The SaaS Marketing Agency

How to avoid falling behind the curve in growing your SaaS

7 SMART IDEAS TO MARKET YOUR

SAAS BUSINESS IN 2018

7 Smart Ideas to Market your SaaS Business in 2018 | A Xander Marketing Guide 2

What’s shaping SaaS marketing at the moment? The SaaS market has seen explosive growth and continues to evolve at an astonishing pace. In 2013, one estimate put the number of US SaaS companies at around the 10,000 mark. Last year, a cybersecurity division of Cisco looked at the data of its 10 million users across 750 companies and identified 150,000+ unique apps, an increase of 2,600%.

With such a vast number of players vying for traction, commoditisation is often an inevitable consequence. In such a crowded marketplace it is harder to standout and under such conditions SaaS ventures that find themselves in a battle for survival may resort to winning deals on price. Commoditisation has a nasty habit of creating a ‘race to the bottom’.

Indeed, the most costly form of customer acquisition may be slashing prices to win business! And in the more conventional sense, cost per acquisition (CPA) is getting more expensive. It now costs more to acquire customers and a higher marketing budget is needed to deliver conversion rates you may previously achieved.

David Skok, leading SaaS entrepreneur turned venture capitalist, is a big believer in a 3:1 lifetime value (LTV) to customer acquisition cost (CAC) ratio. Typically, CAC would be recovered within 12 months. However, Skok has seen increasing costs mean 18 months is now more realistic.

This means that for some, there’s been something of a shift to focusing on reducing churn and increasing retention - keeping customers for longer and making the most of existing leads.

The entire issue of personal data held in the cloud and the way companies use it has been trending for some time. The issue recently became something close to toxic for Facebook.

But really, the whole issue of data revolves around the General Data Protection Regulation (GDPR). It’s a bomb and as companies adjust their data management practice in line with GDPR, how we go about marketing SaaS is going to take a hit.

When it comes to talk of investors and bubbles, analysis of 10 years of CrunchBase data by Point Nine Land suggested seed investment has tailed off a since 2015. However, for A – D Series funding it has increased, and the overall trend across Seed, A, B, C and D Series is upward.

Moreover, the average round size has gone up much more strongly for later stages than for earlier stages. This is interpreted as indicating late-stage financing in the market has grown much faster than the number of companies that make it to the Series D stage.

INTRODUCTION

7 Smart Ideas to Market your SaaS Business in 2018 | A Xander Marketing Guide 3

What does it all mean? With some educated guesswork we can take a stab at identifying three things suggested by these trends:

• The market is somewhat saturated and the race to the bottom may lead to more failures of SaaS ventures or increase consolidation and M&A activity

• It is going to take longer to generate growth and progress through the funding rounds unless marketing budgets increase or existing budget is used more effectively

• D Series funding may provide increased investment to take the business to the next level but it’s proving harder to get there

To help owners and key stakeholders in SaaS ventures to overcome these challenges, here are 7 ideas to help you market your SaaS business more effectively in 2018.

INTRODUCTION

7 Smart Ideas to Market your SaaS Business in 2018 | A Xander Marketing Guide 4

IDEA 1

PRODUCE HIGH QUALITY CONTENT

GDPR changes the rules about how you use personal contact information, including email addresses. To send marketing emails or information down any other channel to prospects or customers they must have been asked explicitly for and opted in. You can no longer just buy a list (or use a stolen one) and send an email blast. Consequently, the opted-in data that you already have, (you do have some, don’t you?) and any that you acquire post GDPR is very valuable. To make sure that you maximise its use and minimise the unsubscribe rate, any content you send needs to be high quality, useful information.

In tandem with GDPR, there has also been a shift in attitudes. Consumers and B2B buyers are fatigued. They have become bored by much of the mediocre marketing communication which is polluting their digital channels. And the less tolerant attitude of millennials means they are largely unimpressed, and it’s all leading marketing to stagnate.

To face the fact, people really have better things to do than read marketing materials. Your SaaS product is only going to get a look-in if there is an immediate business need. The lifecycle of a product they are using is likely to be years.

You need to nurture this data until they are ready to buy again. It is essential to build brand recognition, maintain awareness, promote trust and establish your credentials. High quality, useful content built on business issues rather than sales patter is called for. White papers and guides, case studies, podcasts and blogger communities are just some of the options.

To see a really great example of a company that has ridden a wave of high quality content to achieve outstanding growth, just take a look at Intercom.

7 Smart Ideas to Market your SaaS Business in 2018 | A Xander Marketing Guide 5

With your website being the key point of focus for your marketing effort, there simply isn’t room for complacency when it comes to messaging, design and functionality. If visitors can’t find out what they want, or understand what your SaaS product does and how it benefits users quickly, they will simply exit the site and find another one.

Consequently, Conversion Rate Optimisation (CRO) is an essential organising principle behind building and then tuning your website.

Get your messaging right and make sure you get the point across with plain and easy to understand language. Make sure you communicate the benefits and advantages clearly.

Good CRO techniques include split testing homepage variants, not just when you build the site, but at intervals to understand how well it performs on a continual basis.

Test any other pages, such as landing pages linked from marcomms to see how well they perform. Follow best practice for User Experience (UX) to make sure every call to action (CTA) is fine tuned for conversion.

Consider using buyer personas to create pages that speak directly to your target market, and which project empathy and position your SaaS product as the answer to their problems.

OPTIMISE YOUR WEBSITEID

EA 2

7 Smart Ideas to Market your SaaS Business in 2018 | A Xander Marketing Guide 6

Bad news! Once you’ve done the hard and expensive bit of acquiring a customer, it doesn’t get any easier. You’ve got to work just as hard at keeping them. This will cost money too, but the difference is the customer is paying you now!

Onboarding and retention is essential. Messaging through email and in-app help, FAQs, pop ups and meta labels are vital to helping newbies get up to speed and in keeping practiced users engaged and obtaining the full benefit of the software. Identify sign-ups that are inactive and be pro-active in getting them using the software.

A sophisticated tool like Intercom (oh, that again!) really makes a huge difference and it’s easy to see why it is such a successful SaaS product – it’s truly effective. As users move around the interface you can guide, interact and answer questions, it’s a bit like sitting a personal trainer beside the user.

Consider onboarding and retention as part of the bigger picture, from sales lead through to customer support. A tool like Intercom can deliver a more personal experience, from the very first time a prospect comes into your website and right the way through every session of using the software.

DON’T NEGLECT ONBOARDING AND RETENTION

IDEA 3

7 Smart Ideas to Market your SaaS Business in 2018 | A Xander Marketing Guide 7

Pay-per-click (PPC) continues to evolve across search, social and SaaS directories.

One new tactic on AdWords that if you haven’t implemented yet is worth considering are Remarketing Lists for Search (RLSA).

This feature lets you customise your display and search ads campaign to try to create engagement and drive interaction with people who previously visited your site. You can tailor bids and ads to these visitors when they browse the web and use apps.

Despite allusions to being unbiased review sites, software directories such as Capterra, GetApp and SoftwareAdvice follow the Google PPC model – you bid for ranking. However, if you choose to list with them, these directories are dynamic and regularly mix it up, so you need to stay tuned in and aware of how and what they are doing. Also consider Quora, the Q&A portal that features user generated content to answer common questions. It has a lot of organic traffic and accepts paid for advertising on specific Q&A topics.

GDPR is going to have an impact on PPC. Cookie opt-out is going to reduce numbers in the EU cookie pool, increasing demand and driving auction prices up. However, those that choose to stay in are likely to be higher quality prospects that are properly engaged.

STAY ON TOP OF PPCID

EA 4

7 Smart Ideas to Market your SaaS Business in 2018 | A Xander Marketing Guide 8

Of course we’re going to mention them again (Intercom!). It’s well worth thinking about what the improved engagement and interaction it offers could mean for your business. An increase in the average customer lifecycle would have a deep, long-term and lasting positive effect.

On a more basic level, sign up tools that automatically fetch data and populate sign up forms create a more frictionless experience and uplift sign up rates.

Meanwhile, also take a look at Drift – “the world’s first and only conversational marketing platform”. Machine Learning and Big Data analysis has resulted in the computation of data points such as Intent and Sales Velocity scoring. Drift identifies website visitors with a high sales velocity before they signup. This provides the opportunity to fetch data about the visitor’s business and go on to give them a different experience, such as live chat with a salesperson.

LOOK OUT FOR SAAS SOFTWARE THAT COULD HELP GROW YOUR BUSINESS

IDEA 5

7 Smart Ideas to Market your SaaS Business in 2018 | A Xander Marketing Guide 9

Some SaaS companies have read the writing on the wall. Getting the product-market fit right and then tying up all their content and marketing has brought traction and fast growth to a lot of SaaS companies. However, once out in front, the best ones have asked, “What’s coming next?”

The answer is usually your competitors are going to catch you up and they may be disruptors that upset your business model by undercutting or even giving functionality away for free. And before they become paying customers, users now expect to get something for nothing from your software.

These are the reasons why HubSpot has spent the last 4 years or so using its ‘product as growth’ - building its user base of freemium customers and focusing on upselling and converting them into paying customers. It’s well worth some thought about how freemium might improve traction and fill your sales pipe with captive opportunities…

DON’T DISMISS THE ‘FREEMIUM’ OPPORTUNITY

IDEA 6

7 Smart Ideas to Market your SaaS Business in 2018 | A Xander Marketing Guide 10

As you grow you need to think about your marketing team. At different stages of growth in the SaaS maturity model you are likely to have different requirements. Generally, how you do marketing is determined by your budget.

Now there are more SaaS companies, more of them are growing up and hiring Chief Marketing Officers (CMOs). It’s possible this could lead to a shortage of people skilled at CMO level.

One person cannot do all the marketing – there’s too many hats to wear and they’re too specialised. So, you need a mix of people and skills, including copywriting, design, digital and so on.

Consider how much a mixed team of salaried and ad-hoc marketing people might cost and how that might weigh up against the marketing you could buy from a full service agency specialising in SaaS marketing.

SCALING MARKETING TO KEEP IN STEP WITH GROWTH

Growth stage Who performs marketing?

Startups/Early stage ventures Owner, freelancers, agency

MVP/Product - market fit Outsourced agency, possibly some in-house

Growing fast CMO with agency and freelancer assistance

Beyond Hire own team and only use agencies for specialist tasks

IDEA 7

7 Smart Ideas to Market your SaaS Business in 2018 | A Xander Marketing Guide 11

Market forces such as commoditisation, new GDPR rules and analysis of tech investment data suggests that marketing a SaaS venture is becoming increasingly challenging.

SaaS ventures looking to drive growth need to raise their game around marketing and consider:

• Improving brand recognition, establishing credentials and building trust with a content-led strategy

• Sharpening up website CRO with split testing and best practice UX• Maximising LTV of new win customers through better onboarding and improving retention

of existing users• Keeping up-to-date with Google PPC and software directories and similar sites attracting traffic

related to tech• Leveraging other SaaS platforms that help you to grow such, as Intercom and Drift• Migrating to a freemium model to encourage sign up and then focus on upselling and converting

to paying customers• Scaling your marketing effort to keep in step with growth

Xander Marketing has worked with and looked after and performed the marketing function for over 80 SaaS companies.

We are the outsourced marketing partner of choice for SaaS businesses that need to build their brands and increase, website traffic, leads and customers. We work in partnership with SaaS businesses around the world to deliver fully integrated online and offline marketing services that help you grow and:

• Build brands and become industry leaders• Generate more website traffic• Increase and improve leads• Win new customers• Reduce churn rate

It’s this experience, and experience with SaaS businesses that makes Xander Marketing a great choice for businesses that value marketing but don’t have the time, resource or know-how to do it themselves.

T: 0330 223 2770 E: hello@xandermarketing.com W: www.xandermarketing.com

OVERCOME YOUR SAAS MARKETING CHALLENGES IN 2018

Or if you need a hand with it, just get in touch.

ABOUT XANDER MARKETING

SUM

MARY

0330 223 2770

hello@xandermarketing.com

www.xandermarketing.com

The SaaS Marketing Agency

REFERENCES AND FURTHER READING

Why early-stage startups should wait to calculate LTV:CAC, and how they should use it when they doFor Entrepreneurs from David Skok websitehttps://www.forentrepreneurs.com/ltv-cac/

Trying to make sense of 10 years worth of SaaS funding data, in 14 simple chartsMedium blog websitehttps://medium.com/point-nine-news/trying-to-make-sense-of-10-years-worth-of-saas-funding-data-in-14-simple-charts-c509de1d6386

Are there too many SaaS apps lately (2017)?Q&A websitehttps://www.quora.com/Are-there-too-many-SaaS-apps-lately-2017

Will 2018 be a major turning point in marketing?Xander Marketing bloghttps://www.xandermarketing.com/will-2018-be-a-major-turning-point-in-marketing/

No one is clicking or reading my marketing contentXander Marketing guidehttps://www.xandermarketing.com/resources/no-one-clicking-reading-marketing-content/

Intercom Books + GuidesIntercomhttps://www.intercom.com/books

Product is the Future of Growth - Here’s WhyReforge career development websitehttps://www.reforge.com/blog/freemium-product-future-of-growth