SaaS marketing is a much more challenging endeavor for a software business than for many other types of businesses for some reasons. First, and foremost, there is no tangible, physical product for a customer to look at, observe and ‘test drive.’ To get potential customers interested in a software product, a software business often has to give away a free trial of the product to reap potential future business through a process known as customer onboarding. Also, some other factors pose unique challenges to SaaS marketing for software businesses among them:
- Constantly changing software and product features
- Extremely short sales cycle (generally a year or less)
- Limited market for many types of software
- Concept of selling a service more than a product
SaaS Marketing and Customer Onboarding
For most businesses, giving away the full product, even for a limited duration, at no cost would be suicidal. However, for software businesses, giving away the product for free is one of the most widely used and accepted SaaS marketing strategies. There are many variations of these free product model strategies such as:
- Free 7-, 14-, 30-day trial periods
- Freemium model (money is charged for proprietary features, functionalities, and other goods.)
- Free Trial w/ a credit card
There are other strategies besides these three variations, but the one thing common to all of these strategies is the giving away a free software product version.
Once a potential customer has access to the product, the key role in SaaS marketing is to convert the customer using the product into a paying customer. On occasion, the conversion happens quickly if the customer sees real value in the product. However, many customers will delay making a decision until the end of the free trial period or just before the first charge on their attached credit card takes effect. Communication between the SaaS marketing personnel and the customer is critical during this time allowing the software business to determine what concern a customer has about the product, and what inducement could entice the customer to commit to purchasing it.
Extremely Short Sales Cycle
Whereas most businesses consider 12 to 24-month sales cycles to be typical or even accelerated, in the software business, many software products are obsolete even at the low-end of this range. SaaS marketing emphasizes rapid sales by finding customers who like the product and are willing to commit now. The fast, even transaction process of buying software is predicated on the inherent nature of the software industry. Software products evolve quickly over time, and it is not uncommon for six, eight or more versions of one software product to be released over the course of a year. A long and drawn-out sales process runs the risk of product obsolescence as demonstrated by the fact that the best, most efficient and comprehensive 2014 tax preparation software is useless in 2016. Therefore, SaaS marketing must focus on increased sales velocity to generate extra revenue and a larger customer base for a software business.
Limited Market for Certain Software Products
Smaller software businesses often focus on niche targets, either due to limited capital or to the nature of the software product itself. Marketing to this small market space allows a software business to specialize in one or two areas of expertise, recognize potential barriers to entry in this market and look for possible opportunities for future growth. SaaS marketing helps cultivate customer and business relationships allowing the software company to communicate with their clients and select a product roadmap that makes sense.
Concept of Selling a Service vs. a Product
The most critical concept to remember in a software business is that the vast majority of the business’ revenue comes from its existing customer base. Under the tried-and-true 80%-20% rule, 80% of a business’ future revenue will come from only 20% of its customer base. SaaS marketing plays a critical role in customer retention by emphasizing the concept as selling a service as well as a product. When creating a SaaS marketing plan, a software business should focus on the establishment of a fully integrated architecture combining a high-quality software product, with excellent service and savvy consumer marketing. When SaaS products of similar quality and price exist in a marketplace, promoting excellent customer service with even a personal touch or two helps a software business and its associated products stand out in a crowd. The primary goal is to a business is to have its SaaS speak for itself.
These methods will help software companies start or improve their marketing efforts to generate leads and build their branding. To gain further knowledge and expertise, contact us using the form below, and let us help you create a strong online presence.