Challenges and Opportunities Present in Software Business & SaaS Marketing
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.
Inbound Marketing to Ensure Customers Find Your SaaS Business (Part 2)
As the developer of a Software as a Service company, you obviously have put a great deal of thought into your product or products. Even before development began, you thought about what kind of service you could provide, what kinds of companies you could serve, why your product(s) is best for those potential customers.
Now, you need to figure out how you can best reach those potential customers and convince them your SaaS company is the best solution to their needs.
That's where the services of an inbound marketing company can come to your assistance. This is the second part of a two-part blog on how inbound marketing can ensure customers find you in the burgeoning SaaS business. In the first blog, we offered you a primer on inbound marketing that you can find here. In the second part, we will explain how all that hard work you did in development can lead directly to a successful inbound marketing program for your SaaS company.
Who Are Your Potential Customers?
As we explained in the primer, inbound marketing targets potential customers who turn to the Internet looking for your service, generally to solve a need or problem they are encountering in their lives or business. In the marketing field, we refer to this as their "pain point" and address how your product can ease their pain.
The first step in identifying these potential customers is to develop a "persona" so you can target the communication to the appropriate level.
Do you have an accounting software package you'd like to sell to Fortune 500 companies? Or do you have an accounting package you'd like to sell to a mom and pop retail store? Or maybe it's an accounting package you'd like to sell to farmers who spend their days in giant tractors, tilling thousands of acres. Each of these "personas" will respond to different forms and levels of communication.
What if your SaaS idea is something completely different? Maybe you've developed a program that can point avid readers to authors who write similar works and you get a share from each book you recommend through an online bookseller. Or maybe it's obscure documentary films. Or Japanese anime. Again, you are targeting very different "personas" so you need your language to appeal to each of these targets as they search for answers.
The more you know about your potential customer, the better your inbound marketing effort can succeed.
What Are Their Pain Points?
Before you ever developed your software, you had a vision for what it could do and why it could appeal to your customers. You already were thinking about how you could relieve their pain points, whether you thought of it that way or not.
Putting that thought into language that will attract potential customers is the next step to a successful inbound marketing effort. Knowing the language of your potential customers is vital to successfully meeting the ever-changing demands of Internet search engines.
If you're promoting that accounting software to Fortune 500 companies, their CFO is not going to search for "accounting software". She is more likely to search for "ASC 606 compliance" to deal with her latest pain point. Understanding how your best potential customers will speak and search boosts your chances of reaching them in the first place.
Drawing Your Customers into the Funnel
If you remember from the primer, we talked about how inbound marketing casts a wide net through search engine optimization to ensure your company appears highly in search results. The next step is to make those searches pay off into customers who enter your funnel and become paying customers.
Research now is pointing to the absolute necessity to feature video on your website and in any marketing effort. HubSpot reports that 59 percent of executives would rather watch video than read text; while individual consumers are four times as likely to watch a video as read text about a product, Small Business Trends reports.
The same report from Small Business Trends notes that 50 percent of executives are likely to seek more information about a product or service after watching a video. The same research found 65 percent will visit a marketer's site and 39 percent will call a vendor after seeing a product or service video.
As you can see, you've already done much of the hard work necessary to launch an inbound marketing effort for your SaaS company in identifying your potential customers and their pain points. Contact us to learn how to take the next step in developing a marketing program that will make your company stand out in the crowded field of cloud computing.
