Software as a Service (SaaS) is a revolutionary business model. Many companies have leveraged this software distribution model to provide licensed online apps to other businesses on a subscription basis. In simple terms, an enterprise hires a cloud-based software so that its users can better connect over the internet. Examples of SaaS companies include MailChimp, Box, SalesForce, and DropBox.
Flexible payment gateways, software updates, increased team collaboration, and data security are some of the top characteristics that make SaaS lucrative. According to FinancesOnline, 73% of businesses intended to invest in a SaaS app by the start of this year. The survey also showed that the SaaS market value is projected to reach about $623 billion by 2023.
SaaS adoption has been exponentially growing over the past few years. Cloud-based apps streamline how businesses undertake their processes. For example, data storage practices have taken a positive turn since companies started using SaaS, providing bolstered security while making it easily accessible to team members. That said, there is a stiff competition in the market. You need to have a robust SaaS marketing strategy to edge over your competitors and record the highest possible conversion rates. Understanding the nitty-gritty of SaaS marketing is not easy, but you can leverage the following marketing strategies.
1. Pay-Per-Click (PPC) Using Landing Pages
A PPC landing page is a special website page used for advertising campaigns on AdWords, BingAds, and other similar platforms. It is where the target reader "lands" once they click on an ad. One key element of an excellent PPC landing page is the "Call to Action ". CTAs are often short and straight-to-the-point, making PPC web pages an effective means of increasing conversion from paid web traffic.
Why Are PPC Landing Pages Important for Adwords?
The clear-cut value of a landing page for Google Ads can only be determined by assessing organic and paid traffic. Your goal for creating a website is to increase organic traffic. Google selects particular links to pages on your website and ranks them according to how best each serves the target search query by your target audience. That's the reason most companies splurge significant amounts of money on search engine optimization (SEO).
With Google or Bing Ads, instead of the SERP doing the work, you choose which page the ad reader goes to. For instance, you can direct them to your homepage, although that's not the best practice for conversion because the content may not offer detailed information and CTAs that are tailored to the specific ad campaign. In most cases, page visitors often don't find what they are looking for on a generic webpage. That leads to a high bounce-off rate, which signals to Google that the landing page isn't so helpful. By creating a PPC with its stand-alone, relevant landing page, SaaS companies can:
- Achieve an improved Google AdWords score
- Minimize your cost-per-click
- Lower the cost-per-acquisition; and
- Boost conversions on the discounts you offer on paid ads
2. Conversion Rate Optimization (CRO)
In this era of online businesses, particularly in the Software as a Service sector, your revenue and growth margins are determined by conversions. That signifies the number of website visitors who convert from mere browsers to customers.
Understanding CR and CRO
The conversion rate is the ratio of web visitors who become consumers to the total number of visitors daily. That said, a website that received 100 visitors daily with only ten becoming buyers has a CR of 10%. However, if you need 20 buyers a day to meet your daily revenue goals, you'll need to double the number of visitors. That leads to additional marketing costs.
Conversion rate optimization (CRO) requires an in-depth understanding of what your audience is looking for when they visit the site, the UX when browsing the product, and systematically converting these prospects into leads. Unlike CR, CRO requires no further expenditures to boost your conversion rates. Why? You can analyze website funnel and consumer behavior at every stage, noting the areas with shortcomings and optimizing them. That way, you can easily reach a 20% conversion rate with no additional costs.
CRO Focus Areas
Now that you understand how to optimize your website to best suit your conversion needs, you can further boost your CRO strategy by focusing on the following three areas.
- Marketing – Developing powerful marketing and segmentation strategies are critical. Understand your consumer behaviors, where they spend time online, and draw them to your site. Remember, visitors who comprise your perfect consumer persona make the best conversion options.
- Pricing plans – As a SaaS provider, you have a range of pricing strategies you can use. Your choice depends highly on the consumer needs you solve, app functionalities, and the benefits of paid packages. Some standard pricing plans include: Free trials, pay as you use (PayU), freemium, and custom packages.
- Retention – To record impressive profits in SaaS, you need long-term consumers. This means profitable subscription cycles, and you can only achieve this through consumer retention. Every new user you retain at the beginning of a cycle brings back business. A churning client translates to a drop in your conversion rate. Consequently, SaaS companies can maximize their profits by retaining clients.
3. Onboard Marketing
A considerable number of SaaS companies mainly focus on structuring and talent search teams, cross-selling and upselling, and retentions as the best SaaS marketing strategies. One critical area that they often leave unexploited is consumer on-boarding.
SaaS onboarding means supporting software users to get started and engaged with the services. To streamline the integration of SaaS into a client's business routine, you need resources and good financial input.
Consumer onboarding is an ideal marketing tactic if you primarily offer freemium packages to hedge both your long- and short-term consumer-retention goals. That also goes for companies that offer more comprehensive packages. By adhering to the following onboarding tips, you can bolster your SaaS marketing strategy.
Operate Parallel with Sales
One common mistake that SaaS marketers make when handling consumer onboarding is creating a rift between what they promise the consumer and the service they offer in reality. Having in mind that an excellent onboarding process starts with client-centric sales, you need to align your offer with the sales team projects within the first week or months after adoption. Work on pre-sale information, regular sales training, and speaking to prospects on their expectations. That's the secret to alleviating this disconnection.
When users purchase SaaS, they often get spasms of joy and enthusiasm. To ensure the excitement continues even after the sale, try and make contact with them within 24 hours of purchase. If possible, integrate a "time to welcome new customers" in your CSM plan. Without time optimization, the client's motivation plummets. Sometimes, they may question whether they made the right purchase decision. Alternatively, you can automate some areas of time optimization. For instance, instead of scheduling calendars to consumer support teams, why not create an automatic system that generates an email and sends it to the client once a sale closes?
Do Your Homework
In SaaS marketing, the amount of time you relish spending with your clients should be the same amount you dedicate to the preparation stage. Your target customers will barely have trust in your services during the early stages. Nonetheless, you can take time and research about your users' businesses, industry, organizational needs, among others. This information is critical and indicates to them that you understand their unique needs. You can take advantage of professional networking sites, such as Crunchbase, LinkedIn, and Bloomberg, to understand your prospective clients.
Focus on Creating Value Quickly
In online marketing, we often hear about the "Aha!" moment. When it comes to SaaS, that moment comes when your consumers finally realize the value of your cloud-based app on their business outcomes. That's the case when providing freemium offers. The situation gets complicated when working with sophisticated business software. You might want to find opportunities to express the "micro-value" of the services as soon as a user signs up. You may speak to a prospective buyer regarding your goals and welcome them. If you cannot talk of the slightest basic task that will impress them, achieving your onboarding goals becomes virtually impossible.
4.The Consumer Funnel Analysis: Acquire, Engage and Retain
A lot can be said about individual funnels for a SaaS company's consumer lifecycle. However, looking at the concept from a broader perspective will offer a better understanding. We've heard reports of subscription companies complaining of stagnated revenue, yet they don't seem to find the real reason for the plateaued revenue margin. The first solution that most people will give is that a bigger budget should be isolated for marketing. Splurging cash on marketing is ill-advised unless you have achieved an improved CRO and minimized "leakages" by reducing churns.
For your B2B or B2C SaaS business, you need to understand the stages of SaaS consumer lifecycle funnels so that you come up with an overall practical approach that propels the company to higher sales. In reality, the stages of your consumer funnel will not have the same number of subscribers. The funnel will be something like… "Acquire > Engage > Retain."
The number at each stage is lower than the previous phase's because not every visitor to your site will sign up for the service. Additionally, only a fraction of those who sign up convert, and not all who convert become loyal consumers. Let's now try and understand each stage.
Acquire – Attracting large volumes of traffic to your website is excellent, but you need to bring in the right traffic – people who are willing to buy your SaaS solution. Getting tons of traffic with dormant sign-ups means that you're targeting the wrong audience, would-be buyers can't find the perceived value, or your product is not the best fit.
Engage – At this juncture, you have substantial traffic, and most users are advancing through your funnel. However, a considerable number of them aren't completing objective-oriented steps to allow them to understand the value of your SaaS. If that's the case with you, you may be doing your onboarding wrongly, or there's a disconnection between the perceived value and the service's actual value. Addressing these problems improves your ROI in the long-term.
Retain – As mentioned earlier, consumer retention is the best bet to having higher profits. The costs involved in finding new buyers are high, so don't shrug a shoulder to your loyal consumers. Your objective should be to prevent churns before they occur by providing you existing consumers with quality services and support.
5. Key Performance Indicators (KPIs) in SaaS Marketing
SaaS metrics or KPIs are measurable values that a company uses to gauge its success in achieving its marketing goals. There is a plethora of parameters you can optimize in terms of advertising and sales.
Monthly Recurring Revenue (MRR) – This metric is used to predict the monthly revenues from subscription plans based on recurring business. It does not include one-time or variable charges. MRR is perhaps the most critical KPI for any subscription company since it indicates the effectiveness of the subscription model. Nonetheless, it comes with its unique challenges, such as retention and churn control.
Consumer Lifetime Value (CLV) – This performance indicator measures the profit that every given consumer brings to your business. Understanding your CVL enables you to allocate the right budget when acquiring new consumers and retaining the existing ones. Additionally, you'll know the impact that upsells and cross-sells on profits when offered to the right clients. To calculate your CLV better, you need to understand the revenue you earn from a consumer, subtract the acquisition costs, and note the time they'll generate revenue before they churn.
Consumer Acquisition Costs (CAC) – CAC refers to the resources used to identify and acquire additional consumers. It involves all the efforts used to pitch the products and get them in possession of the client. To accurately calculate your CAC, take the total marketing and sales expenses, and then divide by the number of new consumers acquired within that period.
Customer Churn – This is simply the number of consumers unsubscribed from your SaaS solution within a specified time. In other words, they are the customers who opt not to renew their subscription accounts. Some clients churn and head to better services from different companies, while others do so for other reasons. The former should be a red flag for you to improve your services.