Why You Need SAAS Digital Marketing Plan: The Top 3 Reasons
1. Convincing Your Customers About Your Product ValueLet’s assume that your product is indeed the holy grail, you still can’t sell it unless you convince your customers. Even the greatest products in history like the original Microsoft Windows, the Mac, and the iPhone were marketed extensively to convince buyers. You will need to convince your customers that your product is worth the money. On the other hand, if you are selling an affordable product, you will need to convince customers that your product is not cheap in quality. Marketing is about convincing people, period.
2. Getting rate.By 2020, the market size is expected to reach $270 billion.While it is a good news that you will have so many potential customers to sell to, it also translates to a tighter, harsher competition. Your customers are faced with a much wider choice of many different products than ever before, and you will need a proper marketing strategy to get ahead of the pack.
3. Acquiring New Clients AND Increase RetentionNotice how we emphasize the AND here, because one of the most common mistakes of many SAAS marketers is putting too much focus on one side and neglecting the other. Both customer acquisition and customer retention are equally important for growth (link to SAAS growth strategy article), and having a proper digital marketing strategy can help you put a balanced focus to both aspects.
SAAS Digital Marketing Strategies: Your Ultimate ChecklistNow that we’ve understood the importance of having a proper SAAS digital marketing strategy, how can we begin to formulate one? Below, we will discuss several key factors you should focus on when planning your digital marketing strategies for SAAS companies. Let us begin with the first one.
1. Knowing Your Target AudienceThis one might seem obvious, after all, isn’t your product already designed for a specific audience? Yet, there is a lot more to actually knowing your target audience, and if you truly understand them, your marketing strategies will be much more effective. One of the most common (and effective) ways to truly understood your target audience is by creating a buyer persona. Buyer persona is a research-based portrait of your ideal customer. What problems they have (and how to answer them), what goals do they have in mind, how they make their decisions, and most importantly, how to influence their behavior. How to do it? If you already have a customer base, your can analyze the data to develop your buyer persona. If not, you will need to do a competitive analysis (link) and figure out your competitor’s target. As a side note, even if you do have your own customer data, analyzing your competitors’ is still a good idea. Now, there are obviously a lot of data attached to your customers. To make things easier, you can divide the data into two big groups:
- Demographic factors
- Marital Status
- Psychographic Data
- Lifestyle factors In
2. Build Your Inbound InfrastructureSAAS marketing is now all about inbound marketing, what is it? The idea is, instead of pushing ads and campaigns to disrupt your customer’s buying journey, we provide them with valuable contents to attract them to our site (and hence, our product). So, a huge part of your SAAS digital marketing strategy should be about content marketing. There are several benefits of applying inbound marketing to your SAAS business:
- Most of SAAS customers are not searching for a specific software, but a solution for an issue related to their industry. By providing them with valuable contents and solutions, you make yourself discoverable
- If you can provide a valuable, informative content, it will establish your credibility in the eyes of the customer.
- Inbound marketing (and content marketing in general), is far more affordable than traditional marketing where you must spend money for advertising and campaigns.
3. Choosing The Right Marketing ChannelsWith so many different marketing channels available, it can be very difficult to choose the most effective ones for your business. On the other hand, most of us simply don’t have the unlimited budget to utilize all the available marketing channels, creating the dilemma. So, what should we consider when choosing our marketing channels? Here are several key factors you should focus on:
- Cost: compare costs of different channels
- Scale: how large is the said channel, and how scalable?
- Flexibility: how much control do you have over the said channel?
- Targeting: how specific can you target your audiences with the said channel?
- Impact: how much ROI do you expect?
- Time: how long do you need to set up a marketing effort through this channel, and how long you should wait for results?
- Interview/survey your existing customer base, especially the specific sites they visit and the social media channels they use
- Based on that data, launch several campaigns (maximum 5), and wait for results
- Measure your conversion rate
- If your conversion rate is low, there are two possibilities: your buyer persona might be improper, or you are not providing enough solutions for their problems
4. Measure The Right MetricsAfter you’ve specified the marketing channels you are going to work with, it is also important to define the right Key Performance Indicators (KPIs) for each channel. By measuring the right metrics, you can figure out whether your strategies hit the spot, or whether you will need to make the necessary adjustments. Our previous guide on important metrics for digital marketing might help you (link). Yet, here is a quick recap on the important metrics of SAAS marketing you should measure:
- Churn Rate
- CPL and CPA
- Monthly Recurring Revenue (MRR)
- Lifetime Value
5. Plan Your BudgetUltimately, a marketing strategy is about how to optimize your budget. The better you can manage your budget and the better your ROIs are, the better your marketing is. So, how can we determine the ‘proper’ digital marketing budget for SAAS? There are two key metrics you can use as indicators: first is your Customer Acquisition Cost (CAC), which is the amount of money you spent to acquire a customer, depending on your business model, your CAC might differ with your CPA (Cost Per Acquisition). The second is Lifetime Value (LTV), we have discussed both in the previous step Ideally, your LTV should be more than 3 times higher than your CAC. Or, your CAC should be recoverable in less than 12 months. Confusing? Let’s use a quick example. Let’s say you are going to invest on content marketing to get a new customer. There are 3 things you should consider:
- Your Target CAC
- Lead Generation Rate
- Conversion Rate