SaaS Marketing 101

Set Up Your SaaS Business For Growth Through Digital Advertising

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Software as a Service (SaaS) dominates the cloud services market. SaaS cloud application services are predicted to reach a revenue of $151.1 billion by 2022. Businesses are increasingly investing in cloud digital assets, pushing the SaaS market to become more competitive and innovative.

Table of Contents

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The cloud has gone mainstream. At the end of 2019, Gartner predicted that the worldwide public cloud services market would grow 17% in 2020 to a forecasted revenue of $266.4 billion.

Topic One

How Can I Get Started With SaaS Marketing?

SaaS is what the cool kids call “software as a service,” and even if you’ve never heard of SaaS before, chances are you’ve benefited from it. Then again, if you’ve made it to this page you probably already know all of that. Whether your service’s end user is a business or an individual consumer, the SaaS umbrella covers it all. 

That means you’re probably wondering how to market your SaaS business to get the most bang for your buck. Let’s dive in.

SaaS Insights

In data collected by Baremetrics, SaaS companies have reported that:

  • The #1 popular monthly and annual subscription price is $99. 
  • 32% of participating companies offer a free plan for users. 
  • On average surveyed companies are losing 10% every month from failed charges on recurring payments.

 

Intro to Inbound and Outbound Marketing

Inbound and outbound marketing are two very different strategies to reach audiences, and both can be effectively used to build your SaaS customer base. A good marketer will be able to identify the right balance of approaches.

Outbound marketing is probably what many would consider traditional marketing. Think cold calling, telemarketing, and salespeople with dark leather briefcases. Outbound marketing is a numbers game in a lot of ways. You are seeking disruptive marketing strategies to bring in potential customers. With outbound marketing methods, you are casting a wide net and hoping to catch a few fish (well, customers) in the process.

Inbound marketing focuses on building customer relationships through a sophisticated set of strategies that attract customers through different stages of the buyer’s journey. Hubspot defines 3 main aspects of inbound marketing: attracting, engaging, and delighting customers. 

🏁 Learn how we combined inbound strategies with PPC campaigns to reach explosive new growth. →

Why does this distinction matter for SaaS? Well, understanding these two types of marketing can help SaaS companies create a marketing strategy to blow conversions out of the water. Chances are, the best SaaS marketing plan for your B2C or B2B company will involve a combination of inbound and outbound tools.  

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How does SaaS Marketing Differ?

SaaS marketing differs greatly from eCommerce marketing. Rather than trying to convince consumers to buy a tangible, physical product, you are trying to convince a consumer that a service that lives in the cloud is something that they can’t live without. 

A person can touch a pair of leggings or test a shampoo and know if that product is right for them. With a SaaS solution, a consumer needs to be convinced that the solution will adequately address their pain point over a period of time...and then you have to convince them to keep using the service.

What Makes a SaaS Company Stand Out?

So what sets SaaS marketing apart and how can your SaaS solution stand out in a crowded field? Here are some tried and true ways SaaS marketers have set themselves apart. 

Giving your service away for free can be a good thing. Since SaaS solutions can’t be touched or viewed in a carousel of photos, consumers, especially for B2C SaaS, will want to know exactly what they’re getting when they commit to a subscription. This is why free trials are a common offer in the SaaS sales funnel.

What’s the difference between a Free Trial and a Freemium Model?

Free Trial Freemium
  • Users granted time-limited free access to a product.
  • May or may not require a credit card to sign up.
  • Users get to try out the product and decide if they want to pay for the service. 
  • Users granted free access to a product without a time limit.
  • Companies only give users limited access to a product's features.
  • Users decide if and when they want to subscribe based on their usage of the service.

 

Your product quality matters. Paying for a software solution isn’t the same as shopping for clothes online. Criteria for clothing online might be: Is it cute? Does it come from a trendy label? Is the price-point right? Construction and quality matter, too, but aren’t necessarily the top priorities for shoppers. SaaS customers spend a lot of time researching solutions that address their needs. To keep customers happy and returning, your product should meet their expectations from the jump.

You should place emphasis on the “service” piece of SaaS. As much as consumers are concerned with the quality of the software they are paying for, it is important not to forget that good customer support factors greatly when it comes to customer satisfaction. Consider moving beyond the “reactive” approach to customer service to anticipate questions and keep your customers engaged.

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Your content really matters. Consider content as a part of your overall marketing and retention strategy. As customers are researching what SaaS solution fits their needs, they will be checking out what content you have available to them, especially if your solution has a learning curve. Do you have tutorials available for new and existing customers? Is it useful, engaging, and clear? Are you creating content that encourages customer retention?

Customer retention is your bread and butter. SaaS marketers should keep trying to bring in new customers, but customer retention should be a top priority. Your churn rate is an indicator of subscription health. Is the churn voluntary (as in the customer cancelled) or involuntary (such as a lapse in payment)? B2C companies should expect to experience higher churn than B2B.

You have a built in data collection center. Use it wisely. Your business is the cloud, and naturally SaaS companies collect information about their customers upon sign up. But you are also getting passive customer information that can help improve your customer experience in a proactive way. Are customers actually signing in to their account? If not, how can you engage them to interact with the service? SaaS companies have powerful information at their fingertips, and they should use it wisely.

Topic Two

B2C and B2B Marketing

B2B SaaS vs B2C SaaS

Besides being a jumble of letters, whether you are B2B SaaS vs B2C SaaS is also a big determining factor in how you’ll plan your SaaS marketing strategy. 

B2B (business-to-business) and B2C (business-to-consumer) require different approaches to converting paid customers and a different buyer’s journey. Think about it like this: the same things that get a consumer to subscribe to Spotify are not going to work on a mid-size company seeking a new CRM like Salesforce.

Cloud graphic depicting SaaS

B2B software marketing has traditionally relied on sales teams to convince businesses that their solution is worth paying for. However, the increasing popularity of B2C software and a groundswell of startup competition has shifted attitudes towards B2B SaaS.

Common B2C Marketing Strategies

What makes B2C SaaS marketing tick? B2C marketing strategies require creating appeal to individual consumers. B2C marketers seek to encourage customers to sign up on their own time using the tools at hand. This is the main differentiating factor between B2C and B2B marketing. Whereas B2B marketers tend to rely on sales teams to close the deal, B2C marketers seek to create a beginning-to-end self-service buyer’s journey.

These are a few common B2C marketing strategies that have been proven to work:

  • B2C SaaS businesses utilize easy to use user interfaces that reduce friction for customers interested in signing up.
  • Focusing on a self-service model and that minimizes reliance on sales teams. (In other words, less money spent on sales.) 
  • Investing more money in optimizing and maximizing inbound marketing and a social media presence.
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B2B Marketing Strategies (and How to Improve Them)

B2B SaaS marketing has traditionally relied on sales teams to convince businesses that their solution is worth paying for. However, the increasing popularity of B2C software and a groundswell of startup competition has shifted attitudes towards B2B SaaS.

❄️ Cold emails are still a hot topic. Learn how cold emailing led to 7 figures of revenue in just 90 days. →

For many of the reasons B2C Saas marketing strategies have worked, B2B customers have adopted different attitudes and expectations from their cloud software. Consultant Phil Morettini calls this the”consumerization” of B2B SaaS, and it marks a shift in the separation of B2C and B2B marketing.  In fact, B2B SaaS marketers could learn a thing or two from B2C SaaS successes.

So let’s say a B2B SaaS business wants to update its marketing strategies from a reactive, sales-centered focus to a leaner, marketing-first approach. They would want to check off some of the features below.

Checklist for B2B SaaS Marketers:

  • An intuitive user interface that encourages self-service sign ups.
  • Marketing-driven investments to reduce the length of the sales cycle. 
  • Free trials or freemium product models.
  • Optimize your website to increase conversions with clear and effective calls-to-action.
  • Great content marketing that goes beyond SEO strategy to nurture new audiences and address user needs of existing customers. 
  • Proactive customer retention strategies that incorporate UI optimization, customer service streamlining, and rigorous upselling.

Topic Three

Understanding Lead Generation and Customer Acquisition

Lead Generation for SaaS

Let’s talk about lead generation in SaaS. What’s a lead anyway? That one is easy. A lead is a person or that has shown interest in your service but hasn’t committed to making a purchase.

🗨️ Find out how you can boost conversion rates using feedback that's hiding in plain sight.

In B2B SaaS marketing, a lead might be a decision maker at a company such as a manager or C-level executive with purchasing power. In B2C SaaS, a lead is simply an individual who has indicated they are interested in the product you are providing. Lead generation uses strategies to capture potential customer information and keep them interested. 

This brilliant infographic maps out all the ways that marketers can encourage lead generation. 

Internet marketing lead generation ecosystem

Topic Four

SaaS Customer Retention

SaaS Customer Retention

Building up your lead generation channels are important, but the success of your marketing can best be determined by what comes next. So you got the lead, you got the conversion, and you have the customer. That’s great! But the work still isn’t done.

Developing channels for customer acquisition is costly, and having to repeat that process over and over for new customers can affect your margins. This is where customer retention plays a big role. Overall costs are lower when your company reduces churn. 

Churn In The SaaS Industry

Let’s take a second to look at churn in the SaaS industry. Recurly has published industry benchmarks for churn rates and what affects churn. Knowing the reasons behind customer churn is going to help your business combat losses through churn.

Based on the below findings from Recurly, we can make a few useful insights about SaaS industry trends. The first thing to note is that not all churn is voluntary. That means that there are customers out there you could be retaining with proactive strategies for catching failed payments.

SaaS churn chart

There’s a lot to learn from the voluntary churn numbers, as well. Can you get to the root of why your customers have voluntarily unsubscribed or cancelled service? Is your business exhibiting high churn rates, and if so what does that say about the overall health of your business? 

In an ideal world, your investment in customer acquisition would provide your company with a lifetime customer. Unfortunately, not all leads convert to customers and not all customers stick around. The good news is that you can convince customers to stick with your SaaS product with the right tactics. 

Happy faces on wooden blocks with one upset face

4 Tactics for Boosting Customer Retention

  1. Develop comprehensive onboarding practices. When a user signs up for your service, make sure they know how to use it!
  2. Your solution must match what you advertised. If you’re saying that you’ve created the best photo filter creator in the world, your paid customers better feel like that’s exactly what they’re getting.
  3. Upsell! Create add-ons and additional features that keep your customer coming back.
  4. Create avenues for engagement. In most cases, you want your customers to use the product early and often. When a customer engages with your service frequently, they have a better understanding of the value your company is providing.

Topic Five

Digital Advertising for SaaS

You might be wondering what digital advertising channels are best for SaaS marketers.

📩 Don't miss out on conversions. Find out how to track the impact of downloadable lead magnets. →

Truth be told, there isn't a best digital advertising channel, but there are a bevy of great platforms to use. Depending on if you're a B2C SaaS or a B2B SaaS business, you'll probably come to different conclusions about what works "best". 

That's why having foundational knowledge of SaaS marketing is so important. Now you know the difference between inbound/outbound marketing, why lead generation is important and why your churn percentages matter.

Since our agency doesn't believe in best practices, we've tried a little bit of everything to help our SaaS clients exceed their goals. Check out some of our success stories below.

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In just 6-weeks, EmberTribe was able to increase the amount of leads delivered via Facebook by 8x at just 87% the cost.

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Drastic Decrease in Cost per Lead

We doubled the number of applications that were both requested and completed, while driving total customer acquisition cost down from to just over $5

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