What Actually is SaaSAs we know, the term “SaaS” stands for Software as a Service, but what actually is it? We can certainly use many difficult jargons and technical terms just to sound cool when describing SaaS. However, that’s not our purpose. Here, we will try to describe the concept of SaaS as simple as possible. And in essence, SaaS is a software product that:
- Hosted in the cloud, your users wouldn’t need to buy a CD, download the software, and no installation is required. This is the main characteristic of the SaaS products.
- Commonly, although not always, associated with the recurring revenue model. So, most SaaS products are sold with just a fraction of their full price. For example, the full one-time price of Microsoft Office Professional 2019 is $549,99, while we can get Office 365, —the SaaS subscription-based version— for just $59.99 a year.
- “Service” is a huge emphasis of the business: SaaS users will expect continuous patches and updates, expansions of new features, and reliable customer services as opposed when they purchased a one-time paid software.
Great Product Is Important, But Your SaaS Product Won’t Sell ItselfDavid Ogilvy, one of the legends in advertising, famously said that “great marketing only makes a bad product fail faster”. It is a common perception that a truly revolutionary product with real value will sell itself. For example, if there’s a cure for cancer tomorrow, it won’t need any marketing at all. On the other hand, no matter the amount of marketing efforts you put, you can’t sell a bad product with no value. However, creating a truly valuable product with undeniable value like the cure for cancer or the surefire way to get rich quick is very difficult, and we should assume that your SaaS product won’t sell itself. The first thing to focus on is the fact that—for any product/service—people aren’t really buying the product or service, but rather, the benefits they’ll get after purchasing your product. Understanding this fact is very important in selling any SaaS products, and regarding this, there are three important principles to consider:
1. Don’t tell, sellOne of the most common mistakes made by SaaS marketers is “telling” people about their product. We often put too much emphasis on communicating our key features, how our features are unique compared to our competitors, and so on. It’s not necessarily a bad thing, but there’s a big difference between telling your key features and actually selling your products. Why? Because again, people are attracted not to the product, not to the features of the product, but to the benefits and values they’ll get. Let’s use an example: Let’s say we are a B2B SaaS company selling an email automation software. Here, we can tell them about our key feature, which is Versatile A.I-based personalization tool to increase CTR Here, at the first glance, you might think that we already communicate the benefit of this feature, which is increasing CTR. However, what if we communicate this feature like this: With our A.I-based behavioral analytic tools, we can offer more personalization options for each of your customers, effectively increasing engagement. Very different, right? So, change your mindset. Instead of showcasing and telling your features, focus on communicating the benefits they can get from your product.
2. People only buy products from brands they can trustThe SaaS industry is a very competitive one, and is still growing to be even more competitive in the years to come. Meaning, getting our voice heard will be even harder. On the other hand, customers are now getting smarter, especially thanks to the fact that it’s now very easy to obtain information: customers will check various reviews, the reputation of the brand, and will compare different products before they decide on a purchase. So, maintaining your reputation is very important (link online reputation), from handling negative reviews to soliciting positive press to maintaining a positive online presence. Yet, sometimes it’s not enough. To truly succeed, we have to establish our position as the expert/thought leader of the industry: if your customers perceive you as the expert of email marketing, they are more likely to purchase an email marketing software from you.
3. Understanding your audience is the keyThis might be obvious, but also easier said than done. To properly communicate the benefits of our products, we would need to first understand our audience; to establish credibility, we would also need to understand our audience’s needs and provide appropriate value. This is a pretty broad subject on its own, but here are several key areas to consider:
- Before we can understand our audience, we have to define and identify our ideal audience. This is mainly done by developing a buyer persona. For B2B SaaS businesses, remember that there can be several different purchase decision makers in your target company, so you have to develop different buyer personas for each of these roles.
- Just as your customers now have various ways to access information about you—as mentioned above— you also have the same access for their information. Monitor the relevant social media channels, conduct surveys and interviews, and use various other ways to figure out your audience.
- Traditional market research and competitive analysis will always help. Don’t neglect these analytics aspect before you start planning your marketing and sales strategy.
Effective Sales Strategies for SaaSFor this part, we will discuss how we can translate these principles into actionable strategies. Based on our experiences with various SaaS businesses, here are they
1. Content MarketingIt is no secret that content marketing—or inbound marketing— is a really important aspect for any SaaS businesses nowadays. We can see how the SaaS industry leaders from HubSpot to Zendesk to Marketo all have a strong content marketing game. For SaaS businesses, we can even say that strong content pieces are just as important as the software product itself due to several reasons:
- The most important thing is that content/inbound marketing properly caters the three principles discussed above: it’s an effective way to establish credibility, it’s an effective medium to communicate your product’s benefits in an informative way, and it is very effective in addressing your audience’s needs.
- Most of SaaS businesses don’t have a significant physical presence, and content marketing (along with other channels like email marketing) is an effective way to maintain engagement with your audience
- Content/inbound marketing is more cost-effective compared to other marketing channels, while also being very effective especially in the lead generation stage
- As stated further above, the key is proper understanding of your audience, which is translated in content marketing as targeting the right keywords that are searched by your audience. This way, our content will be visible through SEO.
- The next step is translating these keywords into topics, where we can plan to include informative, actionable content. We can use various tools to assist this step, such as the popular BuzzSumo or Hubspot’s Blog Ideas Generator among other tools.
- It’s time to actually develop your content. Remember that, although technical optimizations like keyword density are important, we should first and foremost focus on developing a valuable content for human readers.
- No matter how good your content is, it won’t bring any value for your business if it’s not visible to your audience. Content promotion is just as important as the quality of your content, and you can use various channels from social media to utilizing influencers to promote your content.
2. Optimizing Your Free-Trial CampaignSimilar to content marketing, giving a free-trial demo in various forms is a common practice in SaaS businesses, simply because it’s that effective. Free-trial is a valuable opportunity where we can capture leads (link to lead generation) by letting our audience try our product and its key features. There are generally two main ways to give a free-trial option: first is to offer a free version of your product for an unlimited amount, usually with limited features where you can encourage them to buy the full product with unlocked features. The second way is to offer your full product within a limited time-frame. The first method is generally less popular nowadays simply because it’s costly: it is our nature to stick with a free product if it’s available, unless we absolutely need to pay (i.e., if we really need a specific feature). So, conversion rate can be quite low, and unless you can generate a lot (A LOT) of leads, you might lose money. So, the second option where we offer the full product in a limited time is generally much prefered, but it’s still tied to cost. To have a cost-efficient free-trial campaign with high ROI, here are some key principles you should understand:
- Remember that the main goal of your free-trial campaign is conversion, and thus the whole campaign should be optimized to convert a prospect into a paying customer as soon as possible. You might want to check our previous guide on conversion rate optimization (link).
- Use this free-trial period to actively nurture your prospects, which is mainly done through email marketing and content marketing. Again, design the whole experience to encourage purchase.
- Especially if you are a B2B SaaS business, there can be several different decision makers in the buying process. Consider all these possible participants, and optimize the campaign. For example, an IT manager might be more interested with the technical aspects and features, but might not be the final decision maker. On the other hand, a CEO might be more interested in ease of use. Consider the different possibilities, and so we go back to the importance of understanding your audience.
3. Outbound Marketing (Advertising)Although we have mentioned that inbound/content marketing is especially effective in the SaaS environment, doesn’t mean we should neglect the more traditional marketing activities such as advertising, which is now often known as “outbound” marketing. The thing about content or inbound marketing is that, although there’s no doubt that it’s effective, we will need to invest some time before we can see results. Yet, not all of us have this luxury of time. On the other hand, outbound marketing is guaranteed to generate short-term results. However, the issue here is whether it’s cost efficient with positive ROI. So, the key here to find the right balance between your inbound and outbound activities, the balance between time and cost. When implementing outbound marketing activities, here are the key areas to consider:
- Google Adwords and other PPC advertising channel remain the most popular (and effective) choices here. Combine this with SEO and content marketing to get the best results.
- Social media advertising is also a good option, Facebook Ads is an especially popular choice. The main advantage of using social media advertising is the size of audience, and most social media platforms offer versatile targeting options to target different demographics. In short, you have more options to target your ideal audience.
- A relatively new (and very effective) feature in the advertising world is remarketing (link to remarketing), which in essence is only showing your ads to those who have triggered certain actions (i.e. visited your site, visited your competitor’s site, etc.). Remarketing can be a very effective option to improve cost-efficiency.
- The key to a successful outbound marketing is proper targeting, the better you can target your most ideal audience, the better you can optimize your cost. This might require trials and errors, as well as a thorough market research to understand your audience.
4. Referral MarketingThe most effective way to achieve sales growth is arguably, when your existing customers are actively recommending your product to their peers and colleagues, the thing we know as customer advocacy. When your customer advocacy is high, you are virtually guaranteed to achieve exponential growth. However, we all know that turning customers into advocates is easier said than done. Referral, or sometimes called affiliate marketing is designed to artificially create this situation: we are paying people—usually via commission— as referral marketers to promote our products. Referrals are also often considered as the most qualified type of leads, the cost to convert a referral is often relatively low and won’t require a long sales cycle. There are several things to consider when implementing referral marketing:
- The amount of incentives is arguably the most important factor: give too much and you risk the quality of referrals and referral marketers,give too little and you might not get any interest. Finding the right balance is very important.
- There are various tools and software that can assist you in creating an optimized referral marketing campaign. Assess your options according to your audience and needs.
- Define what makes a good referral and a good referral marketer, because it can vary depending on your business goals and needs. Communicate these values properly with your referral marketers, so that it will improve your chance in getting high-quality referrals. For example, you can create a page or even an ebook for your referral marketers to explain these qualities.
- Make sure the required steps and overall process of asking for referrals are as easy as possible. The easier the whole process is, the more people will be encouraged to be your referral marketer.
5. Email MarketingEmail is still one of, if not the most effective platform to promote any products, with the average ROI of 3,800%, far higher than any other marketing channels. Email marketing is especially powerful in the lead nurturing stage, and will be a great companion for the other strategies discussed above. While email marketing is a pretty deep subject on its own, here are some key considerations to focus on:
- Personalizing your email messages is no longer an option. Remember that your average audience might receive more than ten promotional emails in a single day. At the very least, address them with their first name with an interesting subject line. Check out this guide by Campaign Monitor on more about email personalization.
- The idea is to deliver the right message to the right audience, just when they need it. This is made possible by email automation tools. You might want to check out our previous guide here (link drip marketing) to learn further about automated email marketing—or drip marketing—.
- Keep your subject line short and to the point, but make sure it’s engaging. Your subject line will be the most important factor in determining open rate.
- To optimize conversion rate, you can use various forms of media within your email content, from infographics to a short video. However, make sure it’s comprehensive and not too long.
- Make sure your email content is mobile-responsive. If you include any forms, don’t use too many fields and make sure all buttons are clickable from a mobile device.