SaaS Marketing (Definition, Advantages, and Key Elements)
By Indeed Editorial Team
Published June 2, 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Software as a Service (SaaS) marketing introduces potential customers to subscription-based services delivered through software. Marketing these services differs from traditional methods because the customer has direct access to the service without a sales representative managing the experience. Without the immediate need for a sales team, SaaS marketing strategies can bring potential customers into a sales funnel and convert them into lifelong subscribers with targeted, multi-channel approaches. In this article, we define SaaS marketing, explore some of the inherent advantages it provides marketing teams, and identify key aspects of a successfully run strategy.
What is SaaS marketing?
SaaS marketing is a concept for promoting subscription-based software services and gaining subscribers through marketing projects distributed over the internet. A company that focuses on SaaS marketing might distribute their content through an app store, website, or social media to reach potential customers. This persistent marketing strategy leverages the on-demand format of software to serve promotional content at the convenience of potential subscribers. The software helps enhance that convenience by offering customizability and personalized incentives.
Compared with businesses that market consumable products through one-time purchases, SaaS businesses can offer streamlined, retail-like experiences by offering the same products over long-term relationships with their customers. Services, in addition to products, can likewise support marketing strategies long-term. If a marketing campaign can offer convenience, discounts, quality assurance, or a variety of other benefits for customers seeking services, software as a service marketing might become as important to customers as the services themselves.
Advantages of SaaS in marketing
Traditional marketing is proven to generate revenue for product-based businesses, but SaaS businesses create new opportunities for marketers to focus customer attention and generate sales. Software as a service marketing goes further to help maintain long-term sales by incentivizing subscription models of consumption that change the relationship between customer, service, and marketing. Here are some of the key advantages that come with this change:
Offers trial before purchase
As SaaS companies sell intangible software products, they can easily offer a free trial or demo upon sign-up before they make any purchase. This incentivizes the sign-up process without committing customers to spend. Whereas product-based marketing relies on reviews, word-of-mouth, or celebrity endorsements leading up to a purchase, SaaS can generate subscription leads while offering service experiences. The trial layer of commitment reduces the risk for the customer and removes the barrier of sign-up from a commitment to purchase.
Has a shorter sales cycle than product-based marketing
This is because customers can immediately see the software they purchase on their computer or mobile device. It becomes easier for them to evaluate whether it's worth purchasing. By de-emphasizing the role of a salesperson and storefront, a traditional barrier between service and customer becomes optional instead of expected.
Costs customers less upfront
Customers pay a smaller amount upfront when they purchase a software product from a SaaS business, instead of paying a large lump sum for a physical product. One reason for this is distributing long-term infrastructure costs through subscription fees. By lowering the cost of service delivery across a network of subscribers, an individual can enjoy lower, consistent rates.
Provides more value to customers
While product-based marketers focus primarily on gaining new customers, SaaS marketers focus on retaining current customers as well. Subscription models reduce customer turnover through convenience and loyalty. This means SaaS marketers might create advertisements and marketing materials that suggest the value of the subscription beyond just the service.
Here are some of the key elements that help make Software as a Service marketing an effective strategy:
Identify customer personas
The first step to creating a successful SaaS marketing strategy is determining who the ideal customers are. Your campaign might reflect how the service benefits general consumers, but a series of diverse, targeted channels might also address specific benefits to customers with specific needs. With enough iteration and analysis of collected data, customer personas may emerge. A customer persona is a category, or profile, that many marketers may use to quickly target large segments of their audience based on their research, observations, and analytics. Personas often emerge from the following data:
Demographics: Location, age, gender, and level of income can show what sort of services might interest a customer.
Business background: A professional background reflects someone's experience. The type of background they have might also reflect their expectations from other businesses.
Values and goals: What customers want and believe informs their self-image. If a company can see a customer the way they see themselves, they might more easily direct them to excellent consumer experiences.
Influences and sources: Finding platforms where customers get their news or entertainment is an opportunity, especially if those sources already make space for marketing.
Motivators and challenges: If customers seek solutions through services, it's worthwhile to identify the specific challenges they face. Assuring customers that their struggles are valid helps draw a connection between the development of services and the people who use them.
Choose your channels
With a general idea of who your marketing campaign targets, you might prioritize the most effective channels. Your customers may spend more time on some channels during holidays than other channels they use normally. Campaign visibility also takes contexts like media trends into consideration. Podcasting has become a lucrative ad space, but experimenting with newer platforms might lead to greater brand awareness. Some common marketing channels to learn about include:
Streaming video platforms
Outdoor signs, installations, or billboards
Develop your content
Determine what type of content represents the influences, values, and features of your marketing campaign. The content should also directly reflect the interests of your target customers. Content can range from humorous to informational. It can also take the form of a written interview with the creator on a business blog or a music video. Diverse content that directs customers toward sign-up forms is called a sales funnel and the primary goal of broadly deployed, diverse content is to bring customers toward the service in ways that feel familiar and exciting. Here are some examples of marketing campaign content:
Technical white papers
Personalized e-mail content
Determine your metrics
Before, during, and after your marketing campaign, key performance indicators in the resulting data may indicate which choices or results might lead to improvements in lead generation or higher returns. Tracking metrics that express performance can measure success, and in time, they might refine your decision-making process. Metrics may vary from channel to channel, which is an opportunity to compare and ask questions about why newsletters were more effective than editorials published in business journals. Some common metrics to track success include:
Amount of followers gained on social media
Number of people reached, or cost per person reached
Amount of engagements or cost per engagement
Number of views or cost per view
Amount of clicks or cost per click
Number of landing page views or cost per landing page view
Amount of conversions or cost per conversion
Nurture brand awareness
Brand awareness ads focus on developing a potential subscriber's understanding of a company's identity and what its services are. Rather than exploring the details of contracts or how certain technologies work, brand awareness focuses on the benefits of services for customers. The metrics that reveal effective branding may include the number of page views or the open rates of e-mails.
Providing value is a deeper commitment on the part of the company and the customer. A marketing campaign sells customers on value by convincing them a service is necessary and not just interesting. Studies, courses, or instructional videos may help customers understand the value of a service. Metrics that show conversion at this phase of the sales funnel might include engagement on a social media ad, webpage views, or the number of new profiles in a given time frame.
A successful campaign translates casual curiosity into participation. A customer reaches the capture stage when they choose to subscribe to a service. That may mean that a customer receives a free trial, a demo, or a full membership. To encourage them further, businesses can incentivize loyalty, offer new services, or recruit them into partnership programs. Metrics for tracking improvement at the level of capture may include fully completed profiles, number of annual subscriptions, number of pre-orders or other investments in the future of a business and its offerings.
Build customer relationships
Customer relationships grow if the customer's role is proven as important to the growth of the business. There are many ways to do this. Fast replies to feedback, unsolicited perks, special offers, and other forms of special acknowledgement are all ways to build relationships. Access to a special tier of decision-making or events that are normally reserved for developers of a service may bring some customers closer to a lifelong brand commitment.
Committed customers, in turn, care about the longevity of a business. Relationships like this may continue to influence the upward trajectory of an SaaS brand and help it retain its integrity in the market.
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