The first rule of business is to always stay in business. Do you know what this means for a SaaS company?
Sounds pretty straightforward, right?
It sure does.
But the truth is that identifying opportunities for customer acquisition and growth can be an uphill task in the already jam-packed SaaS space. You see, SaaS customer acquisition is a delicate balancing act.
It takes a lot of effort to convince a prospect to sign up for a free SaaS product without building a stable relationship. Without a solid relationship, the sales cycle could take longer than expected!
Ideally, a prospect would want to know more about your solution and how it can help solve their pain points.
Is SaaS Customer Acquisition Difficult?
Yes, unfortunately. Why?
Because the SaaS sales cycle is relatively long compared to most businesses.
According to HubSpot, it takes an average of 180 days for a SaaS startup to close its first sale. Indeed, that’s a long time trying to pursue a potential customer to buy your product.
The question then becomes – why would a prospect take such an extended period before deciding to purchase your SaaS solution?
Here’s why:
High Cost
Let’s be honest…
Most SaaS tools aren’t cheap. Sure, some are affordable, but even these come with recurring subscription fees. In short, most SaaS solutions aren’t a one-off kind of purchase. It is this pricing model that makes them expensive for some customers in the long run.
Privacy Fears
SaaS tools are cloud-based. A potential customer can be skeptical about permitting an unknown product to process their data on external servers.
The recent introduction of GDPR makes this a significant concern for businesses processing data in the European Union. Such businesses must make sure that their third-party providers comply with the GDPR rules and regulations.
Complexity
Some potential customers might find your SaaS product too complex to understand or operate.
Others may not know to what extent your solution can solve their problems. These prospects can be reluctant about spending their money.
A Variety Of Options
Picture this…
You design an innovative SaaS tool. Your target customers love it. In a period of time, there’s another similar product on the market. Your customers and the prospect now have an option.
The ripple effect is that you’ll have to find ways to deal with your competition to keep your customers and, most importantly, acquire new ones.
It is essential that you educate your prospects as much as possible about your SaaS solution, how it works, and precisely what makes it different. The idea is to build brand loyalists who will keep coming back and advocating your business to others.
How do you do this? You must understand your ideal customer value journey.
That leads us to the next point…
How To Take Potential SaaS Customers Through The Value Journey
For starters, your customers undergo four stages before deciding to buy your SaaS solution.
#1 Awareness
At this stage, as the name suggests, a customer becomes aware of your business.
He or she may get to know about your company through your websites, blog posts, social share, referrals, etc.
Here, the potential customer may not necessarily be looking for a solution. They may not even know they have a problem that your solution can solve. But the good news is that this is where the sales process must begin and now you have a prospective customer on your hands.
#2 Engage
At this point, the prospect is engaging with your content regularly and has become an active user.
They are reading your blog posts, subscribed to your newsletter, and downloaded your in-depth guide.
Simply put, the potential customer is aware of the problem you’re trying to solve with your SaaS product. Most notably, they start to ponder about your solution and how it can help them.
#3 Explore
The customer is aware of their problem at this stage. They are searching for a solution and are weighing a couple of options. The prospect checks your prices, communicates with your sales team, and requests a quote.
They will sign up for a free trial or account to take your product for a test drive but won’t sign up for an annual subscription at this point unless your sales team has left a remarkable impression.
#4 Convert
Now, the prospect has gone through the various product packages and is ready to make a purchase. They chose one that’s right for their budget and the prospective customer has converted it into a paying customer.
The remaining hurdle at this stage is to ensure that your customer continues to use your product for the long term by making sure you have incredible customer service. By creating a user-friendly product and great customer service you’ll ultimately reduce your customer’s conversion rates and drastically increase the customer lifetime with your company!
These stages are part of a larger SaaS customer acquisition/marketing funnel. At the top, you have potential customers who know about your brand through your marketing channels, such as your website, the media, industry events, etc.
At the bottom are prospects that end up converting into customers.
Of course, the funnel becomes narrower as a customer moves from one stage to the other. Your primary aim is to make sure that the funnel remains as wide as possible throughout the entire cycle.
We’ll talk about that, next. But congrats now you have recurring revenue!
How To Guide Your Prospects Through The SaaS Conversion Funnel
You must have a specific approach at every stage to ensure that a potential customer moves down the sales funnel.
Make sure the marketing strategy aligns with the potential customer!
Here’s a breakdown of key metrics of what you need to do aka a simple formula for success!
Awareness – Build Trust And Authority
At this stage, a customer is having the first contact with your brand. Therefore, your aim is to build trust and authority.
There are several strategies you can use to increase your brand’s awareness including;
Place your company in front of your target customers through events and PR initiatives.
Increase your website’s traffic through SEO.
Encourage current customers to become advocates of your brand. People love feedback from happy customers!
Promote your content on social media or through paid advertisements
Engage – Educate Your Leads
As stated, potential customers are engaging with your content at this stage.
That allows you to educate your prospects. You want them to see you as a resource they count on for reliable information so make sure your response time is impeccable!
To achieve this, you must collect their contact information. Here’s how to do it;
Optimize your call to actions
Create gated content such as downloadable resources or newsletter contact exchange
Be sure to balance signups without interfering with the user experience. For example, you can test various opt-ins such as slide-ins or pop-ups, to determine what works for your business model.
You’ve got your potential customer’s contact information, what do you do with it?
Well, it’s time to start a vigorous lead nurturing campaign with more direct communication. And, as a rule of thumb, comply with the GDPR subscription rules.
At this SaaS customer acquisition stage, you want your prospects to consume more of your content.
That way, you can encourage your audience to get interested in your solution. Still, it would be best if you move your leads from engaging with your content to exploration.
Think of it as a strategy to motivate your prospects to find more about your brand what it has to offer.
How To Move Potential Customers From Engagement To Exploration
Sure, it helps if prospects engage with your content, but you want to explore your product options. Keep in mind that a potential customer isn’t sure if they can trust your SaaS tool during the engagement phase.
Plus, you have to show the prospect that they have a problem your SaaS solution is trying to solve. To move the customer to the next phase, you have to monitor the level of engagement. That way, you can customize your content that engages the prospect based on his/her actions, such as clicks, downloads, etc.
For instance, you can create step-by-step tutorials explaining your product’s specific features and how customers can use them to solve their day-to-day business needs.
On top of that, send follow-up messages while directing your audience to pricing pages. Also, promote free trials if you have them to encourage potential customers to try out your product.
We recommend that you add CTAs in your follow-up emails and content to increase your chances of moving the customer to the next stage of the sales funnel.
Explore – Convince Your Leads
The prospect is now exploring your content and product prices. In essence, this means that they are one step to converting into a buying customer.
How do you make this happen? There are several strategies you can use to move the potential customer further down the sales funnel.
Offer A Free Trial
When you offer a free trial, you’re allowing a prospect full access to your SaaS product, albeit for a limited period.
The primary aim is to make sure that the lead has a taste of what your tool product can do for free, thereby increasing the odds of continuing to use your product after the trial.
Be sure to send promotional emails when the customer signs up and near the end of the trial period.
Your messages should focus on your product’s benefits and what a customer will miss if they don’t upgrade to the paid version.
Freemium Package
Freemium SaaS package offers an account that provides limited access to some of the premium features for a lifetime.
Again, you want the customer to feel what it is like to have a premium version of your product. Remind the prospect of the benefits of signing up for the full version with your onboarding communication.
Free Account
A free account offers targeted messages to prospects. More specifically, your communication involves sending your leads things such as recorded webinars, case studies, and anything else of value to keep the customer activity aligned to your service.
The trick is to ensure that your messages direct potential clients to your sales team for a call or demo.
Conversion – Keep The Customers Coming Back
At this point, you’ve convinced the customer to buy your SaaS solution. The last step is to make sure that the lead becomes a repeat client.
Most SaaS products operate on a subscription basis, making customer retention critical. In fact, your ability to retain customers will determine your revenue growth.
Here’s how to improve your customer retention rate:
Send exclusive newsletters with company news, product updates, and new industry article.
Allow premium users to beta test new features and solutions for free.
Promote beta features a cross or upsell.
Ask for feedback from uses through customer satisfaction surveys. Let them feel that they’re part of the process and contribute to your product’s improvement.
Growth Generators Can Help With SaaS Customer Acquisition
Growing your SaaS business from the ground up is a serious undertaking that requires a lot of commitment and effort.
At Growth Generators, we can make the journey a lot easier. We will create a customer acquisition strategy to help fuel your business growth. Our team of experts will help you define your target market with precision. Do you know what happens when you target the right buyers?
You start to see results a lot quicker. On top of that, we will create and promote engaging content to help move prospects down the sales funnel.
And when your leads convert into buying customers, we will formulate a winning customer retention strategy to grow your revenue.
Get in touch with us today. Let us handle your SaaS customer acquisition formula.
It’s easier with Growth Generators on your side.