The pace of SaaS development continues to increase. With the growing number of new choices appearing on the market, customers switch key providers seemingly every couple of years.
For a SaaS that looks to the medium-term, not just with a two-year horizon, effective marketing is necessary to find new customers to handle the industry’s customer churn rate. Therefore, SaaS owners need to use effective marketing to both locate and appeal to potential new customers as a priority.
Here are some suggestions on how to do just that.
Marketing is an Important Part of the Business Model
While there are different methods for making money with a SaaS, successful customer acquisitions must outpace the industry churn to achieve strong growth. Otherwise, there’s a real risk of seeing an initial growth spurt, then it disappears and it’s all downhill from there. No SaaS can survive that flight path.
Failing to have a focused plan on the marketing side will lead to a startup that had some good ideas, a promising SaaS product, and then it slowly fizzled out. People then talk about a “lost opportunity” and it’s usually because the marketing wasn’t on point. So, orient the business sufficiently to ensure marketing is considered as much of a priority as product development.
Why Do Customers Stick Beyond the Two-year Stage?
As the Pareto Principle suggests, the highest profits typically come from 20% of the customers, not the other 80%. That’s certainly true with new customers that leave before sufficient revenues are received to cover their cost of acquisition.
The most profitable customers are likely to be the ones that stay the longest. So, carrying out a study of those long-staying customers to better appreciate why they maintain their subscription provides extremely valuable information.
Use the information gathered to steer products developed in the SaaS toward what appeals most to that group. Also, confirm how they were acquired as customers because there may be some common sources to further explore.
Differentiate Your Marketing Message from the Pack
While the SaaS may offer similar product features to several competitors, it’s critical to appeal to potential customers. This can be achieved by heavily differentiating your product from other options.
Go beyond the traditional marketing message by supporting customers with webinars, reports, and articles. These should be intended to help them use the SaaS to help to grow their business. Avoid being seen as “just another SaaS that does X, Y and Z.” Make the SaaS an essential part of other businesses’ operation.
Don’t Ignore Email
Email marketing remains an effective method to keep people interested, provide value, and sell products down the line.
Particularly for a SaaS with a high sticker price or requiring a yearly commitment but aimed at SMEs or microbusinesses, it will require multiple “touches” through email to convince someone to become a buyer.
However, deciding to opt-in to a newsletter once they’re on the site is an easier “sell.” From there, the magic can happen when providing useful content with the occasional marketing push including discounted sign-up opportunities.
Feature on Business Podcasts
Getting the word out by having staff guests on podcasts is an excellent way to spread the word, especially for new startups.
When trying already to stretch a minimal marketing budget in the early days before accepting a round of VC funding or because you’re determined to retain full ownership, podcasts are an excellent (free) promotional tool. Listeners can be given a special URL to receive a promotional offer just for them, so they feel valued.
Intelligent marketing approaches need to be adopted for a SaaS to both grow and handle the churn rate. Reducing the churn is possible when aiming for the types of customers who tend to stay for longer, thereby increasing the average lifetime value of the customers. It also prevents the marketing team from feeling like a hamster always on the promotional treadmill too.
