therefore, comprise other strategies – such as content marketing.
This study on SaaS content marketing states that 36% of SaaS companies publish educational blog posts designed to solve the problems of the reader.
In today’s post, let’s dive deeper into why SaaS marketing should be unique and target potential customers at all stages of the marketing funnel.
Why is Marketing For SaaS Different?
SaaS products aren’t tangible. That makes it very challenging in terms of marketing.
Unlike a physical product whose benefits are easily visible, a SaaS product is way harder to sell.
You can’t exactly show your audience how your SaaS tool will help them in their business, or why they even need your tool in the first place.
And the greatest difference is that you are not after a one-time purchase. SaaS companies rely on monthly or longer-term subscriptions from customers.
The SaaS sales cycle has three stages:
Stage 1: Acquisition – Getting new users to sign up for your SaaS product
Stage 2: Conversion – Converting these users into paid customers
Stage 3: Retention – Getting existing customers to renew their SaaS subscriptions for your product
Out of these three stages, SaaS marketing should focus most on conversions (monetization) and retention. That does not mean customer acquisition should be given any less importance.
What it does mean is that although customer acquisition directly impacts SaaS growth, it certainly does not overshadow conversions and customer retention.
A study by Price Intelligently showed that improvements in customer retention or monetization can accelerate growth by 2-4x more than customer acquisition.
Your SaaS marketing strategy should balance all three to be effective.
SaaS companies should focus on acquiring and retaining long-term customers. That means significantly reducing churn.
Free trials or ‘freemium’ models of SaaS products are often the means by which companies acquire new customers. Once these customers are sold by the functionalities of the SaaS product and exceptional customer onboarding and service, the churn rate will automatically reduce.
Another way in which SaaS marketing differs is that the customer journey is long and complex. Not all your potential customers are aware of your product and how it could help solve their problems.
Gartner notes that the abundance of top-quality information has made it tough for customers to decide on what to purchase.
As a SaaS company owner, you’ll soon discover that the competition is brutal. Every other company in your space is out there fighting for the customer’s attention with the best features, the most exceptional customer experience, and outstanding content.
That could be an opportunity for you to scope out the best features and marketing strategies to integrate in your SaaS business.
What Tactics Should You Include in a SaaS Marketing Strategy?
1. Up Your SEO Game With Content Marketing.
57% of B2B marketers say that SEO (Search Engine Optimization) greatly impacts lead generation.
An effective SEO strategy helps SaaS companies boost their credibility and online visibility. This is huge in terms of building trust with your target audience.
Other marketing tactics such as paid ads will take you longer to gain the trust of your potential customers as they will look at it as a sales pitch without any added value.
SEO not only helps you to educate your audience about how your SaaS product will make their lives easier, but it will also bring bucket loads of traffic to your site.
According to the Organic Search & Social Media Survey by Ascend2, increasing traffic to a website or blog has been one of the greatest challenges for SaaS marketers.
SEO helps get your SaaS site right in front of the eyes of your target customers at every point in their customer journey.
Creating high-quality content in the form of blog posts, videos, and podcasts can help you boost your SEO rankings while educating your target audience about different aspects of your SaaS.
These SaaS companies have optimized their web pages for SEO so that they are at the top of the SERPs (Search Engine Result Pages) when someone types in ‘what is crm’ in the Google search box.
Conduct keyword research to target high volume low competition keywords. Long-tail keywords may have a low search volume, but their conversion rates are higher.
Create comprehensive content for all stages of the marketing funnel. This will help you understand searcher intent and capture leads at each stage of the marketing funnel.
2. Offer a Free Version of Your Product.
Customers tend to be wary of services they cannot try out first.
Offer a part of your product free for a limited period to encourage signups.
This allows trial users to experience what your software as a service product has to offer, thus improving your conversion rate.
Take a look at Salesforce’s 14-day free trial signup form. By offering a 2-week trial, Salesforce makes sure that trial users have enough time to take the software for a spin.
Some SaaS companies keep their trial period as short as one week, while some have longer trials of 30 days. Test out different trial periods and see which works best for your product.
Also, decide whether you want to ask for credit card information when a customer signs up for your products.
Sometimes, offering a free trial without asking for too much information improves your conversion rates.
When customers see that they do not have to remember to cancel their membership with your company to avoid automatic renewals, it gives them more reason to try out your SaaS product. They have nothing to lose.
Freshdesk offers a 21-day free trial with no credit card details needed. It is clearly mentioned below their call to action so customers can’t miss it.
3. Offer Your Customers a Freemium Package.
Some SaaS businesses use a freemium model for their product. The freemium model is a business model where companies offer parts of their software or limited features for free.
Wix follows this freemium model. The company offers its product for free, but with limited functionalities. Free websites will have a wix.com subdomain instead of letting you connect it to your domain.
The freemium version of Wix also has ads, and lower storage and bandwidth.
Wix allows for entire websites to be built entirely for free under two conditions:
- Users must sign up for a free membership
- The website URL/ webpage will have a wix.com subdomain
If a customer desires, they can switch from the free version of Wix to one of the premium subscriptions. By using a premium membership, the customer can use their domain name and remove the Wix name from the webpage.
Using this strategy, Wix can build an extensive customer base that advertises the platform because of its attached subdomain.
Wix can also convert free memberships to paid by offering premium services that many customers will desire after building a site with the service.
Mailchimp also follows a similar business model. The company offers users a free version of the product with limited features.
This gives potential customers a taste of what the service has to offer and will entice them to pay a subscription or membership fee.
Another good example of this is the music and audio streaming platform Spotify, which offers free membership with limited features and ads, but also a premium membership with no ads and full features.
4. Keep Your Customer First, Always.
SaaS marketers must focus on providing exceptional customer service.
This is because SaaS companies rely on subscription renewals from existing customers. That is more likely to happen if a user enjoys the SaaS product and finds the customer service helpful.
Inevitably, there will be troubleshooting and technical issues that arise for customers using a company’s software service.
Even if a software service meets all of a client’s needs, but they are unsatisfied with the customer support, they are likely to switch to another service.
Being able to address these issues quickly and thoroughly will significantly aid in building a strong reputation. In turn, this reputation will act as marketing on its own.
GetResponse has its customer support right in the main menu for easy access.
Another great example of good customer support is Freshdesk:
They have a live chat customer support right on their homepage. It also includes a list of FAQs so that users can search for their queries without having to ask customer support.
Providing customers with a rich knowledge base ensures that they are aware of all of the features of your product and can make the most of it.
The next best way to improve customer experience is through your website home page. Keep your website uncluttered and provide all the information your customers require in an organized way.
Take a look at Squarespace’s website:
The design is sleek, and the information about the products and services provided is easily found and navigated.
Potential customers can view templates and resources before making any purchase.
5. Social Media
Social media can help build reputation and rapport.
LinkedIn, Facebook, Twitter, YouTube, and Instagram all have models that allow for the promotion and growth of a business.
Many businesses and individual clients rely on one or more of these platforms to help them find the services they need. Being able to look through social media is a good way to analyze how tech-savvy and reputable a potential SaaS is.
Clients want to work with SaaS models with proven success, and social media provides the opportunity to display that success.
As an example, observe the SaaS company Salesforce. This company utilizes four of the five above-mentioned social platforms – Facebook, Twitter, LinkedIn, and Instagram.
Establishing a presence on social media helps you keep your customers informed of all the latest happenings and updates of your software.
It also helps you track mentions of your company on social platforms to see what customers are saying about your services.
Social media is a great way to quickly answer any doubts or troubleshooting questions your customers may have.
See this post from Asana on Facebook:
With the right social media strategy for your company, you can achieve many things. Customer interaction becomes simpler and more personal. It gives you a chance to show off your company values.
Social media helps you collect customer feedback and im[prove your SaaS product.
As a part of content marketing, you can use social media to share valuable blog posts or video content that you have created for your product. You can also use the platform to announce new features or products.
6. Paid Ads
Advertising across many platforms is useful in creating better brand awareness. According to Neil Patel, co-founder of NP Digital:
“Use brand awareness campaigns to build further relationships and familiarity over time with people getting to know your product. People are still generally loyal to the software they use, so you’ll need a long-term strategy to alter that relationship and win them over.”
Almost all social platforms offer paid advertisement slots that can be shown to a targeted audience that is in need of the services being offered.
These ads can lead them to either the socials that have been set up for the SaaS, or to a relevant landing page on your website.
PPC (Pay-per-click) ads can bring you great results if implemented correctly. They work faster than SEO and are most of the time more effective.
For example, if you type in the keyphrase ‘CRM software, the first result is a Google ad by Zendesk:
Zendesk uses the keywords ‘crm software’ to outrank competitors in its niche by using paid ads.
You can use PPC to target critical keywords for your business so that your webpage appears above your competitors when a user types in the keyword.
Another form of paid ads is social ads. They help you overcome social media platform algorithms and advertise your product directly to your target audience.
Here’s a Facebook ad from Hubspot:
Facebook ads also help SaaS marketers advertise products to customers based on their demographic and interests. Facebook also allows retargeting, which means showing relevant ads to customers who may have visited your landing page and bounced off in the past.
7. Leverage The Power of Customer Reviews And Testimonials.
One of the greatest benefits of having an active and successful customer support service set up is the likelihood of receiving more positive reviews and testimonials.
Customers are more likely to leave reviews if they have received either really good or really bad service.
Reviews and testimonials have the potential to drive in even more traffic and work as a marketing tool in and of themselves. When searching for a software service, a customer will generally look at comparisons and reviews of services to dictate their general opinions around which services they plan on trying out. Thus, having positive reviews is crucial for SaaS marketing.
According to a study by Zendesk, positive online reviews influence the buying decisions of 90% of customers.
Here’s a GetResponse review on G2:
It is quite detailed, listing out the pros and cons of the service and how it has helped the customer. These reviews are very valuable in building credibility.
Here’s another review of GetResponse on Capterra:
Maintain a good customer relationship so that you can curate reviews on such sites.
You can also display social proof on your website like Optinmonster does here:
Further down on their homepage, they display customer reviews as well:
Reviews and testimonials, also known as social proof, are trust signals for your SaaS. Potential customers are scouring the web looking for reasons to either choose your service or not.
Optinmonster makes the most out of their customer testimonials by placing an easily-accessible tab in their main menu.
They also divided their testimonials into different categories to appeal to different segments of their target audience.
Case studies are another crucial element of social proof. Optinmonster links to different case studies so that potential customers can have a deeper understanding of what existing users feel about their service.
Case studies break down the important metrics and numbers, making them more imperative than regular reviews. So make case studies a part of your SaaS marketing strategy.
8. Work With SaaS Influencers.
More than 90% of marketers believe that influencer marketing is effective.
Influencer marketing helps SaaS marketers achieve one (or both) of these goals:
- Increase brand awareness
- Increase conversions
Working with influencers or content creators can help you appeal to your target audience.
A sponsorship is when you pay a creator to feature your company in their content. Influencer marketing is trending in SaaS as more SaaS marketers find this approach effective.
YouTube is one platform that seems popular among SaaS marketers looking for influencers to work with.
Video creators present their sponsored content with a disclaimer. This tells their audience that they have been paid to create that specific video.
Nord VPN has an ambassador program for influencers to join and be rewarded for creating sponsored content.
As you grow your target audience, keep an eye out for those customers who have huge followings. These influencers are active on social media and other platforms like YouTube. They may have their own website or blog too.
Reach out to them with a concrete plan and offer so they will be interested in promoting your SaaS.
You could offer your product for free to them in exchange for a review, some feedback, or sponsored content.
That’s exactly what Canva did when they discovered a brand evangelist with an enormous following: Guy Kawasaki.
Canva reached out to Guy when they found out that his social media graphics were all designed using their freemium tool.
He agreed to be their brand evangelist, and this helped Canva double its users.
What Metrics Should You Consider When Planning Your SaaS Marketing Strategy?
Customer Churn Rate
Customer churn rate is the number of customers you have lost for your business in a certain time. This metric can help you gain deeper insights on how to increase customer retention.
SaaS churn rates are lower for SaaS companies having contracts with customers that are 2 years or more than monthly subscriptions. This could be due to factors such as loyalty and user experience.
Studying customer churn rate and the activities that led to it can help you revamp your SaaS marketing strategy.
We saw how retaining customers can be valuable for your SaaS business. It can bring you better results than acquiring new customers.
That’s mostly because your SaaS business depends on memberships. Look beyond just customer count when you are studying your churn rate. Study the background and persona of each churned customer to figure out why they may be falling out of the sales cycle.
Customer Lifetime Value (CLV)
The amount of money your customers pay on interaction with your company is called customer lifetime value. CLV helps you measure your SaaS growth.
Calculation of your CLV is very simple.
- Calculate your customer lifetime rate by inverting your customer churn rate. [1/customer churn rate]
- Calculate your average revenue per account (ARPA). You can do this by dividing your total SaaS revenue by the number of customers.
- Calculate CLV by multiplying customer lifetime by ARPA.
As you can see, CLV shows you how much your average customer is worth. Every time your customer renews their subscription with your SaaS business, it increases your customer’s lifetime value.
Customer Acquisition Cost (CAC)
Businesses calculate their customer acquisition cost to see how much it costs to acquire new customers. It helps you gauge how valuable your customers are to your business.
CAC, along with CLV helps prove a SaaS business’ feasibility.
When you divide your total SaaS sales and marketing expenditure by the total number of new customers you have acquired in a given time frame, you get CAC.
As a new SaaS company, customer acquisition should be at the forefront of your digital marketing strategy.
CLV to CAC Ratio
One of the best ways to gauge your SaaS marketing success is to calculate your CLV to CAC ratio. This helps you see which of your digital marketing efforts are working well.
Make sure to keep an eye on this metric so that you can spend more money on those marketing tactics that are helping you grow your business.
When you measure your CLV to CAC ratio, you need to aim for a ratio that is 3 or more. In other words, your customer lifetime value should be at least three times more than your customer acquisition cost.
If the ratio is less than 3, you are spending too much with fewer returns. If the ratio is more than 5, you are spending too little and are probably missing out on opportunities to grow your business.
Tweak your SaaS marketing plan according to this metric to make sure you are in an optimal range.
Putting Your SaaS Marketing Strategy in Place
There are many factors that make up a stellar SaaS marketing strategy.
The trick is to pick the ones that resonate the most with your company and sketch out a plan.
A plan that results in conversions, demo signups, and software downloads – all that good stuff.
Dig deeper into your customer analytics and experiment with different marketing strategies. Figure out what works best for your target audience and fine-tune it over time.
What are the most crucial pieces of the SaaS marketing “puzzle” according to you?
Would you like to add anything more that I missed? Reach out to me in the comments section – I’d love to have a chat!
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