The average business should expect over half of its software stack to be replaced within the next two years. And this trend is only expected to continue.
When it comes to drafting a marketing plan for SaaS, there’s a whole new set of rules you need to follow. Prospects do a lot of their research and shopping online, so getting them to sign up for free trials and demonstrations is critical.
Even when you’ve completed a sale, the work doesn’t stop there: onboarding, churn rates, growth hacking, and a slew of ROI calculations are all part of the complicated terrain that SaaS marketers require to navigate.
Tight competition has created a fast-growing, high-volume, and fragmented SaaS industry. Building and managing high-quality relationships is a challenge. Sales and marketing teams need to be more diligent than ever to build strong customer relationships.
“A successful SaaS marketing plan is largely dependent on laying solid strategic foundations.”
This blog will draw on our experience dealing with SaaS organizations as we share critical lead nurturing insights. Let’s start with the basics.
What Is Saas Marketing
SaaS marketing is a very specific form of B2B software marketing that focuses on promoting a subscription-based SaaS product.
Unlike companies that sell physical goods or make one-time purchases, SaaS companies provide an intangible commodity. It must constantly prove to its existing (and potential) clients that their “rented” or subscription service is worth the monthly charge.
If you have successfully managed to grow your business, it is now time for you to acquire more customers through SaaS marketing.
SaaS Marketing Plan vs Traditional Marketing
Building a SaaS business is harder than selling a physical product. After all, it is easier to convince people to buy mascara than it is to get them to adopt your software into their daily workflow.
Also, there’s no way to convince someone they need your service if they don’t already know they need it or believe it’s possible. That makes selling Software as a Service (SaaS) a whole new challenge to accommodate a marketing plan.
Though the SaaS (software-as-a-service) sector is sometimes grouped with “business-to-business” enterprises, its niche—creating and administering software applications—means it functions much differently than other B2B companies.
Their sales cycle usually follows a three-step process:
- Acquisition: Getting new users onboard.
- Monetization: Converting those users into paying customers.
- Retention: Persuading a paying customer to stay with you.
SaaS companies are likely to utilize a more specialized funnel known as the AAARRR funnel or pirate funnel to nurture their tech audience. As opposed to the traditional funnel, which is more acquisition-focused, a SaaS marketing plan focuses on the lead lifecycle, and what occurs after the initial purchase.
Image source: Intelusagency.com
The AAARRR funnel, coined after the abbreviations for each of the stages, focuses on creating a lead and maintaining and monetizing that customer—both of which occur after the initial purchase process.
For example, a SaaS company that offers free or freemium services in their activation stage with some limited functionalities they have to convert all of these users to a premium account to make a profit. Retention rate plays a crucial role here.
Businesses have to look after the return on investment (ROI) numbers too, which usually reflects a few weeks/months after a purchase is made.
The Components of a SaaS Marketing Plan
So, what constitutes a solid SaaS marketing plan? You can utilize the following components as the guide to a successful SaaS marketing plan for your business.
1. Craft Your Buyer’s Persona.
In marketing speak, a buyer persona is a representation of how your ideal customer will behave. It is a hypothetical representation of the characteristics, activities, and livelihoods of your customers. It is effectively your target audience that will help you make better decisions, improve engagement, and boost conversions.
“Done right, your buyer persona is a valuable tool that will help you understand your target audience on a deeper level.”
These insights will allow you to write more targeted copy that resonates deeply with potential customers, thus providing you with better returns on the investment that you’re making in SaaS marketing.
One of the most common misconceptions of SaaS startups is creating too many buyer personas. Let’s make this easy for you.
The key to any marketing plan for SaaS companies is to start with one of the best customers and create content aimed at making that customer your ideal client.
You can start by creating personas that capture the experiences of your ideal target customer and figure out what problems are important for them.
Your audience wants to learn how your product or service can solve their problem. How does it fit into their lives? How can it improve their life in some way? Take note!
2. Create Content That Your Audience Can Relate To.
If you’ve got a SaaS product, then you need to understand that your target audience has been inundated with similar messages. Your prospects already know that they can use the internet to find almost any information that’s relevant to their interests.
This means that you either have to produce information and content that is timely, value-oriented, and actionable—or get out of the way so someone else can step in and do it for you. There are no exceptions to your marketing plan.
Take a look at what comes up when you search for “how to market your SaaS product”
Image Source: Google
Each component of these results is optimized for lead nurturing and lead generation. After all, that’s the primary goal of an ideal SaaS-based marketing plan.
However, if you want this approach to work for your business, you’ll need to do more than just produce a blog post every few weeks.
With content marketing coming into the picture, a good SaaS product with a good content marketing strategy is no longer enough. The new age of traction requires brands to be willing to put in the time it takes to find unique angles for their brand.
3. Attract Leads With Freemiums
While traditional marketing was designed with lengthy sales cycles and larger up-front expenditures, SaaS is about delivering product marketing and services in a flexible way to customers.
It works on subscription-based pricing models, which means that instead of paying a flat fee for a piece of software upfront, the customer pays a regular fee on a monthly or yearly basis.
So, to have a thorough understanding of how the product works before committing, SaaS providers offer trial periods that give them access to the software without charge.
“In fact, one of the best lead generation methods for SaaS marketers to create leads and increase conversions is with a free trial.”
Some companies sell their subscriptions through demos and trials indefinitely as part of their marketing plan – but with limited functions. Others rely on product demonstrations and never provide full access to their solution before they become paying customers.
4. Nurture Leads to Become Subscribers
Everything about lead nurturing is designed to help you work with your leads, not against them. With a strategically planned lead nurturing funnel, you’ll slowly introduce your brand to your audience, increasing the chances that when they’re ready to become customers, they just might think of you first.
Nurturing for a SaaS product is much different than a traditional product. So, when it comes to the former, customers get a clear timeline, i.e. till the free trial ends.
But, if the trial ends without any new action, the likelihood of no conversion is high. But, a good marketing plan can help you turn the table around.
For example, you can keep shooting emails to your customers during the trial period about the additional premium features they are missing out on. You can also send emails that establish your brand as a thought leader in your niche. Including links to blogs and webinars that cover similar themes works too.
By the end of the trial period, it is a good practice to schedule sales calls, given the customer’s expected commitment.
5. Retain Your Subscribers
Retention leads to profitability, so reducing churn is the primary strategy for a profitable business.
What is the best way to retain your customers? Here is a list of some best practices for your ideal marketing plan.
- Know who your customers are. Recognize the purpose for which customers are “hiring your product,” and focus your onboarding on attaining that goal.
- Pick your aha moment and get users there as soon as possible.
- User journeys should be mapped out and benchmarked. Create a path that will lead them through crucial elements and assist them in achieving their goal.
- Never stop educating your customers. Even after consumers have been onboarded, you should continue to educate them. Provide clients with helpful insights, training, and instruction so they can get the most out of the product.
- Use multiple channels to communicate. Catch them in the right place at the right time. For example, phone calls could be used to engage existing enterprise customers with extra attention. SMS can be sent very close to a customer’s contract expiration date to drive an immediate action out of them.
- Reassert your value proposition. In case the customer forgets, remind them of it. A value proposition that attracts a customer should be the same value proposition that retains the customer.
- Upsell. SaaS upsells are a powerful way to increase profits with existing customers. After the initial sale, you can offer them more support, special training, or extra features for more money in your marketing plan. Many times, customers do not mind paying extra, provided you are not ripping them off.
- Schedule regular interactions. Stay in touch with your SaaS customers. The more frequently you can do so without coming off as aggressive, the more likely you are to retain a good percentage of these customers.
- Introduce a loyalty program. A loyalty program shouldn’t cost a lot and should be easy to administer in your marketing plan. Giving your customers a little discount from time to time can go a long way towards encouraging engagement.
- Exceptional customer support. Most customers won’t contact you with a problem unless they’re feeling the pressure. So, monitor support ticket volume and look for other patterns to see what is causing pain for your customers. Either prevent it from happening in the first place or deal with it as soon as possible.
6. Experiment With Your Pricing.
Pricing is one of the most vital components of marketing for almost any kind of company, but it’s especially true for SaaS companies. Traditional marketing wouldn’t normally consider pricing in an ideal marketing plan, but it is definitely part of the overall strategy within the SaaS model.
The majority of businesses don’t spend enough time on their pricing strategy. But the right strategy can help you retain more customers.
There are all sorts of different ways you can offer a subscription to your SaaS software. Many SaaS founders will opt for month-to-month payment plans, while others may prefer to explain that their software is more affordable up-front and then encourage customers to break the contract if they aren’t completely satisfied.
For example, you could offer your SaaS product free for the first 14 days, then start charging from the 15th day. Or you could make your trial last 30 days instead of 14.
An alternative is to give your customers the first month free and then increase the price. But that would risk the increase of customer churn in your marketing plan.
Similarly, if you are a SaaS company trying to get users to switch from a monthly plan to an annual plan. Offering a “free month” may be more effective than offering 10% off the renewal price, even though the latter is technically a better deal.
Image Source: Priceintelligently.com
7. A Referral-Based Marketing Plan.
Add a referral-based marketing plan to your software that allows your customers to spread the word about how great your product is. Perhaps they can even collect a discount for each customer they refer.
According to AppVirality, buyers are four times more likely to purchase a product if they hear about it from a friend, and their lifetime value is 16% higher. Rewards points, loyalty programs, and discounts are all effective ways to acquire new customers. Thus, if you implement these tactics you will get more customers – plain and simple.
Let’s dig into the different referral program ideas for SaaS.
- Referral bonus cash: Cash is still king. What’s a better motivator than hard cash?
- Discounted bill: Non-cash incentives are more successful than cash benefits at increasing referral performance.
- Earn and redeem: It works for acquiring new customers. That’s because they can’t use the same code twice for a discount. But if they refer their friends, they can earn credit for discounts whenever other people in their network sign up.
- Affiliate program: Users that enroll in an affiliate program receive a fixed commission for each referral they make. It can be a fixed fee or a percentage of the sale price.
10 Crucial Metrics You Need to Track for Your SaaS Marketing Plan
Whether you’re a fan of tracking weekly, daily, or monthly metrics, the common denominator is that they can all be lumped under your SaaS marketing plan. The key to successful SaaS marketing lies in identifying and maintaining the highest quality KPIs (key performance indicators).
The right ones will allow you to drive results and keep you laser-focused. Here are ten crucial metrics you need to track if you don’t want to lose sight of your goals.
- Unique Visitors: Unique visitors are the individuals that come to your website in a given timeframe. For example, if you run a blog, unique visitors will be the people who read your site in one visit.
- aLeads: You will want to break this down into two sub-categories:
- MQL (Marketing Qualified Leads): They are contacts that have triggered multiple “buyer signals” like downloading product information, visiting a competitive comparison guide, and asking for a sales conversation. These leads have demonstrated a high level of interest and are “qualified” in your marketing plan.
- SQL (Sales Qualified Leads): They are prospective buyers that are ready to move into your sales process. These leads are usually in the final steps of the buying cycle. Typically, they’ve expressed enough interest in your product or service that they’re ready to talk to a sales team.
- Customer Acquisition Cost: Customer acquisition cost is an important metric used to evaluate how much it costs to acquire a new customer.
Image source: Profitwell.com
- CLV:CAC Ratio: The Customer Lifetime Value (CLV) and Customer Acquisition Cost (CAC) ratio combine the lifetime value of your customers with the cost of acquiring them into a single metric.
Image source: Hubsell.com
- Conversions: Try to track customer conversions as precisely as possible in your marketing plan. Following are a few examples:
- Leads to Customer– How well is your funnel converting leads to customers?
- Visitors to Leads– How are you converting website visitors into a viable business opportunity?
- Ratio of Leads and MQL to SQL– How are you transforming hand-raisers into real opportunities?
- Signup to paid conversion: Perhaps you’re racking up signups and activations, but that doesn’t mean you’re making money? Identify your average signup to paid conversion rate over the span of a year. This will help you to:
- Estimate the number of paid conversions from a group of signups.
- Improve ROI measurement.
- Identify breakthroughs and try to move them forward to close the time gap between freemium and premium plans.
- Customer Churn: Churn levels (the percentage of customers canceling a subscription) are an important metric in your marketing plan. It reveals if your product is relevant to your customer as well as how the onboarding and support process works.
Image source: Clevertap.com
- Monthly Recurring Revenue (or MRR): This is the total monthly revenue that your SaaS company bills. You can extract this data directly from your billing system.
- Cost-to-Service or CTS): This is a consolidation of the following:
- Cost of maintaining your Customer Success team (onboarding, support)
- Cost of retaining your customers (loyalty campaigns, promotions)
- Infrastructure and product (cloud capacity, engineering investments)
- Activations: Activations or Product Qualified Lead can occur whether or not someone has paid for your product. Perhaps your product has a freemium version or a trial period. Because they haven’t purchased from you yet, someone can still activate your solution, making them product qualified leads.
Are You Ready To Re-Define Your Saas Marketing Plan?
While the market is always changing, it’s important to understand that your team is a vital part of the SaaS funnel. Teams that understand their importance and work hard to engage with new prospects and existing customers daily stand to outperform other teams.
But then, SaaS can also be challenging to market at times. But, these tips will help you build a successful marketing plan and retain customers for a very long time. All you need to do is track the performance of these strategies and keep optimizing them for better results.
Is there anything else that we skipped? Please let us know in the comment section below.