In this guide, you’ll learn everything you need to know about creating an effective SaaS marketing plan that will help your company achieve rapid growth.
This guide will teach you:
Customer research: Why finding your ‘ideal customer’ is the key to success.
Marketing goals and budget: How to define your goals and manage your resources.
Inbound marketing strategies: How to maximize web traffic (and why it’s your lifeblood).
Outbound marketing strategies: How to nurture your audience into leads for your sales team.
SaaS marketing metrics: Which ones are important for growing profitably and why.
So grab and coffee, block out distractions and get ready to dive into the world of SaaS marketing!
1 – Know your ideal customer
The key to creating an effective SaaS marketing plan is knowing your ideal customer.
You need to go beyond superficial demographics such as age, profession, and gender. You must figuratively ‘step into their shoes’ and get a sense of the problems they are facing.
The best way to do this is to use the jobs-to-be-done framework. The JTBD framework forces you to look at your product the way your customers do. This approach helps you uncover the social, emotional and functional dimensions that play a part in your customers’ decision-making process.It helps explain the various dimensions that influence why your customers make the choices they do.
Going beyond traditional market demographics and truly understanding your customers requires market research.
Here’s what to do:
- Timetable an extensive user research session with your employees, including representatives from your sales development team, client support team, account management team and any other relevant employees that have direct contact with customers.
- Find out what issues customers are struggling with, e.g., their ‘pain-points’. This approach will give you clues as to how you can create and deliver content that has real value and helps you connect with your customers in an authentic way.
- Develop a strategy for learning more about your customers. For example, interviews with potential, current, and past customers, outreach emails, surveys, and studying customer service chat logs.
Ask questions such as:
- What was the problem you were looking to solve before stumbling across our product or service?
- How were those problems solved once we started working with you?
- If you were to research our product or service, what would you search for?
Once you’ve collected the data, you’ll be able to identify the most common pain-points that your customers are struggling with. This helps you begin to create a plan for generating useful, valuable content.
2 – Define your SaaS marketing goals and budget
Many SaaS companies find that transitioning from the product-market fit phase to the growth phase is no mean feat.
To create a workable SaaS marketing plan you need to define two things:
- Your goals
- Your marketing budget
Let’s look at exactly how to do this.
1 – Defining your goals
The first step in creating your SaaS marketing plan is to define your goals. You may already have a rough idea of what you want to achieve, such as:
- Increase awareness
- Aligning marketing and sales
- Increasing conversions
While having big, audacious goals is all well and good, you need to make sure they are attainable. In other words, they should be SMART goals.
SMART is an acronym that stands for:
- Agreed upon and achievable
SMART goals have all of the above characteristics and help you avoid the trap of setting goals that are too abstract or vague.
- You want to achieve 15 percent monthly MRR growth within six months.
- You are aiming for $1 million in ARR within a year.
Setting SMART goals will help you achieve growth and give you an operational framework that helps you measure what’s working and what isn’t. However, you also need to set goals that align both your marketing and sales teams.
Both sales and marketing need to cooperate to meet your goals, so aligning both departments behind a common set of goals is the way to go.
Your SaaS marketing goals should be based on the following metrics:
- Marketing-qualified leads
- Sales-qualified leads
Here’s how to use these metrics to set shared goals;
First, you need to use your funnel metrics and revenue-growth goals to establish your revenue and/or lead-commitment.
Next, you need to establish a service-level agreement between your marketing and sales teams. As marketing is generally responsible for generating around40 percent of gross revenue, you can use your actual gross revenue amount and work backward.
This approach helps you determine how many visitors and leads your marketing team needs to generate and how many account executives will be needed for your sales team.
2 – Defining your marketing budget
Once you’ve defined your goals, you need to give your sales and marketing teams the resources they need to be successful.
There are a number of schools of thoughts when it comes to setting a marketing budget. According to research from SaaScribe, public SaaS companies generate $2.20 in revenue from every dollar they spend on marketing.
To calculate the marketing budget, you must identify your revenue-growth goals and what percentage of those goals your marketing department is expected to find.
Look at the historical data of your sales funnel conversion rate metrics and determine how many leads must be generated from each step. Then determine how much website traffic needs to be generated to reach these goals.
Be sure to analyze which campaigns generate the highest number of leads and how many new and paying customers signed up. Using closed-loop reporting to see the full lifecycle of the leads will help you allocate your budget accordingly and hit your revenue targets.
Marketing new products requires the right tools and significant creativity so you’ll need to decide how much you can afford to spend to reach your goals. Typical SaaS marketing budgets range from ten to forty percent of forecasted annual recurring revenue, so you will need to prioritize which goals to target first and allocate funds accordingly.
3 – Develop an inbound and outbound strategy
Developing an inbound and outbound strategy is a crucially important part of creating a successful SaaS marketing plan. The right strategies can help you build the momentum necessary to achieve fast growth, it can help you build your user base and meet your revenue goals.
Here’s what to do:
Inbound marketing strategy revolves around content marketing and SEO. One of the most promising approaches is known as ‘growth hacking’; where you grow your user base in a short period to time. The key driver in this situation is website traffic; you need to seek out your audience and generate significant buzz.
You can achieve this using the following strategies:
- Communicate with broad audiences via social media
- Create valuable, engaging content such as blog posts, articles, and guides.
- Leverage existing relationships by securing webinar and/or guest blogging opportunities.
How to leverage inbound marketing
As we discussed in our guide to SaaS content marketing, as soon as internet users come into contact with your company they are entering into what’s known as a ‘buying journey’. This gives you the opportunity to capture their attention and convert them into paying customers.
The four stages in the ‘buying journey’ that any potential customer will go through are:
You need to create content that appeals to users at specific stages of their buying journey.
- Resource guides, tutorials and ‘how-to’ guides are effective ‘Awareness’ stage content.
- Demos, case studies, and product webinars are great for users in the ‘Consideration’ stage.
- Potential buyers who enter the ‘Conversion’ stage will respond well to content that offers ratings and reviews, consultations or free trial offers.
- Once users become paying customers, they’ll respond to the ‘Retention’ stage content that informs them about promotional offers for renewals or upgrades.
Content is an effective inbound marketing strategy that can help you capture the attention of potential customers and increase your company’s online presence. But it’s only effective when you have the right strategy; you can’t just churn out endless ‘How to’ guides and expect customers to flock to you.
You should create an extensive content calendar that offers a detailed roadmap showing what you’ll publish, the purpose of the content and the date and medium it will be published on.
Targeting the right stages of the buying journey with appropriate content will help you:
- Increase the quality of the leads being generated
- Convert more prospective buyers in the ‘awareness’ stage into new leads
- Keep your sales pipeline full
- Funnel new contacts towards the ‘Decision’ stage and towards sales conversions.
If you haven’t started using an inbound marketing platform such as HubSpot yet, be sure to consider one to manage and analyze your inbound marketing efforts.
Your outbound marketing efforts should center on paid marketing and cold emails. Once you have high-quality content and a developed conversion path setup on your website, you can start pushing more traffic towards this end.
To be successful, you should:
- Use paid advertising and targeted social ads to market to your ideal customer.
- Create unique conversion paths with landing pages and thank-you pages to increase your conversion percentage.
- Set up correct analytics such as tracking URLs to give you the metrics need to report on the ROI of your campaigns.
4 – SaaS Marketing Metrics You Should Be Tracking
You may be very familiar with the key performance indicators (KPIs) for your SaaS business, but you may be overlooking marketing KPIs. These metrics are critically important and help you dig deeper to track the success of your marketing efforts.
But focusing on too many KPIs (say 20 to 30) is just as counterproductive as focusing on too few.
Churn – how much business you’re losing within a certain period of time – is one of the most essential metrics for any SaaS company to measure. As repeat customers account for up to 80 percent of the average SaaS company’s revenue, you’ll want to track this KPI on a monthly basis.
To measure churn, divide the total number of customers you lost in a month by the number you had at the beginning and then multiply by 100.
- Lead-to-Customer Rate
Your Lead-to-customer rate is an important KPI as it shows you how well you’re generating sales-ready leads and whether you are improving or declining over time. To calculate this metric, divide your total number of customers per month by your total number of leads, then multiply by 100 to get the percentage.
Track this KPI on a monthly basis to get a sense of how you’re doing.
- Unique visitors
Tracking the number of unique visitors is one of the most important marketing KPIs. The free Google Analytics tools will be able to show you how visitors are getting your site, whether by
- Organic search
- Social media
- Direct traffic
- Paid media efforts
This will let you determine where your marketing budget is being well spent and where it’s not.
In general, there are three main types of leads:
- General leads
- Marketing qualified leads (MQLs)
- Sales qualified leads (SQLs)
General leads are internet users who are in the ‘Awareness’ stage of their buying journey. They may have filled out a form on your website and are probably just starting to do research.
Marketing qualified leads (MQLs) are users who have completed a number of specific actions such as downloading a freebie or revisiting your website a certain number of times.
Sales qualified leads (SQLs) are users who are more qualified than MQLs; they are likely in the ‘Decision’ portion of the buying journey and are evaluating vendors. They are likely worthy of a direct sales follow-up.
These definitions are very general, so you can work with your sales and marketing teams to establish formal definitions, such as when a general lead becomes an MQL, or what makes an SQL versus an MQL. Tools such as HubSpot, Marketo, or Pardot will help you measure leads and break them down into subcategories, given the parameters you set for each subcategory.
- Customer Acquisition Cost (CAC)
The fifth most important metric is your customer acquisition cost (CAC). This shows you the total cost of acquiring a customer. Simply divide your total sales, marketing spend and personnel costs by the number of new customers you added over a given time period.
For example, if you spent $200,000 on sales and marketing last quarter and added 200 new customers, your CAC would be $1,000.
- Customer Lifetime Value (CLV)
The sixth most important metric is the Customer lifetime value (CLV). This is the average amount of money your customers spend with you during their engagement with your company. A CLV calculation shows you what your average customer is worth to your company.
To calculate CLV, you’ll need to know your customer churn rate and then divide number one by this number. For example, a one percent churn rate would give you an average customer lifetime of one hundred months.
Next, you need to multiply this number by your average revenue per account (ARPA) over a given time period, such as the past 12 months. To find your APRA, divide your total annual revenue by your total number of customers. For example, if your company generated $200,000 in revenue last year from 200 customers, your APRA would be $1,000.
Multiplying your ARPA ($1,000) by your average customer lifetime (100 months) gives you your CLV: $100,000.
- CLV:CAC Ratio
The seventh metric is your CLV:CAC ratio. This shows you the lifetime value of your customers and how much it costs you to acquire them. This metric is one of the most effective ways of measuring the viability of your company. Simply compare your CLV and CAC to get your ratio: a CLV three times greater than CAC indicates a healthy business.
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