How is customer acquisition for SaaS companies different?
According to a McKinsey report, a software company growing annually, even as high as 20%, is highly likely to go out of business in a few years. In other words, even a growth rate of 20% is not good enough to sustain a software business. That is how critical a strong customer acquisition strategy is for SaaS companies. In this blog, we will run through tried and tested customer acquisition strategies specifically for SaaS businesses.
The SaaS buyer journey
Before choosing the best customer acquisition strategy for your organization, it’s essential to understand the buyer journey.
All buyer journeys are relatively similar. They follow the route of: Awareness – Consideration – Decision. However, that is where the similarity ends. This broad level of categorization can be further broken down as:
Chalk out your buyers just from the first point of contact until conversion. This stage is essentially SaaS customer research. Map it to each of these stages mentioned above. Then decide on marketing strategies for each stage to move them to the next stage. The strategy and tactics employed in each of these steps will depend on your product and industry. The last step of delight is crucial for SaaS business. Keeping your customers delighted is what leads to retention.
Key elements of SaaS buyer journey
When you are drawing up your buyer journey, there are few critical elements to keep in mind.
- Clear lead categorization – Clear labeling of visitor, lead, qualified lead, opportunity, lost opportunity, etc. The next step will be a process to track when a buyer moves from one label to another.
- Track different paths – While buyer journeys are similar, not all will begin and end at the same point. For example, one buyer can enter the journey as a website visitor. Another could come in as a referral and might start further down the journey.
- Monitor event triggers – Triggers make you move a lead to the next step of the buyer journey. For example, it could be something as simple as downloading content from your blog.Monitoring triggers is crucial in not just choosing strategies but also splitting budgets.
- Backed up by data – When drawing the buyer journey, ensure every point is backed up with historical or industry data. This step ensures your buyer journey is a solid ground on which to build customer acquisition strategies.
- Easy to understand – SaaS buyer journeys are long, but this does not mean it has to be confusing. A buyer journey is a tool that multiple stakeholders, not just marketing, will use. It should be clear and straightforward enough for anyone to understand. The customer journey is just a sketch of how your customer moves to conversion. Detailed information can go into specific strategies, for example, in this case – a customer acquisition strategy.
- Cover both macro and micro conversions – Macro conversions usually involve multiple teams such as sales, marketing and development. In comparison, micro-conversions involve fewer people, for example, a specific account manager. It is essential to highlight the differentiation. This is especially important to ensure all teams are on board with your buyer journey map.
Examples of common customer acquisition strategies for SaaS
Once you have your buyer journey in place, the next step is to zero in a customer acquisition strategy. Here are a few examples of how successful global SaaS companies acquired their customers.
Strategy 1: Content marketing for SaaS companies
Content marketing has always worked well for B2B marketing in general. Offering valuable information while showcasing expertise builds trust. While this is the same for SaaS businesses, there is one crucial difference. As a SaaS company, you not only want to convince but also ensure customers stay on board. Hence you are marketing both your product and your service.
Convincing customers about your service is a bit more tricky than product information. Getting actual users to talk about your service is more effective. This is where you can leverage case studies, review websites, forums and influencers.
Example – HubSpot
If you have ever looked for any marketing information online, there is a good chance that you have visited the Hubspot website. From just three customers in 2006, they now have a traffic rank of number 5 for marketing tech globally. As of 2021, Hubspot has 100,000 customers and $1 billion in annual recurring revenue. Inbound marketing contributed to this phenomenon. Hubspot’s blog is hugely popular for its simple to understand yet effective tactics.
Key features of HubSpot’s blog
- Easy to navigate – Clean design with an intuitive interface
- Wide range of topics – The blog is consistently updated, offering relevant information. The articles range from basic to in-depth, offering something for everyone.
- Content stacking – The blog suggests further reading and relevant articles next to every post. Most of the more in-depth articles are gated, offering Hubspot a chance to collect leads.
- Free Templates – Hubspot offers a ton of free templates, thereby offering tangible value to anyone who visits the website.
Companies like HubSpot have gained from offering their knowledge for free. Several organizations still hesitate to do this. The biggest fear being while this tactic can bring many visitors, it has fewer conversions. However, while not every lead is a sale. They can still be an ambassador of the brand. By sharing and promoting your content, they help with spreading awareness among future customers.
How does Hubspot promote its service?
As discussed above, promoting your service is as important as promoting your SaaS product. Hubspot often partners with the community in different ways. One of these tactics is partnering with micro-influencers on Instagram. While working with these influencers, Hubspot encourages them to use the hashtag #hubspotpartner. Anyone who looks up this hashtag can find real-life examples of how marketers use the product.
Strategy 2: Referral marketing
Several reports by Gartner have highlighted the value of referral marketing for tech companies. SaaS investments are high consideration purchases, and peer influence is powerful.
Several SaaS organizations have invested in referral marketing, including Google and Dropbox. Zoho’s referral program took it one step and made it customized for SMBs. Zoho’s email solution targets SMBs and the referral program reflects this. It offered 20 email boxes for every sign-up. All successful referral programs have a few things in common
- Instant reward
- Transparency about what the referrer and referee receive
- Hassle-free steps with simple forms
Zoho’s email referral program was hugely successful, and today they have over 10 million business accounts. They continue to use referral programs for various solutions.
Strategy 3: Account-based marketing
While account-based marketing is by no means new, it has seen a revived interest. Account-based marketing requires close collaboration between marketing and sales. The rise in technology to enable this is one of the reasons for the revival of account-based marketing. This form of marketing is excellent for acquiring enterprise customers.
Enterprises often have multiple decision-makers, users, gatekeepers, and influencers. An account-based approach allows you to tailor your marketing for each of these groups.
SAP saw value in account-based marketing and set up an ABM program in 2014. Through this program, tailored marketing campaigns for specific accounts. SAP started a test case with five accounts and then ramped up. This process involved studying best practices and formally training both marketing and sales. SAP’s customization tactics were in-depth. This strategy included dedicated marketers, customized newsletters, specialized social media portals, and live events. The strategy worked for SAP, and they had new opportunities worth $27 million in the pipeline within two years.
Not all organizations can afford to invest the resources, and capital SAP did. However, this strategy can be modified to suit even smaller SaaS organizations.
Strategy 4: Multi-touch point campaigns
Customer acquisition for SaaS is a long process. Hence staying connected with prospective customers through multiple avenues is critical. This strategy ensures brand recall and can also leverage different communication mediums – images, video, audio, etc.
Canva has seen phenomenal growth in the last few years. Ever since it was founded in 2012, it has gathered 15 million users. This includes more than 3,00,00 paid users. Canva successfully used multiple touchpoints to reach customers. Here are the ways they achieved this:
- Highly optimised website – the website is designed to convert visitors to sign up. Simple navigation offers a one-click process to sign up. By offering visitors a chance to sign up with existing social media accounts, it removes long forms.
- Backlink pro – Canva has really aced the backlink game. So much so other brands have started following their strategy. Apart from having a solid backlink strategy on their website, they also have a backlink outreach program. Canva reaches out to individuals such as relevant bloggers and encourages them to backlink to the website. This has worked really well for Canva which currently has more than 4 million backlinks.
- Social media ads – Canva has tapped into almost all social media platforms with their eye-catching ads. Using videos and high-definition images, they “show” rather than tell customers what they offer.
- SEO – Canva’s blog is updated frequently and leverages on guest writers as well.Canva also leverages their blog to promote new products. For example, Canva was quick to identify the demand for Zoom backgrounds as the world began to work from home during the pandemic. They swiftly released a series of blog posts about working from home and plugged in their new products.
- Freemium model – As with all SaaS companies, Canva’s goal is to keep customers hooked for as long as possible. The free service, which comes with a wide range of features, is popular. At every stage, Canva highlights special features that come with the paid version.
Key tactics for Customer Acquisition for SaaS organizations
No matter what strategy you choose for your SaaS organization, there are a few key tactics to keep in mind.
- Get to the known voice of your customer – According to a Gartner report, organizations that invested in the voice of customer (VOC) programs spent less on customer retention. If you don’t understand your customers, acquiring them and retaining them will be hard. From knowing where your customers look for information to their expectations, VOCs can offer solid insights.
- One funnel does not fit all – Sales processes for SaaS are rarely linear. Moreover, they can vary drastically for different customer types. The optimum process is to create customized funnels for each SaaS customer segmentation.
- Choose the right tools – Use technology to sell technology. Pick the right tools to optimize and sustain your customer acquisition process. Right from refining target audience to running campaigns and tracking results, marketers have a range of tools. These tools are handy when you have multiple sales funnels running parallelly.
- Know your cost of acquisition – Calculating your cost of acquisition and keeping it optimum is critical. Figuring out a good cost of acquisition can be a complex process. There are multiple methods and benchmarks. A commonly used rule of thumb is to ensure the lifetime value of a customer is at least 3X of the cost of acquisition.
- Customer retention is critical – When we talk about customer acquisition for SaaS, it is customer acquisition and retention. While customer retention is a vast topic, one essential aspect is to track goals from a customer perspective. It is easy to get swayed by vanity metrics. However, a successful customer acquisition strategy should measure goals valued by the customer, not the organization.
Do you have any questions about customer acquisition for your business? Let us know in the comments below.
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