You may know about different marketing tactics and realize that some are worthful by selling physical products. But do you know about SaaS marketing? Do you know how it changes the B2B model of businesses? Many businesses or individuals depend on SaaS products to reach their business goals.
Today, I want to share the SaaS marketing style and why it has grown gradually in recent years. I will highlight the advantages.
And how to market SaaS products to your prospects and what metrics you should be aware of. Before going forward, you should know what SaaS marketing is and why it is growing.
What is SaaS marketing?
SaaS marketing is a marketing approach in which the marketers focus on promotion and collecting leads for subscription or recurring-based products. It builds a long-term relationship with the client.
SaaS stands for Software as a Service, and mainly products related to cloud-based Software or tools are included in SaaS. These types of Software help other businesses or companies.
For example, an IT firm or individuals who require Software to perform their operations.
One of the examples of products offered by SaaS to any blogger or website owner is SEO. Other examples like Keyword tools, landing page builders, and others.
These tools can help any business or individual website in the long term. It can help them to beat the competition. That is why they are always in demand. And people pay a monthly or annual subscription to use these tools.
Physical products receive one-time purchases, while SaaS products are based on a monthly or annual fee. The main goal of a marketer in this field is to provide satisfaction through their products.
It will build trust, and their prospects will use the product for a lifetime.
Why is SaaS different from marketing?
If you notice SaaS products, you will find that it is a B2B model and relies upon other businesses. SaaS products receive regular updates and extra functionality.
It improves customer experience, so they do not move to other products. The updates provide them with a more reliable and user-friendly experience and increase trust in security.
Marketers promoting their products and grabbing leads do not want to lose customers. If their prospects find an alternative solution, it can affect their business.
So, apart from the traditional marketing style, the goal of this business is not to lose leads or existing customers.
Marketers promote cloud-based Software, enterprise solutions, tools, and applications in these marketing tactics. It can help other businesses like IT or consulting firms.
Marketers build long-term relationships with their clients and suggest other products and offers.
How do SaaS companies do marketing?
There are many ways to promote SaaS products, but the motto of this marketing should be acquiring leads. This technique can convert as future clients pay for a subscription.
Before launching any product, you should know about the target audience. Also, what solution can you provide to them so they can trust your service and consider it in the future?
Follow the following marketing strategies to grab more trustworthy prospects for your SaaS products:
1. SaaS email marketing
Email marketing is one of the practical and high-converting marketing techniques. It is quite popular with online marketers. If you have a list of prospects, you can send emails promoting the new and updated products.
You can send personalized emails to unique opportunities for interaction and resolve their questions for better understanding.
Try sending reminders and a cycle of emails to grab more open rates and attention from your clients. Explain the usage, testimonials, and whitepaper of your product.
It will help your customer know what it is and how it can help their business.
2. Try offering a free trial
Always try to give customers a trial period and check whether the product suits their business. If they find it useful, they will convert to a subscription-based customer and can use your products long-term.
The goal of the trial period is to know whether your product meets the customer’s requirements. Also, you will get to see if it is worth the money.
3. Take help from the third person
You can take the help of influencers or the 3rd party resources that can influence people to purchase your product. YouTube is one of the best places for sponsored products.
Here well-known YouTubers having large subscribers can promote your products for some money. Influencer marketing is growing day by day because people trust famous personalities.
Instagram also can help in influencer marketing, where 3rd party person introduces your target audience and give them an idea using your brand.
4. Incorporate content marketing
Content marketing can help in getting more targeted customers to your business. It is helpful in SEO and for any business website or landing page. If people come to your products through searches, the chances of conversion increase.
Get the idea of your peers and know the trending keywords to rank higher on search engines. Customers will automatically visit your website and purchase products when you build a brand reputation through content.
5. Know your customer’s feedback
When a customer buys a product from your business, please don’t ignore them afterward. Instead, get feedback from them about their user experience. Know what technical issues they are facing and what updates they need.
You should know what customer loves and hates about your product. And you can update your products for better performance. Provide the support and knowledge base of your product.
What are the metrics related to SaaS marketing?
While marketing SaaS products, you should know some metrics to measure customer success. It can help you to manage your budget and track your revenue for your business.
1. Customer Lifetime Value (CLV)
This metric estimates the amount of money a customer spends in your business during their lifetime. It is a vital factor to know. Because it can help you to decide how much you should spend on acquiring customers to be profitable.
To calculate CLV, you should know about some other measures like:
- Average purchase value: It can be calculated by dividing a company’s total revenue in a period like one year by the number of purchases from the same period.
- Average purchase frequency rate: Calculate it by dividing the number of sales by the number of unique prospects in that period.
- Customer value: To calculate this, multiply the average purchase value by the average purchase frequency rate.
- Average customer lifespan: Calculate it by averaging the years a customer continues to buy from your business.
Finally, to calculate Customer Lifetime Value, multiply customer value by the average customer lifespan.
2. Customer churn
Customer churn or attribution is the rate at which customers stop taking your products or services. In the SaaS industry, retaining a customer is less expensive than acquiring a new one.
So it is an important key term for SaaS marketing. So, identify and nurture the most valuable customer to save money and increase revenue with an increase in CLV.
According to Harvard Business Review, it is found that acquiring a customer can cost between 5 to 25 times more than retaining the existing one. Also, a 5% increase in retention rate can boost the profit between 25% to 95%.
3. Customer Acquisition Cost (CAC)
The cost of acquiring a customer for your business is Customer Acquisition Cost. Suppose a company spent $10000 on marketing in one year and received ten customers. Then the CAC is $1000. The less CAC, the better profit any business can make.
4. CAC-to-CLV ratio
This is the ratio of Customer Acquisition Cost to Customer Lifetime Value. For any SaaS business, this number should be small to generate more profit.
Provide information to your customers to establish a strong relationship
The whole SaaS marketing depends on communication. The information or data you can provide to new and existing customers. No matter how strong your product is, you cannot acquire customers if you do not provide information.
A blog is one of the best ways to provide information about your product. You can link along with a Call-to-Action button so that anyone who wants to try out your product can read the detailed information about the product.
It will boost the conversion rate and clear customers’ doubts.
And anyone can know more about the product before deciding to try or buy it.
SaaS products are beneficial for small or big businesses and enterprise solutions. The marketing tactics for SaaS businesses are different from other business models.
Because here, you need to care about customer lifetime value. Marketers provide them with subscription-based products to run a long-term business.
Also, they have to update the products and offer their existing customers. If you can learn about their needs and how to build a brand, you can succeed in the SaaS business.