Hello!
Software as a service (SaaS) is a relatively new industry, but it has exploded over the past decade. In 2021, the SaaS market was estimated to be worth approximately $152 billion, and Statista predicted in a recent study that the market would be worth $208 billion by 2023.
While this is undoubtedly exciting news for new SaaS companies and entrepreneurs, it can also be a little daunting.
Competition is fierce and the landscape of SaaS is constantly evolving to support and keep up with the growth of technology.
Learning how to effectively promote and market your SaaS company and products can help you reduce churn, optimize pricing, and grow your subscription business across the board. Read on for more information about how to create effective, original SaaS marketing strategies and increase your SaaS lead generation.
What is SaaS?
Software-as-a-Service, or SaaS, is a subscription business model for creating and distributing software that doesn’t need to be installed locally on a user’s device. Instead, the software is hosted remotely and accessed over the internet.
Becoming a SaaS allows a business to offer its product as a service instead of as a physical product.
The SaaS business model is popular because it’s scalable, flexible, and standardized.
How Does It Work?
SaaS is the delivery of software as a service over the web. The software is hosted on a server, and customers access it through the internet or an intranet. The customer doesn’t install anything on their computers—the database and software are hosted remotely.
This differs from a traditional software purchase, where customers download and install the software on their computers or servers.
There are many advantages to SaaS. Some of these include scalability, flexibility, standardization, and lower cost of operation. Customers don’t need to worry about hardware failures or software compatibility because the software is hosted on a server.
In a world where consumers value convenience over almost any other factor, SaaS has stepped in to change the game. If you’ve ever used Asana, Slack, MailChimp, Google Drive, or Microsoft Office Suite, then you’re familiar with the convenience and ease of use of SaaS.
Marketing Challenges for SaaS Lead Generation
According to Totango, 52% of SaaS companies increased their spending on customer retention in 2021. That number is only expected to grow by the end of 2024. That’s because, unlike traditional products and services, SaaS’s number one goal is customer retention.
Because software as a service differs from the traditional norm in both concept and delivery, it requires focused and specialized marketing strategies.
Products and services that are “single-use” like food, clothing, or cleaning products have a relatively short sales cycle. And your marketing efforts are focused on selling your brand not just once, but over and over again.
Every time someone needs a new toothbrush, you have an opportunity to market to the consumer – but also a requirement. They could just as easily get a different toothbrush!
In contrast, SaaS has a relatively long sales cycle – particularly in the discovery and research sections of the consumer journey. And once they commit to trying your product, you want them to stay for as long as possible. Subscription-based services thrive on long-term users rather than new customers.
While finding new niches and markets will always be important, for subscription-based services, reducing your cost of customer retention and churn is the main focus of successful SaaS marketing strategies. Consider this: Once a consumer makes the shift away from your product, it’s extremely hard to get them back.
Proven SaaS Marketing Strategies
1. Define Your Ideal Customers/Target Audience
As with any marketing venture, the first step to success is to develop a deeper understanding of your target audience. This goes beyond the basic demographics.
You have to consider their motivations, their passions, their interests, and their challenges – that’s what will allow you to create products and marketing messages that serve those needs.
The process of defining your audience closely relates to the process of defining your product and/or service. If you’re not clear about who you’re marketing to, you won’t have a clear idea of what it is that you’re marketing.
And if you don’t know what you’re selling, you won’t be able to sell it! This will also help you determine where to market your product or service.
Who Is Your Audience?
When you’re defining your target audience, the first thing you need to do is identify the type of people who would be most interested in your product or service. Be as specific as possible.
For example, let’s say you’ve created an app that helps people lose weight. This product could work for anybody who wants to lose weight—but that’s a very general audience and far too broad for a marketing campaign.
If you want to be more specific for a more effective ad campaign, you could focus on people who work a desk job, want to lose weight for health reasons, and are short on time.
Now you’ve narrowed your audience and can likely think of a few marketing slogans and campaigns right off the top of your head!
As you’re determining where your target audience spends most of their time, ask yourself these questions: Where do they live? What do they like to do? What are their hobbies?
Investigate the places your target audience is most likely to be so you can market to them in a place they already frequent. This helps you get your product in front of more people and creates more opportunities for sales.
For example, let’s say you want to sell a service or an app that helps homemakers improve time management. You can geofence your paid ads to appear where they’re most likely to frequent – supermarkets, schools, yoga studios, etc.
Remember, the more you know about your audience, the more efficiently you can use your marketing budget by creating niche audiences that are much more likely to convert than the general public.
2. Get to Know Your Customers with Qualitative Research
What are marketing strategies without customers to consume them? Just numbers and pictures.
The more you know about your customers, the better you can serve their needs and become their go-to solution. To make this happen, you need to understand your customers’ buying journey – from awareness to purchase.
A good place to start is conducting customer interviews or usability tests. By talking to your customers, you can get insights into their decision-making process. You can also learn about their pain points and how your product or service solves those problems.
Moreover, you can get an idea of what other problems your customers have, and what features they would like to see in your product. Customer interviews are an amazing way to get qualitative data about your customers. You can do them either in-person or remotely, and you can use them to collect data about any aspect of your customer experience!
Once you’ve collected and aggregated that data, there are dozens of ways you can use it to your advantage:
- Troubleshoot common pain points with your software
- Create nuanced and meaningful content and ad messaging
- Create more effective SaaS landing pages
- Gather customer reviews for your website
- Use the data to A/B test your marketing campaigns on relevant audiences
- Improve ROI and reduce churn by improving your current service offerings or developing new ones
Remember, the number one goal of SaaS companies should be the retention of their current clients. And nothing turns a happy customer into a lifelong brand advocate like an open line of communication!
When you make your customers feel heard, they’re so much more likely to stick around and continue to use your product. Make them feel like they’re a part of the solution and watch churn plummet!
3. Understand Your Competition
Now that you’ve done all the hard work of understanding both your potential and current clients, it’s time to take a look at the competition. SaaS is a strange space for many marketers because it can be both competitive and completely niche at the same time.
For instance, you may have the world’s first and only dog training app subscription service. That’s a pretty great unique value proposition! This thing will sell itself, right?!
Wrong.
As a SaaS product, you’re not just competing within your product market. You’re also competing with every other app and software available on the internet. Which is… a lot.
The Apple and Google app stores are a wasteland of wonderful ideas and products that just don’t get the attention they need to succeed. So, no matter how unique and wonderful your product is, don’t assume that the customers will come rolling in. You have to find a way to get your product in front of the average savvy consumer.
A great place to start is by looking at what your competition is doing. If you don’t have any direct competition, look at what others in similar industries are doing to capture consumer attention successfully.
Start by analyzing their online presence – this includes blogs, social media, websites, and landing pages. This will help you identify strengths and weaknesses in your own campaign. What are they doing well? What could be improved upon? Use these lessons to your advantage.
You should also be keeping up with your industry news – not just the vertical in which your product exists, but the SaaS industry as a whole. What platforms are people using to reach consumers?
Should you be offering free trials? What’s the average subscription cost – and are you over or under in your pricing model?
As you gather this information, make sure you’re not just filing it away to gather dust. You need to make sure that you’re improving your campaigns continuously and consistently. Because if you don’t, the competition surely will!
4. Run an Ad Campaign to Build Brand Awareness
Remember, your marketing efforts don’t always have to revolve around your products. In fact, it’s a good strategy to start building brand awareness early on. This is an especially useful strategy for new SaaS companies.
Building brand awareness allows you to attract new customers and position yourself as a market leader from the get-go. By creating branded content and marketing campaigns, you can drive traffic to your website and work on becoming a household name.
Not sure where to start? This is where paid advertising comes in. Building brand awareness through paid advertising is a great way to get better ROI on your SaaS marketing strategies.
You can use different channels, like social media and paid search, to drive targeted traffic to your website. This will allow you to test different ads and see which ones work best for your business.
5. Offer Free Trials
One of the best things about marketing for SaaS products is that there is almost no cost to you when you offer a free trial. While there are certain sunk costs – development, training, employee time, etc. – it’s not like you’re sending physical goods and paying for the costs of manufacturing, product, packaging, and shipping.
You have very little to lose by offering a free trial of your SaaS products, and so much more to gain. In fact, Opt In Monster found in a recent study that 62% of SaaS companies get over 10% of their business from free trial offers! That’s a significant amount!
And when you consider the psychology behind it, it makes even more sense. People are looking for solutions to their problems when they’re researching SaaS. Whether it’s creating the perfect email campaign or online storage solutions, they have a need that you can fill.
But signing up for a monthly subscription can feel like a big ask. $15 a month adds up – especially when the average American has 12 monthly subscription services at any one time.
Offering a free trial proves that you’re confident in your product, making it seem more trustworthy. It also provides peace of mind that if this product doesn’tsolve their problem, they won’t be stuck paying for something that doesn’t work. It’s a win-win scenario that removes a lot of entry barriers and objections all at once.
Just make sure you’re following these SaaS free trial best practices:
- Make sure it’s easy to sign up for – don’t get greedy about the information you require! Go with the bare minimum and have them add additional information when they decide to use the product permanently if necessary.
- Don’t require a credit card to sign-up – this is heavily debated in some SaaS communities, but we advise that you don’t use a credit card for automatic renewal at the end of the trial. Firstly, because it can really deter people from completing signing up – we’ve all been burned by forgotten subscriptions before. And secondly, because it leaves a bad taste in your customers’ mouths when you charge them at the end of a free trial without enough notice. It feels sneaky and may keep them from signing up again later. Trust your product and your customers by requiring purchase post-trial.
- Make transitioning from the free trial to a paid subscription easy and enticing. People should just have to click a button and enter payment information to sign up. Use as many forms of payment as possible to keep it convenient – PayPal, GPay, ApplePay, Credit Card, Debit Card, etc. You can also offer a discount for continuing the service, like one month free for new members! In the long run, you’ll make much more than you’ll lose by offering.
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