For most SaaS businesses, acquiring and converting customers alone aren’t enough. The median annual churn rate of SaaS businesses that make less than $10 million is 20%. Meaning, one out of five customers you’ve acquired with blood, sweat, and tears will leave you within the year.
With that being said, any SaaS businesses looking to achieve success and growth will need to optimize their websites for both conversion and retention.
What exactly are they?
Conversion refers to when a website visitor takes a desired action: signing up for your SaaS product’s free trial, requesting a demo, or subscribing to your product and becoming a paying customer. Therefore, conversion rate refers to the percentage of visitors who take this desired action out of the total number of website visitors.
Retention, on the other hand, is when a customer (who has previously converted) makes a repeat purchase or continues their subscription over time—without canceling or downgrading their plans. In most SaaS businesses, the retention rate is the percentage of customers who stay subscribed to the business out of the total number of customers.
For SaaS businesses, both conversion and retention are critical since they will significantly impact revenue generation, potential growth, and profitability. The higher your conversion and retention rates, the more revenue the business will generate.
In this post, you’ll learn how to properly optimize your SaaS website for both conversion and retention, and here we will explore five main strategies:
- Properly developing a unique value proposition (UVP) and communicating it clearly on the website
- Leveraging a variety of marketing channels to drive more organic and referral traffic and generate more leads
- Nurture your leads by publishing relevant, valuable content and offers throughout the customer journey
- Establish and communicate a fair pricing strategy in place that aligns with your company’s value and maximizes retention
- Incorporate social proof into the website to establish credibility and build trust
By applying these strategies, you’ll be able to boost your SaaS business’s conversion and retention rates, drive sustainable revenue, and grow your SaaS business faster.
Without further ado, let us begin right away.
- Define and communicate a unique value proposition (UVP)
You won’t be able to optimize your SaaS website if you don’t know what’s your unique value proposition (UVP) and how to communicate it throughout the website.
So, the first thing you should do is to define this unique value proposition (UVP), which is a statement that summarizes what your product or service—in this case, your SaaS product—does, who is its target audience, and especially how the product is unique from other alternatives in the market.
The UVP should essentially answer this question: why should someone choose your SaaS product and not your competitors?
In practice, a well-crafted, unique value proposition can help you attract and retain customers in several ways:
- It captures the target audience’s attention with a compelling message
- It sets their expectations by highlighting the benefits and impacts of your product
- Differentiating your SaaS product from competitors and highlighting the product’s unique values
- Establishing trust by creating a positive first impression
Developing an effective UVP
To craft an effective and powerful SaaS UVP, there are two main pillars to consider:
- A thorough understanding of your target audience: their goals, pain points, priorities, behaviors, and how your SaaS product can help them.
- Understanding your direct and indirect competitors’ strengths and weaknesses, so you can identify how your product can stand out from them
Defining and understanding your target audience
A target audience is, simply put, a group of consumers you want to target with your marketing efforts so they can be your website’s visitors.
There are many approaches to identifying your target audiences, including:
- Analyzing your existing customer base: if you already have an established website and/or a sizable number of customers, an effective way you can use is to look at your CRM (or other tools where you store customer data) and analyze it. You can interview your existing clients or conduct surveys and ask them questions about their needs, preferences, challenges when using your product, and their feedback.
- Market research: you can conduct market research on your own or pay a research center/marketing agency to identify industry trends and identify the size, characteristics, growth, and potential of your target market.
- Competitive analysis: probably the best approach if you are a brand-new SaaS business without any customer base. You can learn from your competitors’ marketing approaches, customer reviews/testimonials, case studies, and so on to see who they are targeting and their own UVP. It can be useful to identify opportunities and gaps they are leaving in your market.
- Define who your target audience is not: another effective—and often easier—approach is to simply exclude those who aren’t a good fit for your SaaS product. This way, you can avoid wasting time targeting those who won’t benefit from your offer and won’t convert.
- Create buyer personas: buyer personas are semi-fictional representations of your ideal customers based on the data you’ve gathered through other means. The buyer personas should include interests, goals, behaviors, personal characteristics, pain points, and more.
Another pillar of developing an effective UVP is to research and compare your competitors with respect to your SaaS product and marketing strategy, with the goals of identifying their strengths and weaknesses—and yours— and finding opportunities and gaps in the market.
For SaaS businesses, here are some effective steps to conduct competitive analysis:
- Identify your direct and indirect competitors. You can use criteria such as similar target audience, market share, pricing, marketing channels (i.e., they rank on your target keywords for SEO campaigns), similar product features, etc.
- Examine their product features, functionality, design approach, quality, and overall offerings. Assess how they meet their target audience’s expectations and needs. Also, compare their UVPs and pricing models.
- Assess how they approach their marketing and content strategy: website design, types of content they are publishing, SEO performance, social media presence, case studies, customer reviews, etc.
- Observer their sales tactics: led generation methods, pricing offers, negotiations, discount offers, upsell strategies, sales cycle, etc. If you can, also assess their revenue growth, CLV, churn rate, and other metrics to evaluate how they retain customers.
- Conduct a SWOT analysis and list your SaaS company’s strengths and weaknesses, as well as opportunities and threats, based on your competitive analysis findings.
Example of UVP
A simple formula of UVP you can use is:
[Product name] helps [target audience] [achieve goal] by [unique feature or benefit].
For example, assume your SaaS product name is “AccountMe,” a fictional accounting SaaS product. Then, a simple UVP statement is:
AccountMe helps accounting and finance teams streamline the accounting processes by providing cloud-based accounting automation tools.
Of course, this formula shouldn’t need to be set in stone, and you can tweak it as needed to suit your product’s needs and your target audience’s preferences. However, make sure your UVP is clear, specific, concise, and aligns with your business’s objectives.
How to display and communicate your UVP
Now that you’ve written a well-crafted UVP, you need to display it prominently on your website.
The best place to display your UVP is your landing page and homepage, ideally above the fold (meaning, the part of the page that is visible to users without them scrolling.) This is to make sure you immediately capture visitors’ attention as soon as they land on your website.
You can also support your UVP with other elements on the website to amplify its presence, including:
- A catchy tagline or headline that summarizes your SaaS product’s main values and benefits
- A subheadline to expand the tagline/headline by adding relevant details
- A compelling image or video that showcases the SaaS product in action or demonstrates its benefits
- A prominent CTA (call-to-action) button that invites visitors to take the desired action (sign up for a newsletter, request a demo, sign up for a free trial, etc.)
- Social proofs like testimonials, client reviews, case studies, logos of previous clients/partners, ratings, etc.
- List of key features and/or benefits in well-structured bullet points.
2. Leverage different marketing channels to drive traffic and generate more leads
To drive more conversion and retention, it’s critical to support the website with other marketing channels, be it social media, email marketing, paid advertising, SEO, and more.
Today, there is a wide variety of marketing channels available to help you reach and communicate with your target audience. Different marketing channels have different strengths and weaknesses: one may be more effective in engaging a specific type of audience than the others. This is why it’s important to use a combination of them to drive more traffic to your website and generate more leads.
Some of the most popular and effective marketing channels to attract SaaS customers are:
In marketing SaaS products, content is literally king.
Content marketing refers to creating and distributing valuable, high-quality, and relevant content to:
- Establish your SaaS business’s credibility and trustworthiness as an expert in your niche
- Attract potential customers that are looking for information related to your niche or your specific SaaS product
- Educate prospects about the value and benefits of your SaaS products so they are more compelled to make a purchase
- Providing information and educating existing customers so they can make the most of your SaaS product to encourage retention
- For complex or highly innovative SaaS products, content marketing is critical for explaining the product’s values, which may be difficult to understand initially
In practice, content marketing for SaaS can come in many different forms, including but not limited to:
- Blog posts: should be the main pillar of your content marketing, having a regularly updated blog selection can help your website rank for important keywords on search engines, which will be a sustainable source of traffic. In your blog, you should publish articles that cover topics related to your niche or product. Aim to provide valuable information, answer frequently asked questions, showcase success stories, case studies, and more.
- eBooks, white papers, research reports: more in-depth and long-form textual content can provide more value to your target audience by diving deep into a specific problem or topic. You can publish this in-depth content as gated content to capture leads (i.e., offering them as downloadable content in exchange for visitors’ email addresses.)
- Webinars: webinars have grown increasingly popular in recent years. You can use webinars to inform, educate, and even entertain your target audience. Can be effective for establishing thought leadership, generating leads, and maximizing retention. Leverage webinars to up-sell or cross-sell attendees, offer special deals, and so on.
- Podcasts: you can produce an audio show to cover topics related to your niche or industry, which can be an effective medium for attracting the audience that prefers audio-based content (i.e., during commuting). You can also use podcasts to drive more traffic to your website (by adding a link to your website on the show’s description) or social media.
- Video: you can use the video format to showcase your SaaS product in action, customer success stories, or specific benefits when using your product. Can be a very effective medium for capturing attention and for conveying complex ideas. Effective use of video content can also boost your site’s SEO performance by driving higher social shares and conversions.
Of course, this is not an exhaustive list, and the idea is to mix and match different content marketing channels to amplify your reach and attract more visitors. The key to success is to consistently publish high-quality content to help your reader solve their problems or improve their quality of life/work.
No matter how good and relevant your content is, it won’t really bring any value to your SaaS business if you can’t get anyone to read it.
Content promotion is just as, if not even more important than the content creation process, and SEO remains one of the best ways to market your content.
SEO, or Search Engine Optimization, is optimization efforts on your website and its content so it can rank higher on Google and search engines’ SERPs (Search Engine Results Pages) for relevant keywords, which in turn, will drive organic traffic to the website.
SEO for SaaS is a deep subject on its own and deserves its own guide. Yet, below are the basic steps for implementing SEO for your SaaS website:
- Run a thorough site audit to assess your site’s current SEO performance and identify any technical issues that may affect your site’s performance (i.e., page speed) or the search engine’s ability to crawl and index your site.
- Keyword research. Find relevant keywords that your target audience searches for when they are looking for information related to your niche or product. During keyword research, we should also weigh whether the competition/difficulty for the keyword is appropriate.
- Writing SEO-optimized content. Above anything else, we should focus on creating content that meets the target audience’s search intent and answers questions, showcases use cases, or provides value in any other way. In-depth, long-form content that discusses a comprehensive topic or problem tends to perform better. When developing the content, maintain the following SEO best practices:
- Use the target keywords naturally, but focus on providing value to human readers.
- Optimize title tags and meta descriptions. Use target keywords but focus on making them attractive to entice clicks.
- Use headings and subheadings (H1, H2, H3). Include keywords naturally when possible, but use them to structure your content.
- Break up text and improve readability by using short paragraphs, lists, bullet points, etc.
- Including images, videos, infographics, etc. to engage readers
- Link to other relevant pages on your website (internal links) and to other authoritative websites (external links) to readers with navigability and improve the content’s credibility
- Optimizing the technical factors of the website:
- Ensuring optimal page speed
- Optimizing the website for mobile devices (i.e., with a mobile-responsive template)
- Make sure only one version of your website is accessible. Choose one preferred version and redirect all other versions (i.e., different top-level domains) using 301 redirects
- Use HTTPS
- Implement structured data (schema.org markup) to help search engines understand the context and meaning behind your content
- Fix any broken pages on the website
- Off-page optimizations:
- Getting high-quality links from authoritative websites in your industry or niche (link building)
- Getting reviews and testimonials from your customers on your website, social media, or review platforms (G2, Capterra, etc.)
- Get mentions on social media, including from relevant influencers
- Monitor performance. SEO is a long-term game, so it’s critical to monitor and measure performance metrics and optimize strategy accordingly.
Paying for advertising on search engines (Google PPC ads), social media platforms, and even traditional platforms (i.e., TV ads) in some cases, can help you reach a large audience much faster and generate leads.
You can also use retargeting/remarketing to show ads to people who have visited your website before but did not take the desired action. Retargeting can help remind them of your UVP and persuade them to come back to your website, making it an effective way to increase conversions.
To maximize the performance of these ads, make sure to refine your targeting, and A/B test different elements of the ad (headlines, copy, offers, etc.)
Email marketing involves sending personalized emails to customers or subscribers at the right time and based on their preferences and behavior.
Despite all the newer marketing channels and technologies, email remains a very effective marketing channel, especially in nurturing leads, increasing retention, winning back lost customers, and upselling existing customers.
The keys to successful email marketing are how well you can build an email database (via lead generation), and personalization of your messages.
How to choose the right marketing channels
Of course, the marketing channels we’ve discussed above aren’t exhaustive, and there are many more channels you can leverage. Yet, whether you can choose the right one for your SaaS business will literally make or break your marketing success.
There is no one-size-fits-all answer to how should you choose the right marketing channels for your SaaS business. However, here are some key factors to consider:
- Your goals: in this case, we’d want to generate more leads, increase conversions, and maximize retention. However, there may be other goals you’d want to consider. Different marketing channels would produce different impacts on different metrics and may help you achieve certain goals better than other channels.
- Your budget: pretty self-explanatory, some channels are more expensive than others. Consider how much money you have to spend on marketing, and balance the cost-effectiveness of each channel with the expected ROI.
- Your industry: some marketing channels are more popular (and effective) in certain industries and niches. Evaluate what your competitors are doing, as well as your customers’ online behaviors and preferences. Research what works well for other companies in your niche, and adopt the best practices.
Measuring the effectiveness of different marketing channels
It’s critical not to treat your marketing campaigns as a one-and-done, but instead, you should regularly track the KPIs (Key Performance Indicators) of each channel and adjust your campaigns as needed. This is to ensure the cost-effectiveness of each channel and maximize the ROI of your investment.
Each marketing channel is unique, and you may need to monitor different metrics with each of them. However, some of the most important metrics to keep track of are:
- Traffic: How many visitors come to your website from the marketing channel? Consider both organic and referral traffic.
- Leads: How many website visitors from each channel become leads by signing up for a free trial an email newsletter, or a demo?
- Lead-to-sale conversion: How many leads become paying customers from each channel?
- Revenue: How much revenue do you generate from each channel?
- Cost per acquisition (CPA): How much does it cost you in total to acquire a new customer from each channel?
- Customer lifetime value (CLV): How much revenue does a customer generate over their relationship with your business?
Measuring these KPIs regularly will help you compare how effectively each channel performs against others, so you can identify what works well and what can be improved.
3. Nurture your leads throughout the customer journey
Most of the marketing channels we’ve discussed above are focused on two things:
- Driving traffic to the website, then
- Capturing the visitors’ contact information, for example by encouraging them to sign up for a free trial
Once website visitors submitted their contact information, they are effectively converted into leads. This is why the process is called “lead generation.”
However, most leads are not ready to purchase your SaaS product right away. Some may even not have the awareness that they need your SaaS product or don’t really know how your product can help solve their problem.
This is where lead nurturing comes in.
Lead nurturing is the process of establishing and strengthening your SaaS company’s relationship with a lead, engaging and convincing them until they are ready to buy or subscribe to your SaaaS product.
The same lead nurturing effort can also be used to convert existing customers into advocates: by maintaining relationships and providing them with valuable content to help them make the most of your SaaS product, you can improve their satisfaction level, maximize retention, and encourage them to recommend your SaaS product to their peers.
The anatomy of lead nurturing
Lead nurturing, in a nutshell, is about sending a series of messages to the lead. However, it’s not as simple as simply sending one email over another, but each message sent should have a clear and concise objective, and ideally should encourage the lead to take a desirable action so they can move to the next stage of the sales cycle.
For SaaS businesses, an effective lead nurturing initiative is critical for:
- Building trust and credibility with your leads. Leads will only purchase products or services from vendors they trust and perceive as credible.
- Educate your leads about their problem or the information they are looking for, and inform them how your SaaS product is the most viable solution
- If you offer free trials or a freemium version of your SaaS product, lead nurturing is very important to convert those in this tier into paying customers
Some of the steps involved in lead nurturing are:
- Mapping your customer’s buyer journey. This is critical so you can identify what strategies you should take to move them to the next steps.
- Segmenting your leads based on criteria like behaviors, characteristics, goals, stages in the buyer’s journey, and so on. This will help you in crafting personalized messages that can resonate with each segment’s unique needs and preferences.
- Crafting targeted content for each segment and stage of the buyer’s journey (sales/marketing funnel.) The focus is to educate your target audience about the benefits of your product or service in solving their problems or improving their work/life quality.
- Choosing the best channels to communicate with your leads. This may include email, phone calls, SMS, or even retargeting ads. You may want to mix and match different channels to amplify the visibility and touchpoints with your leads.
- For email marketing, automate and personalize your messages using capable email marketing platforms (i.e., MailChimp, Drip, ConvertKit, etc.)
- Optimize your content and offers for conversion with well-crafted, clear, and compelling call-to-actions (CTAs), conversion-optimized landing pages, and forms.
- Set up a lead-scoring system to identify your leads’ qualification levels. This can help you prioritize and personalize your efforts. The most sales-qualified leads should be passed to the sales team for conversion.
- Track and measure the performance of your lead nurturing campaign by monitoring metrics such as open rates, click-through rates, revenue generated, lead-to-customer conversion rates, customer retention rates, and so on. Optimize your strategy accordingly so you can optimize your results.
Examples of lead nurturing strategies for SaaS businesses
As discussed, SaaS businesses can leverage different channels and tactics in their lead-nurturing campaigns. The key is to identify and understand their target audience’s preferences and online behaviors so you can choose the best possible channel and tactic in every scenario.
With that being said, below are some examples of lead nurturing tactics and strategies you can use as inspiration:
- Content marketing: content marketing should be the core of any lead-nurturing campaign. You should leverage different types of content such as blog posts, videos, webinars, or podcasts that provide value to your leads and educate them about your SaaS product as a potential solution for their problems.
- Lead onboarding: lead onboarding refers to a series of (automated) emails that you send after someone submitted their contact information (requested your lead magnet, signed up to your free trial program, etc.) to welcome them, introduce them to your SaaS product’s key features and benefits, and especially educate them how your solution can help solve the problem they are facing.
- Referral campaign: this tactic involves partnering with relevant influencers, companies, publishers, and affiliate marketers who will promote your SaaS product to their audience (typically in exchange for commissions. Can be very effective in helping your capture and nurture leads who trust and follow these affiliates’ recommendations. Another form of this strategy is to incentivize existing customers to refer new leads or customers to your SaS product o leverage word-of-mouth marketing.
- Free-trial and demo: an effective strategy for SaaS business is to offer a free trial, a demo, or a freemium version of the product to capture leads, then use the free-trial period to aggressively nurture this lead by showcasing your product’s features and benefits, as well as the quality of your service (i.e. customer support.)
- Social proofs: publish case studies, customer reviews, testimonials, and white papers covering how your SaaS product helped solve real problems for real customers. This is one of the most effective forms of lead nurturing tactics in SaaS, as it can effectively establish trust and credibility with your leads while showcasing what they can expect from using your SaaS product.
Effective SaaS lead nurturing: best practices
While lead nurturing is undoubtedly important, the actual implementation can be time-consuming and challenging. To tackle these potential challenges, SaaS companies should maintain the following best practices:
- Choosing the right communication channels to interact and engage with your leads is critical. Use multi-channel marketing approaches to reach your leads in the channels/platforms/devices they’d prefer.
- Make sure to maintain an optimal alignment between your sales and marketing teams. In lead nurturing, consistency of messaging is key. Aligning your sales and marketing teams alone can significantly help in ensuring a positive and seamless experience for all your leads.
- Create and send personalized content that matches the specific lead’s stage in the buyer’s journey/marketing funnel and their specific buyer persona.
- When it comes to email messages/content, emails should be personalized and address your lead’s needs, interests, goals, and pain points.
- Leverage the appropriate lead scoring system according to your needs so you can identify and prioritize your most qualified leads.
- Follow up regularly with your leads—but don’t overdo it not to annoy them—to maintain engagement and trust.
- Measure your results regularly, and make data-driven decisions to optimize your lead nurturing campaigns.
4. Optimize your pricing strategy to encourage loyalty
Obviously, how much you charge for your SEO SaaS product or service also affects your conversion and retention rates.
For your leads, your pricing will influence how they perceive your value proposition, and how satisfied they are with your offering. On the other hand, it will influence existing customers’ satisfaction—which will affect retention and advocacy.
There are three main pricing models used by modern SaaS companies you can adopt:
This pricing model allows customers to access a free version of the SaaS product, typically with a limited/basic set of features. If they want to access more features or benefits, then they have the option to upgrade and pay more.
This model can attract a large user base with the free version of the product, build brand awareness, and create word-of-mouth referrals. However, this model has a drawback that it can be difficult to convert free users to paying customers in practice. If not managed well, the freemium model can also lower the perceived value of the SaaS product.
Also, since you’ll also need to maintain customer service excellence for the free users, it can increase the customer support cost.
This model charges users a recurring subscription fee (monthly or annually) to access your SaaS product.
A subscription-based model provides companies with a predictable revenue stream. Encouraging customers with a longer commitment (i.e., annual subscription) can also help reduce churn rates and maximize retention/loyalty.
The drawback of this model is that it will require you to constantly update and improve the SaaS product (or they may cancel the subscription). This model can also face price sensitivity from customers, and they may easily switch to a cheaper competitor when the opportunity arises. Also, this model naturally increases customer acquisition costs (CACs) and it will take longer before you can reach BEP.
- Tiered model
This model, as the name suggests, involves offering multiple plans with different levels of features or benefits at different prices.
The main benefit of this model is that you can cater to more segments of customers based on their needs, requirements, and especially budget. With this model you’ll also have increased opportunities for upselling and cross-selling your products, maximizing your revenue potential.
However, sometimes providing too many options may confuse potential customers, creating a condition we call option paralysis. If the tiers are not well-defined or properly aligned with value, it can also lower overall customer satisfaction. Gaps between tiers, when not managed properly, may also discourage upgrades.
Choosing the right pricing model
In practice, you can combine these pricing models together, like offering a free version of your SaaS product and then they can upgrade to different (tiered) plans by paying a subscription fee. Below are some considerations on how you should choose the best pricing model for your SaaS company:
- Cost: carefully calculate how much it costs you to produce and deliver your SaaS product, and decide how much profit margin you’d like to achieve (that is still reasonable.) Factor in variable costs such as marketing expenses, taxes, and customer support costs.
- Demand: If the market demand for your product is high, then customers would be willing to pay more, and you may be able to charge a higher premium and vice versa. Also, analyze how your competitors price their SaaS products so you can decide how to differentiate yourself from them.
- Value: estimate how much value you provide to your customers through the SaaS product. Also consider how effectively you can communicate this value to influence perception, and whether you can add more features, benefits, or incentives to justify your price against the product’s value.
5. Incorporate social proof into your website
People tend to follow the opinions and actions of others, which is highly elevated in this age of social media.
When you see a long queue for a restaurant, you’re more likely to want to visit this restaurant, and the same principle also applies to SaaS products. This is why social proof matters.
Incorporating social proofs on your website can influence the decision-making process of leads to finally purchase your SaaS Products, and may also encourage existing customers to stay loyal to your product.
You can display various types of social proof on your SaaS website, including but not limited to:
- Reviews: written feedback from users who have used your SaaS product. Encourage customers to leave reviews on your website, social media, or relevant software reviews sites like G2 or Capterra.
- Ratings: star-based or numerical evaluations from users for your SaaS product. Ratings may be easier to comprehend for some users and can be recognized by search engines.
- Testimonials: quotes from users/customers who express their satisfaction or appreciation for your SaaS product, typically gathered by the SaaS company.
- Case studies: detailed stories from customers who described how they use your SaaS product to solve their problems or achieve a specific goal.
- Logos: if you are a B2B SaaS company or have prominent companies/organizations as your clients, then you can display their logos on your website.
Incorporating social proof into your website can help you build trust and credibility for your SaaS business, which can help you in convincing leads to convert, as well as maximize retention.
In this post, we have covered essential strategies to optimize your SaaS website for conversion and retention, from creating a compelling UVP to optimizing your website for conversion to incorporating social proof.
By following these strategies, you’ll have a stronger foundation for success to attract more leads, convert more into customers, and retain more clients for your SaaS product.
If you have any feedback or questions, please feel free to leave a comment below or contact us directly. We would love to hear from you and help you grow your SaaS business.