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SaaS (Software as a Service) is a method of distributing software where the software applications are being centrally hosted by a service provider. It is an incredibly difficult and tricky service to market as it deals with something which is ever-changing but at the same time intangible. SaaS marketing needs to be engaging, as well as, data-driven, and customer-focused.

According to statistics, in 2008, the overall SaaS market was worth $5.5 billion. Now, it is worth $116.4 billion and is expected to reach $164.29 billion by 2022. And with 4 billion people using the Internet as of 2018, the potential customer base is huge and there’s only more success to look ahead to. (Reference)

Three key metrics required to create a successful demand generation model
Marketing metrics are the backbone of every successful SaaS marketing strategy as they not only tell you how effective your marketing strategies are but they also show potential areas of opportunity. The three most important metrics for SaaS companies are:

  1. Customer Acquisition Cost (CAC): Customer Acquisition Cost shows how much it would cost you to convince people to purchase your product. This metric gives a clear idea of the investment outcomes and can be easily calculated by dividing the total number spent on all the marketing expenses in order to gain more customers by the actual number of customers acquired in that time period.
  2. Lifetime Value of a Customer (LTV): If you have managed to retain your customers then it means, they are loyal to you. The lifetime value of a customer is a metric that can help firms to focus on the long-term value they derive from their customers. This metric can serve as a good estimate on how much you can actually spend to acquire new customers. Lifetime Value of a Customer is high if you focus on engaging your customers.
  3. Return On Investment (ROI): ROI is elemental and is best used in combination with metrics like LTV and CAC. It is the benefit of your investments (the amount of return on your investments), relative to the cost of the investment. With the help of this performance measure, you can analyze the efficiency and the profitability of your investment. This helps you decide whether you are on the path of achieving your goals or not.

SaaS marketing strategies
The market is vast but there is still the pressure for growing the customer base before all the funding runs dry. You need proper, efficient, and proven marketing strategies if you want your software to push through and succeed in the huge market with ever-increasing competition and pressure.

Exceptional customer service, proper targeting, giving out freebies, developing and reinforcing user trust, leveraging paid advertisement, recognizing your ideal customer base, building your authority and building your team on an international level are examples of the SaaS marketing strategies which are most effective once you personalize them according to your own needs.

  1. Content marketing
    Those SaaS company websites who are leveraging the power of content marketing to increase brand awareness and online presence see a significant increase in their conversion rates as content marketing generates three times as many leads as traditional marketing while costing about sixty per cent less at the same time.

    • Content marketing drives SaaS sales
      Content marketing drives traffic and converts leads into customers by combining various tactics such as blogging, landing pages, promotional marketing activities like social media and email marketing, lead nurturing, and conversion offers like freebies, webinars, e-books, etc.
    • Content marketing reduces your SaaS churn rate
      Churn rate is the annual percentage rate at which customers who have made an initial purchase stop subscribing to a service. It is the opposite of retention and you need to decrease it as much as you can by investing in the content generation to show your customers value. Having the right distribution channels in place and not losing sight of email marketing is extremely important. Being mobile-optimized is also very important as not having mobile-optimized content may be the biggest mistake you make.
  2. Product Trials
    It basically means “test-driving” your product and making a sample available via your website. Product trials are an increasingly important source of lead generation for the SaaS industry. It is a cost-effective way of demonstrating product value and increasing leads. As more and more people get to enjoy the smartly tailored product, they understand it better and visualize the profitability of the product. This makes it easier for them to purchase it and utilize the more customized features of the product for their project.
  3. Referral marketing
    One of the most effective types of leads, referral marketing is typically low-cost and closes relatively quickly. It is the method of promoting services through referrals which are usually the words of mouth. The New York Times states that 65% of all the new businesses come via referrals (Reference). This suggests that on an average around 2/3rd of consumers buy a product after getting a recommendation for it. Where do they get the recommendation from? Here comes the role of the employees and marketing personnel. They help the business sell product to the customers who then further recommend it to their friends and relatives. As the word of honour for the product spreads around, the sale of the product increases. This is known as referral marketing.

    Reward incentives for referrals

    You can increase your customer base and conversions simply by asking existing customers to refer you in their social circles to other potential customers. In turn, reward these customers with freebies.
  4. Google AdWords
    Millions of people click on search engine ads per day. Ads are becoming more prominent in Google search results so you should keep investing in Pay-Per-Click (PPC) so as to not miss out on a portion of potential leads. Pay-per-click not only delivers targeted traffic, it is also highly scalable and predictable in terms of cost and results. Through the pay-per-click internet marketing, you can increase the traffic to your official product website. In this, as an advertiser, you get the opportunity to advertise your product on different eCommerce websites. And then, with every single click on the ad, you get to enjoy the increasing number of traffic at a very reasonable and economical price.
  5. Target Review websites
    Business software consumers turn to review websites to read and compare reviews before making a purchase. Online reviews by customers are only growing in influence. Send all relevant information to the editorial team and then encourage people to write reviews and give ratings. For example, if you have a Magento based eCommerce website you may use customer reviews extension to collect reviews and ratings. Popular SaaS review platforms
    Trust Radius
  6. Upsell and cross-sell:
    Image source: https://www.smartrmail.com/

    Upselling means encouraging your customers to invest in a comparable higher-end product than the one they’re considering while cross-selling means inviting your customers to buy complementary or related items. The overall point of this tactic is to gradually but surely attract each prospective customer towards the highest package price appropriate to what they’re looking for.

  7. Your SaaS product marketing plan should outline how to increase MRR the smart way
    MRR is the Monthly Recurring Revenue. Increasing MRR should be your ultimate goal so you’re most likely looking for effective marketing tactics to increase your MRR. Some things you can do for your clients are:

    • Acquire new users: New users can be acquired by leveraging channels like social media blogs, industry associations, Google AdWords, forums, etc. Be present at the right events, as well as, get customers through online reviews and referrals.
    • Add new services: Think of products which can create additional revenue like up-sells or add-ons to your core product.
    • Refine and improve your differentiation: Be unique in your selling proposition and be crystal clear about what sets you apart from your key competitors.
  8. Don’t forget customer retention in your SaaS marketing plan
    Even small differences in customer retention rate can create an impact on the money in your bank. It tells you what percentage of customers and revenue you keep getting each month and is also a good benchmark to keep track of how many customers you lose. Don’t forget customer retention, if you want to use your current rate as a benchmark and add your goal about where you want to be a year into the future.
  9. Facebook Retargeting
    Facebook retargeting helps you re-engage those people who have shown interest in your products and compel them to convert. You can retarget them by offering free trials and other freebies, specific product ads, limited time discount offers, and endless other offers to give them a push to sign up and become a customer. There are events where just seven days of Facebook retargeting process has helped some companies achieve an ROI of 1,284%.

Taking your SaaS marketing to the next level
SaaS marketing is tricky for sure but you can optimize your long-term success rate by laying some foundations in place such as:

  • Enhancing your website and using it as a lead generation tool
  • Focusing on business benefits instead of technology
  • Nurturing your prospects by adding value to their every stage when they’re making decisions
  • Marketing regularly to existing customers and increasing customer retention rates
  • Opting for marketing automation once you have an active strategy

Listed here are the strategic marketing tactics which will help you generate leads as well as retain your customers. Increasing the number of leads and the rate of customer retention will doubtlessly make your SaaS business stronger.


Zeeshan KhalidAvatarZeeshan KhalidZeeshan Khalid is a Web Architect, an eCommerce Specialist, and an Entrepreneur. He is the CEO and founder of FME Extensions, a leading e-commerce web design and Magento 2 eCommerce development agency. Over the years, FME Extensions has successfully delivered projects in Magento, WordPress, WooCommerce, Joomla and other CMS/shopping cart platforms. You can find him on the LinkedIn.View all posts by Zeeshan Khalid