The temptation to jump into the SaaS marketplace is understandable. Starting any new business carries risks, of course, but for those SaaS companies which succeed, the payoff is huge. In 2015, revenue growth for SaaS companies was 46%. For those companies in the $5 to $7.5 million range, growth was a head-spinning 70%. In other words, those SaaS companies that make it, make it big.
That’s the good news. The bad news is that most SaaS companies don’t succeed. The startup failure rate for all new businesses is more than 90%. That includes SaaS businesses which face bigger challenges than most B2B companies. In addition to the usual challenges of creating a product for which there’s a real demand in the market, developing a solid business model, attracting investors and hiring good management, SaaS startups face two special challenges.
First, the SaaS marketplace is crowded. As Michael Cullen, SoftCoGroup’s product marketing manager notes, competition in the SaaS market is stiff:
“Whether you’re in collaboration, email marketing, HR, CRM, file sharing, project management, or pretty much any other product category within the SaaS industry, you can be sure that there are plenty of other products just like yours.”
Second, the product SaaS companies offer businesses is not especially exciting. It’s software, after all, and persuading businesses—most of which are loath to green light any new expenditure that doesn’t make a strong case for increased sales and improved ROI—to buy new software is an uphill climb. Given those constraints, selling software to other businesses requires a solid grasp of which marketing strategies work for B2B tech companies, coupled with innovative ideas that capture the imagination of business and end users alike.
Employ Strategies with a Proven Track Record
No single set of marketing strategies will work for every tech company, but some have worked so well across multiple industries that including them in your marketing plan is essential. Here are 3 marketing strategies you should incorporate into your 2017 SaaS marketing plan:
1. Define Your Target Audience by Creating Buyer Personas
You can’t appeal to prospective buyers for your software without first knowing who they are—what do the value, what are their pain points, and what messaging will appeal to them? One of the best ways to define your audience is by creating buyer personas: fictional, generalized representations of your ideal customers. As Hubspot explains:
“Personas help us all — in marketing, sales, product, and services — internalize the ideal customer we’re trying to attract, and relate to our customers as real humans. Having a deep understanding of your buyer persona(s) is critical to driving content creation, product development, sales follow up, and really anything that relates to customer acquisition and retention.”
Developing buyer personas is actually easier than you might think, especially with the many, free online tools to help you do it. For example, Hubspot has created an interview guide and template you can download to make the process easier.
2. Increase Users with Growth Hacking
Growth hacking is a set of marketing strategies which grow your user base quickly and inexpensively and drive more traffic to your website. Growth hacking is ideal for SaaS companies which need to grow quickly and typically don’t have much money for marketing. Witness Dropbox, which spent very little to become synonymous with cloud based storage software with its “refer a friend” hack, and Mailbox, which enticed users by requiring them to join a waiting list before becoming an official user.
3. Embrace Inbound Marketing
Inbound strategies are far more effective—and cost-effective—than traditional outbound marketing strategies. For example, inbound generated leads cost about 60% less than outbound leads, and 73% of companies now rely on inbound as their primary approach to marketing (State of Inbound 2016). Use of inbound strategies like content marketing, blogging and social media should be central to your marketing plan.
There’s a lot of competition in the SaaS marketplace, but some businesses rise to the top with innovative marketing ideas that cut through the noise to generate quality leads, boost ROI and increase sales. To succeed, you’ll need a solid plan, and you’ll need to make a reasonable investment of marketing dollars (plan on committing about 35% of revenues to marketing), and commit some of those dollars to a partnership with an experienced digital marketing agency.