The SaaS market for most categories is highly competitive, and having a great product is just not enough to standout. There are so many options available and customers have become more selective in their decision-making process. Reaching these potential customers is one thing but convincing them to choose your product over many others in the marketplace is another. That's where an effective SaaS marketing funnel comes in. A SaaS marketing funnel acts as an internal direction that guides potential customers through various stages of the sales journey, from initial awareness to becoming a paying customer.
Here we will walk you through the process of building, defining and optimising a successful SaaS marketing funnel, providing you with strategies to achieve marketing success within your own business.
What is a SaaS Marketing Funnel?
Before diving into the specifics of building a funnel, it's important to understand what it is and why it's important. Businesses of all types use sales or marketing funnels to define the customer journey at each stage from building awareness of your brand to after the initial purchase. This is no different for SaaS businesses. Unlike e-commerce businesses who tend to focus on short-term marketing promotions to acquire new customers, SaaS businesses usually have much longer sales cycles which can make it even more important to have a clear picture of the funnel. In a world where everything is tracked, a longer sales cycle makes it incredibly difficult to understand where the user has come from and it's highly likely that they will have had many touch points with your business before committing to a free trial, demo or purchase. SaaS businesses tend to have much higher value customers than eCommerce as they do not make a one-time purchase, rather they generate recurring revenue on a monthly basis.
It can often be a very big commitment to switch software from one provider to the next or if the SaaS product is central to running their business. This is why a successful sales and marketing strategy requires building relationships, gaining trust, and providing ongoing value to customers throughout their journey and beyond.
The Stages of a SaaS Marketing Funnel
The stages of a SaaS marketing funnel may vary slightly depending on your specific business and target audience. However, they generally follow a similar framework. Each stage requires a tailored marketing approach from the messaging to the channel. Let's explore the key stages of a SaaS marketing funnel:
Awareness is where potential customers first become aware of your brand and product. This can be through various channels such as social media, content marketing, advertising, or referrals. Your goal at this stage is to grab their attention, create interest, and make them curious to learn more about your product and what problems it can solve.
To effectively attract potential customers at this stage, focus on creating compelling content that addresses their pain points and showcases the unique value proposition of your product. This can be in the form of blog articles, social media posts, videos, or webinars. Make sure your messaging is clear, concise, and resonates with your target audience.
When creating any piece of content make sure to put your target audience at the centre and regularly refer to your customer profile.
It can take time to build authority on channels like SEO and Social Media and we recommend starting as soon as you can, even before you have a product to promote.
If you do have a product that users are already paying for and you have reached product-market-fit then running paid advertising could be a quick way to increase leads, demos and free trials of your product. We at Lever help B2B SaaS businesses scale through PPC and we'd be happy to help your business reach its full potential. Get in touch to arrange a call with our experts.
What metrics should you monitor?
- Engagement on social media - Likes, followers and shares. Although these don't indicate a sale and can be considered vanity metrics they do highlight that your content is resonating with your target audience.
- Engaged sessions - This is the number of sessions that lasted longer than 10 seconds, had a conversion event or had 2 or more page views.
- Goals or Conversions - This could be webinar signups, demos booked, free trials or other. Think about what action you want a user to take and define that as a goal.
Once potential customers are aware of your offering, the next stage is to capture their interest and engage with them. This is where you should provide more detailed information about your product, its features, and how it solves their specific problems. Make use of case studies, customer testimonials, and demo videos to showcase the benefits and success stories of your existing customers.
At this stage, you are trying to establish credibility and build trust. Offer valuable resources such as ebooks, whitepapers, or free trials to further engage potential customers and demonstrate your expertise in the industry. These can be downloadable assets that collect their contact information to nurture the relationship and move them further down the funnel.
What metrics should you monitor?
- Number of onsite visitors - This is not always a great metric to use as the visitors need to be relevant to your product. However, it does have a place especially if you're just starting out.
- Engaged sessions - This is the number of sessions that lasted longer than 10 seconds, or had a conversion event, or had 2 or page views.
- Conversions - This could be newsletter signups, ebook downloads or any other call-to-action that you're optimising for.
In the consideration stage, potential customers are evaluating different options and comparing your product with competitors. This is an opportunity for you to differentiate yourself and showcase why your solution is superior. Provide detailed product information, pricing plans, and highlight your unique selling points.
Case studies and customer reviews play a crucial role in this stage, as they provide social proof and help potential customers envision the benefits of using your product. If your product subscription fee allows offer personalised demos or consultations to address any specific concerns or questions they may have. The goal is to build confidence and convince them that your product is the best fit for their needs.
What metrics should you monitor?
- Number of Free Trial or Demo sign ups
- Conversion rate from visit to Free Trial/Demo - Tracking this will allow you to understand how convincing your product or sales process is.
- No-show Demo rate - Are users booking calls with your team but not showing up? Why is that?
- Number of webinar attendees - Product webinars are a great way to show off your product to a number of users at once. Ideally the attendee list is growing over time.
The conversion stage is where potential customers make the final decision to become paying customers. This is the ultimate goal of your SaaS marketing funnel. Make the purchasing process as seamless and frictionless as possible. Offer clear pricing options, provide secure payment methods, and ensure a smooth onboarding experience for new customers.
At this stage, it's important to have a solid customer support system in place. Offer timely assistance, provide comprehensive documentation and tutorials, and proactively address any issues or concerns. This will help build trust and foster long-term customer relationships.
What metrics should you monitor?
- Free Trial/Demo to customer conversion rate - The rate at which customers convert from a trial or demo to a paying customer.
- Deal size - Not all deals are equal in size. Track this to understand where to allocate sales resources.
- Churn rate - This is the percentage of customers who cancel in a certain period of time, usually monthly. Low churn is what all SaaS companies strive for.
Unlike traditional businesses, SaaS companies have a strong focus on customer retention. Retaining existing customers is essential for generating recurring revenue and maximizing the lifetime value of each customer. This is where the retention stage comes into play.
Invest in ongoing customer success programs, such as regular check-ins, personalized communication, and proactive support. Continuously deliver value through product updates, additional features, and exclusive offers. Encourage customers to provide feedback and actively listen to their needs and suggestions. By prioritizing customer satisfaction and loyalty, you can reduce churn rates and foster customer advocacy.
What metrics should you monitor?
- Churn rate - As above
- Feature adoption - To understand if users are using the key features and if not why not.
- Net revenue retention - NRR is revenue generated from current customers and gives an indication of the revenue potential from existing customers.
- Net promoter score (NPS) - NPS tracks customer satisfaction and measures how likely your customers are to recommend your product or service to others.
Key Metrics and KPIs to Track in Your SaaS Marketing Funnel
To continuously optimise your SaaS marketing funnel, it's crucial to track key metrics and KPIs. These metrics provide valuable insights into the effectiveness of each stage and help identify areas for improvement. Here are some key metrics and KPIs to consider:
- Conversion Rate: This can mean many things to many people. Inside a SaaS business there are many different conversion rates, it could be the conversion from visitor to a free trial or free trial to paying customer. Whatever you're are tracking this ratio helps measure the effectiveness of your metric.
- Customer Acquisition Cost (CAC): The cost of acquiring a new customer. This metric helps assess the efficiency of your marketing and sales efforts.
- Customer Lifetime Value (CLTV): The total revenue generated from a customer over their lifetime. This metric helps measure the long-term profitability of each customer.
- Churn Rate: The rate at which customers cancel or stop using your product. This metric helps measure customer retention and identifies areas for improvement in your product or customer experience.
- Average Revenue per User (ARPU): The average amount of revenue generated by each customer. This metric helps assess the monetization of your customer base.
- Time to Conversion: The average time it takes for a potential customer to convert into a paying customer. This metric helps identify bottlenecks and optimize the customer journey.
- Customer Engagement: Measures the level of customer interaction and usage of your product. This metric helps assess customer satisfaction and the stickiness of your product.
By regularly monitoring these metrics, you can make data-driven decisions, identify areas for improvement, and optimise your SaaS marketing funnel for maximum effectiveness.
Building Your SaaS Marketing Funnel: Best Practices and Strategies
Now that you understand the stages of a SaaS marketing funnel and the key metrics to track, let's explore some best practices and strategies to build and optimise your own funnel:
1. Understand Your Target Audience
Before you can effectively build a SaaS marketing funnel, you need to have a deep understanding of your target audience. Conduct market research, analyse customer data, and create buyer personas to identify their pain points, motivations, and preferences. This will help you tailor your messaging, content, and offers to resonate with your target audience.
2. Create Compelling Content
Content marketing plays a crucial role in attracting and engaging potential customers at every stage of the funnel. Develop a content strategy that aligns with your target audience's needs and preferences. Create high-quality blog articles, videos, case studies, ebooks, and webinars that provide value, educate, and showcase the benefits of your product.
Use SEO to optimise your content for relevant keywords and improve your organic visibility. Leverage social media platforms, guest blogging, and influencer partnerships to expand your reach and attract a wider audience.
3. Implement Lead Generation Strategies
Lead generation is a critical component of a successful SaaS marketing funnel. Implement lead capture forms, gated content, and landing pages to capture potential customers' contact information. Offer valuable resources, such as ebooks or webinars, in exchange for their email addresses. Nurture these leads through targeted email campaigns, personalized messaging, and regular communication.
4. Personalise the Customer Experience
Personalisation is key to building a successful SaaS marketing funnel. Use marketing automation tools and customer relationship management (CRM) software to segment your audience based on their behaviours, preferences, and lifecycle stage. Deliver personalised content, offers, and recommendations that speak directly to their needs and interests.
Implement personalised onboarding processes to help new customers get up to speed quickly and maximise their value from your product. Provide tailored support and proactive communication to address their specific challenges and ensure a seamless experience.
5. Optimise Conversion Points
Optimising conversion points throughout the funnel is crucial for maximising conversions and revenue. Conduct A/B testing on landing pages, pricing pages, and checkout processes to identify the most effective design, messaging, and call-to-action elements. Use persuasive copywriting techniques, social proof, and scarcity tactics to encourage potential customers to take the desired action.
Implement remarketing and retargeting strategies to re-engage potential customers who have shown interest but haven't converted yet. Use targeted ads, email campaigns, or personalised offers to remind them of the value of your product and incentivize them to convert.
6. Continuously Measure and Improve
A successful SaaS marketing funnel is an iterative process. Continuously measure and analyse the performance of each stage, track key metrics and KPIs, and identify areas for improvement. Use analytics tools, such as Google Analytics or product analytic tools like Amplitude, to gain insights into user behaviour, conversion rates, and customer engagement.
Regularly review and update your content, offers, and messaging based on customer feedback and data-driven insights. Experiment with different strategies, channels, and tactics to optimize conversion rates, customer retention, and revenue growth.
Your SaaS marketing funnel is a work in progress
Building a successful SaaS marketing funnel is a complex and ongoing process. By understanding the stages of the funnel, tracking key metrics, and implementing best practices and strategies, you can attract, engage, and retain customers more effectively. Remember to continuously measure, analyse, and optimise your funnel based on data-driven insights and customer feedback. With a well-structured and optimised SaaS marketing funnel, you can drive growth, increase customer lifetime value, and achieve marketing success within your SaaS business.
With the right approach and a commitment to continuous improvement, your SaaS marketing funnel can become a powerful tool for acquiring and retaining customers, driving revenue growth, and establishing your brand as a leader in the market.