SaaS Marketing

What is SaaS Marketing?

By June 18, 2019 One Comment

SaaS marketing is a complex topic. There are many moving parts in its marketing machinery. It can be challenging to know where to start and difficult to master each one.

Marketing, in the traditional sense, is already hard. Add to the difficulty of a service that has no physical presence or proof of existence. SaaS offers services that are often built “in the cloud” and must be aimed at customers who can perceive value for their business.

This is a challenge for SaaS marketers and Facebook advertising companies. So, to clear the confusion and get to the core of the issue, let’s take a deep look at SaaS marketing and ways you can improve your online presence.

SaaS Marketing, Defined

SaaS marketing focuses on attracting people to its service. It requires detailed qualification processes that filter leads and the rate of acquisition.

Unlike traditional marketing, SaaS marketing is highly targeted to the specific needs of the business.

SaaS, of Software as a Service, is a cloud-based solution which has regular updates and added functionality. These are not one-time purchases and often require a variety of SaaS pricing models to generate recurring revenue.

This requires SaaS marketers to push and promote the value and benefits a service has for current and potential customers.

Giving It Away For Free?

If you were selling a physical product, would you give the entire thing away for free? Perhaps, if you’re selling strawberries in a market, you would allow people to sample a berry while you close the sale.

In the SaaS world, software is often given all away for free.

This might seem unthinkable, but SaaS marketing often involves total access to a software as a “free trial”. This is a SaaS strategy that leads to customer acquisition and onboarding.

Let’s look at the startup that became a huge international success not too long ago.

Dropbox exploded to a 4 billion dollar company in just 4 years. Here’s a close up of their stats:

  • Grew their revenue to around $116 million in 2012
  • 1.2 billion files are saved to Dropbox every 24 hours
  • Over 500 million users
  • Over 1200 employees
  • Installed on 500 million android devices
  • 12.7 million customers
  • $1.4 billion in revenue in 2018

In the beginning, Dropbox employed the premium model, providing 2GB for everyone to use Dropbox.

This isn’t the only company who experienced success by giving their stuff away for free. Phil Libin, CEO of Evernote said:

“…the easiest way to get 1 million people paying is to get 1 billion people using.”

Why is SaaS Different?

Aside from using a freemium model to attract a billion of users to your SaaS business, there are a few more things to consider with SaaS marketing.

For SaaS businesses, the sales cycle is significantly shorter than traditional businesses. Let’s compare a one-time purchase with a 5-figure price tag with a monthly subscription for a few hundred dollars (or less). It might be easier to convert on a lower price tag, however, the average sales cycle for SaaS is about 84.3 days, according to HubSpot.

This is the reason why so many SaaS companies give away their software for free.

Check out Intercom’s home page:

And browse on Mailchimp:

They both give away their service for free. However, you have to have a strategy if you want to succeed.

Startup and Scaling Strategy for SaaS Marketing

The process of buying or subscribing to SaaS services is quick, almost impulsive, and straight to the transaction.

At the point of purchase, new users are going to enter the platform and put it to use almost right away. This makes the nature of the SaaS business very fast paced.

In a well-written article by Joel York, he outlines SaaS Startup Strategy and three Sales models SaaS businesses should use.  When you have a low price and low complexity, it makes for a simple SaaS solution.

If you want to increase revenue, value, and profit, you’ll need a higher velocity in your sales process.

To succeed in the SaaS world, marketers must quickly create awareness, share educational content and automate as much of the business as possible to make the entire purchasing process seamless.

Use Knowledge to Your Advantage

In SaaS marketing, information is going to be a key influencer toward driving users and customers to your business.

One of the best sources to acquire users is going to come from a company’s blog. The information that is being leveraged is not only educational, it also drives users who may have questions about the service into giving it a try.

If you take a look at SocialSprount’s blog, they offer an incredible amount of information growing your social presence. They want you to read their blog, learn about social media, and, of course, subscribe to their service.

Instead of considering yourself as a SaaS marketer, consider yourself as an information guru, an expert on the service you provide and find ways to disseminate that information. The more you can propagate that information, the more sources of leads that are going to show interest and give sign up for a free trial.

Think Long Term

Once you get into the habit of marketing your SaaS business using information, the next step is to nurture and extend your users’ life cycle.

According to the Gartner Group, “80% of your company’s future revenue will come from just 20% of your existing customers.”

Just imagine, if you can increase customer retention by just a small percentage, you can substantially increase the profitability of your business.

Customer retention should be the fundamental focus of your SaaS marketing plan. Try to uncover the reasons why users signup, subscribe, or try your service and the reasons why they lose interest, close accounts, or stop altogether. The more you can learn about your customers, the better you can improve their experience and your profitability.

Remember, your customer retention efforts should always outweigh the time and energy you put into customer acquisition.

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Author Kevin Urrutia

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