Strategies for Optimising Your SaaS Marketing Funnel
Strategies for Optimising Your SaaS Marketing Funnel
How often do you hear the SaaS marketing funnel is all about rapidly growing subscriptions and reducing churn? These metrics are undoubtedly important to the success of your business. This one size fits all approach to the recurring subscription business model is problematic. It ignores the nature of your product and the maturity of your organisation and market.
Measure what matters for your SaaS Company:
Growth optimisation involves solving three basic problems. Firstly, measure what matters to your business so that you fully understand what’s critical to your revenue growth. This requires that you establish processes to obtain actionable insights from data to clearly identify what to prioritise to have maximum impact on your performance.
An important strategy here is to use your web analytics to begin tracking specific user behaviour on your website or app. This means setting up individual events in your web analytics.
- Downloading a white paper
- Viewing a how to video
- Requesting a demo, when prospects become paid customers on-boarding tasks and integrations completed.
Once you have these events set up in your analytics. Use the data to identify the behaviours that are the best predictor of a visitor converting at each stage of the funnel. These insights will allow you to build intelligence into your marketing tools and implement behaviour triggered nurturing. Your follow-up activity will be specific to the action a visitor took.
Optimise your message:
The next challenge is to clearly communicate how your SaaS product helps customers to meet their objectives and to differentiate your software from competitors. This involves having mechanisms in place to listen to and interact with your customers to verify that your message is distinctive and persuasive.
By solving the first two problems you can better inform and build a team of professional to focus on the biggest opportunities. Insights from data and Voice of Customer feedback inform your efforts to unlock revenue potential across your funnel. This begins with building awareness to drive traffic to your site and taking prospects through to subscription and onto renewals and referrals.
The SaaS marketing funnel from Market8 is a useful guide to decision making to focus on growth and revenues at each stage of the user journey. The biggest challenge we find such companies face is how to convert prospects at each stage of the SaaS marketing funnel. Below we outline some key strategies we use to convert prospects as they progress through the SaaS marketing funnel.
1. Awareness to Consideration:
When thinking about the awareness stage we need to consider that not all prospects will completely understand the problem that your product solves. S will be more sophisticated than others in respect of using technology. Indeed, the most important input into your growth strategy is data and insights about your prospects.
That’s why our first strategy involves segmenting prospects into different groups. This allows us to personalise the user experience and so improve the relevancy of content which should increase conversions.
We can segment users by factors such as how tech savvy they are or the level of understanding of the problem we are trying to resolve. It’s possible to identify how knowledgeable a prospect is by tracking the content they read or download. Using events in our web analytics to create custom segments for automated re-marketing.
Web analytics and other forms of insight will improve your knowledge of prospects. It can allow us to build several buyer personas to further enhance our marketing. Buyer personas should be based around their needs, pain points and how prospects use your product to solve these issues. As well as their desired outcomes from using your SaaS product.
You can now use buyer personas to improve awareness of their need or the problem which your SaaS product seeks to resolve. Personas allow you achieve this by better targeting of content that matches their specific needs and where they are in the SaaS marketing funnel. The critical factor here is that you serve prospects high quality content that accurately answers their questions and pushes them down the funnel towards product consideration.
Automation for scale:
Engaging with prospects to take them through to the consideration stage can often be achieved through automated tools. Such as Hubspot, Google Analytics and chat bots. These solutions have the ability to scale up. They minimize costly manual intervention and enable better targeting, more conversions and can reduce the length of the sales cycle.
2. Consideration to Qualification:
Many visitors to your site will never purchase from you because they are not in the market for your product or don’t see a need for it. As a result it is essential to set up your analytics and marketing tools. Identify behaviours that indicate a visitor meets suitable criteria to be categorised as a qualified lead.
- Pages viewed
- Completing certain tasks such as downloading whitepapers, viewing product demos or completing sign-up forms.
- Viewing specific pages such as product and pricing pages, About Us, team pages, free trial subscription or demo pages.
- Recent and frequency of visits to certain pages.
- Email opening and click through to relevant product or pricing content.
- Returning to specific content more than 3 or 4 times within a short period of time.
For a visitor to become a qualified lead they may need to complete more than one of these behaviours. It is necessary to monitor users over time and develop a lead scoring system to allocate a numerical value to each prospect.
Tools like HubSport CRM are made for this purpose as they can track and record user behaviour in the prospect’s profile. This is also more efficient than trying to rely on manual methods. Such as spreadsheets or databases which become too slow and time consuming when a business grows rapidly.
To move users from consideration to become qualified leads it is essential that you map out the user experience to encourage engagement and optimize specific pages. These include pricing, product, about us, team pages, sign up forms and demo pages. If you have sufficient traffic you can use A/B testing to identify which changes influence engagement and conversions.
3. Qualification to Evaluation:
SaaS product prospects are the same as any other buyers, they don’t want to regret a decision they make. That’s why B2B buyers want reassurance that any purchase will reflect well on them and that the supplier can be trusted to deliver what they promised. Moving prospects towards evaluating your product requires building trust and credibility in your website.
First impressions count and so your website needs to look professionally designed and easy to use. A DIY website can undermine your credibility as prospects may question how professional your organisation is likely to be. Invest in high quality content and aim to become a thought leader in your field so that your site becomes a destination for expert B2B information.
Social proof is a powerful way of establishing trust and credibility with prospects visiting your SaaS website. Showcasing testimonials from satisfied clients is a great way to support claims you make on your site. Try to select testimonials which reflect your ideal buyers. If possible use video testimonials a these are seen as more genuine and difficult to invent.
Many SaaS companies offer free trials or proof of concepts to allow B2B prospects the opportunity to fully evaluate their product before having to commit to a subscription. This reduces the risk from the client’s point of view. No one wants to spend money on software that fails to deliver what was promised or find that the customer service and support sucks.
Depending upon how complex your SaaS product is it may be necessary for sales consultants to intervene during this stage of the funnel. They can ensure more valuable prospects get the attention they deserve. Make sure you fully understand what the customer is interested in and their ability to buy. Technology can still be used to support this process and chat bots can for example be programmed to respond to frequently asked questions.
4. Evaluation to Purchase:
Moving prospects from evaluation to purchase requires that you fully understand their motivations and needs as otherwise a traditional hard-sell approach can be very off-putting. This means observing behaviour online (e.g. using web analytics and user experience tools), asking questions about what this tells us about prospects needs and follow-up activity to identify their level of interest and ability to purchase.
This approach allows your company to build rapport and awareness of your pricing and promotions. This is why listening to the Voice of Customer through user research, social-media monitoring, usability testing, analysis of complaints etc. allows you to understand how your customers and prospects perceive your SaaS product and support services. With better knowledge of how your SaaS company is perceived you can have a planned approach to sales conversion.
How you structure your SaaS product can also influence the effectiveness of your approach. A modular approach to your SaaS product makes it a lot easier to limit access to premium features for customers who are on free trials. This means you can use scarcity and curiosity to encourage users to subscribe to additional services.
For complex SaaS products there is no substitute for highly trained and skilled sales consultants who can fully understand prospect’s needs and the pain points they want to resolve. You can also improve the chance that your offers are relevant to prospects by identifying the specific needs of existing customers.
Research amongst B2B buyers by Hawkeye discovered that two thirds (77%) in the evaluation stage found testimonials and case studies to be the most influential types of content. The important thing here is that your content offers value and assists prospects in finding a solution that meets their needs. Speak with your sales team to check that this is the case.
5. Purchase to Activation:
Key Activation Events:
Key activation events are those specific behaviours that indicate if your new customer is going to become a long-term subscriber and successful user of your SaaS product. Whether it is that they set up a personalised dashboard or write two blogs in the first month. There are certain behaviours that give us a strong indication that users will become loyal and profitable customers.
Using the web analytics event tracking we discussed at the beginning of this article we can analyse the behaviour of your ideal customers to identify these key activation events. With this knowledge you can then design your on-boarding user journey around these key activation events. In addition you should target your marketing activity towards these behaviours to improve your activation rates.
Customers purchase your SaaS product for a purpose, to solve a problem or create more value for their organisation. We use an approach called value nurturing to reinforce the customer’s belief that they have made an awesome choice. This seeks to enhance the perceived value of the product over time. Value nurturing achieves this by using five important strategies that every SaaS company can benefit from.
Help customers quickly get to the “ah-ha” moment where they find success with your product. The on-boarding journey needs to assist this process by helping customers realise the value they were expecting when they signed up. It’s important to deliver your brand promise.
Remind customers of the value they are realising from their subscription through personalised communications. This may be to congratulate them on successfully completing a project or tips to help them utilise important features which are relevant to their organisation. Reinforce the value customers are obtaining from your product.
Create value from outside the solution through proving high quality content, community and data. Once customers are signed up don’t forget to cater for their content needs, facilitate user networking and discussions. Consider how they can benefit from the data you naturally collect.
Build long-term relationships with your customers so that they enjoy doing business with you. Nurture relationships with customers so that they feel valued.
Finally, align your business with customer values. Purpose-driven marketing strategies have been shown to have a strong impact on company growth.
6. Activation to Expansion:
The first three months of activation are especially critical. Unless customers begin to regularly use your SaaS product. They are unlikely to recognise the value it creates or form habits that establish your product as part of their regular routine. To facilitate the expansion stage of the SaaS funnel its essential that your product is integrated within their business and also integrated with other software solutions the organisation uses.
Moving users towards expansion where they are willing to subscribe to other features or upgrade to more premium products requires a planned approach to customer success management. Creating a customer launch plan can help guide customers to ongoing success before they lose interest and forget why they subscribed to your SaaS product.
Listening to customer feedback and responding accordingly is also valuable when designing your plan. Have you ever wondered why Apple puts so much effort into the packaging design for its products? It does this because it helps to reinforce that you have purchased something special. It influences your perception of the brand going forward.
Designing a customer launch plan can help you focus on these small details which can have such a big impact on how customers perceive your product.
It should also assist customers in realising value from your solution to feed positive confirmation bias. Reduce barriers to success by creating emails with links to videos and other useful resources so that customers don’t feel abandoned once they have signed up.
Chatbots and other forms of AI can automatically respond to help guide customers towards creating value with your solution.
Satisfied customers who perceive they are creating value with your solution are certainly more likely to become advocates for your product.
As well as influencing other users in a positive way towards your solution. Advocates are also the type of customers who will be responsive to upgrades and other offers to expand their ownership of your product. That’s why guiding users to success is so important to the expansion phase of the SaaS funnel.
7. Expansion to Renewal:
Moving users from expansion to renewal requires a continuation of customer success planning to ensure they don’t lose their way and fail to create value through new features and upgrades.
To guide customers to renewal it is important to utilise formalised customer feedback mechanisms to enable you to measure customer satisfaction levels and identify pain points that need to be resolved. Understanding what customers like and dislike about new features or upgrades, together with behavioural data from analytics, enable businesses to be responsive to concerns and frustrations that if ignored can destroy a relationship.
Many successful businesses have taken this a step further and invite valuable customers to join advisory panels. This allows the company to obtain in-depth feedback on a regular basis on upcoming releases, new features and new products. This generates useful insights but it also strengthens your relationship with important customers.
It’s often easy for competitors to copy your product. Add value through establishing a business community that is much more difficult to replicate. You may be able to connect customers through your platform. If that is not suitable you can use social events and social media to build a network of users.
Conversion World is an online conference for digital marketers, created by a community on Slack. This allows potential customers to collaborate, ask questions, share news and arrange meetings throughout the year.
Create an exit plan to reassure customers that they can leave if they really want to. We’ve all heard horror stories of how companies can make customers jump through hoops and make cancelling a subscription as difficult as possible. The danger with this approach is that it can actually act as a barrier to renewal. Customers seek to avoid the relationship becoming ugly.
By having a clear and relatively easy exit plan make this a selling point of renewal. Rather than frightening users with complicated and unpleasant procedures. It also means that when customers do churn they are less likely to be unhappy with the process. Share their dissatisfaction with other business people.
8. Renewal to Referral:
When a customer renews they are making a commitment to your product and may have had to submit a business case to get a budget approved. Don’t let this moment pass without thanking them and reassuring them about the continued value of their subscription. This is a great opportunity to offer additional support and evidence of the value created by your solution.
Loyal customers can of course generate new leads by recommending your product to other businesses through networking opportunities and comments on social media. However, your first priority should be to recognise and reward such customers to make them feel valued and supported.
Indeed, focusing on getting testimonials and social media shares from such customers can annoy them and reduce their willingness to be an advocate for your business. A better strategy is to identify loyal customers and potential advocates. When they do or say something positive about your SaaS product reward their behaviour through recognition, exclusive access, loyalty programs or just by saying thank you.
SaaS marketing is a zero-sum game. You either keep your customers satisfied or you will lose them to a competitor. One of the best ways you can retain customers and turn them into advocates is to increase the value of your solution by upgrading your product.
Release New Versions
Try releasing new versions of your solution to existing customers with new features and services. Inform them they can automatically utilise these benefits without any rise in their fees. Such an improvement is often reciprocated by customers with positive reviews and referrals.
It is also important to offer support and help to advocates to make it easy for them to operate on your behalf. Create functionality to allow users to share their successes or simply write a review. This can be as simple as providing social share buttons at key touch points or offering them a discounted subscription for providing a certain number of referrals.
Loyalty programs are a common way to cement a relationship with existing customers and generate referrals. Companies like Dropbox have been amazingly successful with using strategies, such as refer a friend to grow their business from existing users. It doesn’t have to be complex or costly. It just needs to reward customers with ‘member only’ benefits, discounts or bonuses that user’s value.
The latter is the most important characteristic. Customers have to value the rewards otherwise they won’t be motivated by them.
Loyalty programs are a common way to cement a relationship with existing customers and generate referrals. Companies like Dropbox have been amazingly successful with using strategies such as refer a friend to grow their business from existing users.
There are two kinds of referrals programs
- One-way referral schemes are where customers are asked to refer the SaaS product to other businesses in exchange for some kind of benefit or discount. For example Yesware, a sales productivity solution. Has successfully used an auto-complete message to generate huge numbers of referrals.
The scheme allows users to earn points for each referral. Once they have earned sufficient points they can exchange them for either a t-shirt or an Amazon gift card.
2. Two-way referral programs are more popular because they provide benefits for both the referrer and the referee. For example Evernote, the cloud-based app for taking notes, allows users to earn points for each referral and exchanges these for upgrading to Premium. Referees benefit from a free month of using Evernote Premium and encourage them to also refer the app to friends.
Beyond this you can use gamification to make referral programs more fun and competitive. Hotjar, a user experience solution. They run a monthly league table which shows the top accounts generating referrals. Each month the top referrer gets a free lifetime business account. For 5 referrals they receive a free Hotjar branded hoodie.
By fully understanding the nature of the SaaS marketing funnel we are in a better position to identify strategies for improving conversion. This begins with measuring drop-off rates at each stage of the funnel. We can then optimise our messages and focus resources on areas that matter. By analysing performance for each step of the funnel we can determine the most effective ways to grow your business.
Are you are an early stage-start up that needs to drive more traffic to your site through segmentation and targeting different personas?
Do you need to examine how you qualify visitors on your site by delivering more relevant content to improve engagement?
How do you build trust and credibility to encourage users to evaluate your SaaS solution?
How well do you really understand your customers’ motivations and needs to persuade visitors to buy?
What are the key activation events that increase the chance of a customer being successful?
Are you paying enough attention to the small details that can reassure and delight customers?
Have you established suitable mechanisms? Obtain insights from users and respond to their views on your product and services?
Do you have the ability to identify, recognise and reward loyal users to generate referrals?
By answering these questions you will be in a better position to grow your SaaS business in an efficient and sustainable way.