The SaaS industry has experienced meteoric growth over the last half-decade. Gartner estimates that the Cloud Application Services market will generate approximately $145 billion in 2022.  

But the marketing and sales processes for SaaS are quite different from traditional businesses.

Why is that? 

Today, we’ll discuss some of the factors that make SaaS marketing a unique challenge.  

#1 The Sales Funnels are Different

The sales funnels between a normal product and a SaaS product are not the same. With a traditional good or service, the phases typically follow:

  • Awareness
  • Consideration
  • Decision
  • Purchase
  • Loyalty
  • Advocacy 

But SaaS marketing models tend to be subscription-based. And because they’re often expensive and a challenge to implement company-wide, there’s a lot more consideration and deliberation that goes into purchase. 

As a result, the SaaS sales funnel often looks like this:

  • Awareness
  • Acquisition 
  • Activation
  • Retention
  • Referral
  • Revenue 

As a result, marketers must take a long-term approach. This brings us to our next point. 

#2 Customer Retention Matters as Much as Customer Acquisition

With the traditional sales model, the goal of the marketing team ends with a sale. After that, it’s onto the next lead. However, with SaaS marketing, retention is every bit as important as acquisition. Per Forbes: 

  • A 5% increase in customer retention can increase a company’s profitability by 75%. 
  • 80% of your company’s future revenue will come from just 20% of your existing customers.   
  • Attracting new customers will cost your company 5 times more than keeping an existing customer. 

The SaaS model necessitates that companies constantly retarget their existing customer base for both renewal and opportunities to either cross-sell or up-sell. Customer churn is a significant concern. If you’re unable to continuously persuade your audience that yours is the best option, they’ll seek out a competitor that promises “more, cheaper, faster, etc.” 

#3 Lead Nurturing Is an Integral Strategy 

Often, SaaS products address a problem that many companies don’t even know they have—or are only vaguely aware of. Lead nurturing focuses on fostering relationships with potential clients, highlighting their pain points, and then convincing them that your SaaS product is the solution to that problem. 

At its essence, lead nurturing strategies leverage highly targeted information content and messaging, including:

  • Landing pages with forms
  • Chatbots
  • Content marketing
    • Blogs
    • White papers
    • eBooks
    • Video content
  • Email drip campaigns

#4 A Freemium Model 

Few products are given away freely. But, remember, the SaaS sales funnel is different.  

Acquisition is a critical stage. 

A freemium model allows warm leads to test out a limited-functionality product. This takes the sales pitch from theoretical to practical. Companies get hands-on experience to actually see how the SaaS product works and gauge whether it addresses their pain points.     

For many SaaS companies, the marketing teams’ goal is to then convince the would-be client to upgrade to a premium account. 

Semgeeks—Helping You Nurture Leads and Market Effectively

Your marketing strategy could be the difference between a valuable lifelong customer and an outright rejection. The tried and true methods that may have worked with other products or services don’t work for SaaS. 

Because SaaS is different, you must approach the marketing challenge from a new angle.  

Do you need help employing SaaS strategies? 

Semgeeks—a top-notch digital marketing agency—offers content creation services, PPC marketing, and other methods you can use to win over and retain SaaS customers. Download our latest SaaS marketing eBook to learn more. 

 

Sources 

 

Gartner. Gartner Forecasts Worldwide Public Cloud End-User Spending to Grow 23% in 2021 https://www.gartner.com/en/newsroom/press-releases/2021-04-21-gartner-forecasts-worldwide-public-cloud-end-user-spending-to-grow-23-percent-in-2021

 

Forbes. Customer Retention Tips for Entrepreneurs. https://www.forbes.com/sites/alexlawrence/2012/11/01/five-customer-retention-tips-for-entrepreneurs/?sh=906fc6e5e8df

 

Pete Schauer
Marketing Director

Pete Schauer is the Marketing Director with an MBA in Communications from William Paterson University. Leading client development and implementation of Brand strategy, he diligently works to ensure the delivery of a fully integrated and multi-solution approach. Schauer is married and has two dogs. In his free time, you can find him outdoors, scouting a new brewery, or playing trivia.