30 second summary:
- Make an art of acquisition – Turn your website into a customer winning machine. Get a deeper understanding of what brings potential customers from interest to sale and help figure out how websites can be optimized to optimize their journey and consistently drive higher acquisition rates.
- Quantify conversion value – Calculate the real cost for each lead and customer. A forensic mapping that ties each step down the buying funnel is critical for publishers to determine the price of a sale and develop campaigns that meet key KPIs and get the most out of budgets.
- Increase revenue from customer loyalty – Find the perfect formula for maintaining a strong income. Sustainable success depends not only on which factors encourage customers to stay, but also on which ones generate the highest profits and justify the largest share of investments.
The pandemic has proven what most SaaS (Software as a Service) publishers already knew: the appetite for on-demand technology is growing rapidly.
SaaS has taken over the business world and the market has doubled as companies in various industries discover the benefits of cloud-based tools that provide convenient access to advanced functionality.
The preference for offsite technology is so strong that global revenue is booming. The expectation for such a thriving space is simple marketing, but the reality is that campaigning in this area is very complicated.
Publishers need to make sure that their efforts target audiences beyond IT and involve diverse stakeholders in different organizations, each with their own conversion motivators and driving forces.
Often times, to increase sales, it is necessary to seduce potential customers with offers to try before they buy and to convince test users to become paying customers. That doesn’t mean standing out from an ever-growing army of competitors.
Potential challenges may be numerous, but they are not insurmountable. In addition to the right product, SaaS players need a smarter strategy based on three pillars: acquisition, conversion, and retention.
Make an art of acquisition
At the surface level, the mechanics of SaaS capture seems simple. Most potential customers research and buy products digitally, often starting their journey by searching online and visiting company websites. However, managing this process effectively is far from easy.
SaaS publishers cannot rely on the lure of their products alone to attract users.
You need the right multi-channel mix of pay-per-click (PPC), display, and social advertising, as well as content that uses refined search engine optimization (SEO) methods to improve website ranking for relevant keywords and drive organic traffic to promote.
Once visitors arrive, websites need to be able to quickly deliver the information they are looking for and enable quick conversions.
All of this depends on knowledge: SaaS publishers need to have a thorough understanding of their target audiences, the terms they are looking for, and what of the interest is driving them to sell. This requires ongoing analysis, testing and adjustment.
For example, by monitoring PPC results, publishers can determine which ads are getting the most traffic for specific user groups and continuously adjust their spend accordingly.
By tracking on-site behavior, they can get a clearer idea of what changes are needed to smooth purchase paths and turn websites into powerful customer acquisition engines. be it fine-tuning landing pages, blogs or navigation.
Quantify conversion value
While driving conversions is critical to any business, profits cannot be made at any cost. To sustain sustained success and growth, SaaS publishers need to ensure that the cost per lead (CPL) and cost per acquired customer (CAC) are equal or hopefully less than the returns received. In other words, the expenses should never exceed the rewards.
To achieve this, it is vital to calculate the actual CPL and CAC for each individual, using data and sophisticated analytical tools to monitor customer activity. However, in order to get reliable insights, the measurement must cover all the bases.
To be specific, publishers should aim for a multi-touch forensic mapping that encompasses the entire user journey – from ad impressions, clicks, and trials to conversion – and accurately assesses the impact of each touchpoint on bottom line results.
This comprehensive view helps determine the exact costs and whether investments are worthwhile. Also, it’s critical that publishers can develop campaigns that target the high-quality leads most likely to deliver the most important key performance indicators (KPIs) and represent efficient use of the budget.
Increase customer loyalty revenue
The last important factor for lasting profitability is of course retention. Imagine a customer relationship management company like Salesforce, one of the largest SaaS companies – 73% of new bookings come from existing customers.
This means Salesforce can hit nearly three-quarters of its annual plan without adding a single new customer. This shows how important it is to look beyond new sales.
In part, improving customer loyalty is about finding the perfect formula to keep customers.
Similar to acquisition, publishers should aim to carefully map customer paths and customize the site’s content or news to deliver a lasting positive experience – to ensure they provide the answers and solutions to people’s questions and problems.
The difference is that publishers are now looking for the factors that encourage customers to stick with them while also considering which ones are generating the highest sales.
This includes in particular the application of measures such as the lifetime value (LTV) and the churn rate. While businesses should always strive to retain as many customers as possible, it is important to realize that not all customers are created equal.
Some may be cheap to buy but will end after a few months, while others will cost a little more but stay longer. By identifying those with the ideal LTV: CAC ratio, publishers can better decide where to focus resources in order to retain the most valuable customers.
SaaS products may be more in demand than ever, but publishers are facing stiff competition for users that is getting tougher every day.
To maximize success, you need to implement layered strategies that master the three most important pillars of acquisition, conversion, and retention – considering the large number of SaaS prospects, streamlining their buying path, and leveraging high-quality opportunities.
Creating a steady flow of customers is one thing; securing and retaining profitable users is another.
Dave Porter is Head of Client Services at global performance marketing agency Tug. With 20 years of experience in online and offline marketing, he has managed many digital marketing strategies for international SaaS brands, including Citrix / LogMeIn, Intuit, Misys / Finastra, Pipedrive, Procore and Bluebeam.