Let’s start with the basics: SaaS means ” Software as a Service”. How did SaaS come about? Before the internet when you wanted to use a software you needed to go and buy a CD, nowadays it is considerably easier to get your product out to clients. But wait, if you are no longer selling your software as a CD how are you going to monetize all your hard work?
People might will want to try it out first, or might only need some of the features you offer. In order to maximize revenue and develop the right new features, every SaaS company needs to understand its conversion funnel.
A SaaS conversion funnel is simply a combination of good marketing and sales techniques. Through this marketing funnel, you can filter your audience with information and content which will facilitate potential leads to make purchases.
This is a great way of marketing because, in addition to allowing more people to get to know your product, visitors can provide you valuable feedback to improve your product, saving time and money!
Other services that would benefit from a conversion funnels are: forms, newsletter subscriptions, website functions, content downloads etc.
Most SaaS companies follow the new marketing and sales funnel structure to acquire new customers. Generally, four phases can be identified, each is an opportunity for you to get closer to the visitors, leads and clients depending on the phase.
1. Marketing and site audience
The SaaS marketing funnel begins with creating interesting content, such as informative blogs, presentations or useful material for your audience.
Introduce your product or service by focusing on the problems and challenges of the target audience. Show your visitors that you understand their challenges and that you are there to help them.
The next step is improving the positioning of the website in the search engines. A high-ranking page is a great asset for the company because unlike keyword campaigns the benefits will be for the long-term.
2. Trial signup
The sample content that you are giving is supremely important, you need to explain to your potential customers how the product works and how it is better than your competitors.
Of the total number of people who visited your website, how many have signed up? If this number is low maybe your content is not that attractive or you could be attracting the wrong audience and should consider looking back to step one.
If they are interested in your content you will become a reference for further consultations. Congratulations on your success! you have a potential customer reading your blog, downloading your content or that signed up for a free trial.
3. Using your Software as a Service
After the free trial, do not be quiet for long, announce new features and improvements regularly. You need to make sure potential clients are always aware of what is new. Show them how innovative your product is and involve them in the processes. Use their feedback to improve your product – they need to feel ahead of the curve. Do not forget the number one goal: make potential customers use your product!
Your interactions with leads at this stage should help you identify why some users are dropping out. Which emails have fewer opens? Why are users unsubscribing (you could find out with a poll)? This will help you to know if you are losing potential customers or simply filtering non-paying users.
Having real and tangible data about what your users are doing on your site is very important to maximize your business potential.
4. Paying customers
This is the last step of your acquisition funnel, and it justifies all the efforts and will ensure the economic viability of this business model.
You will be able to guarantee the economic viability of your business model, as long as you keep the customer acquisition cost (CAC) in balance with the average values generated throughout the life cycle of a customer (LTV – Lifetime Value).
The conversion rates of the sales funnel can be measured step by step, and it is important to understand what happens at each stage, since in most cases it is cheaper to improve the rates in the middle of the funnel than to attract more visitors to the web site. This is called optimizing the sales funnel.
Another important task in all this process is the retention. In the long run, it is the difference between success and failure whether clients are making periodical payment or returning to make high value transactions. Here you have 5 smart tips to increase mobile app retention.
Low retention or a high churn rate is really what you want to avoid. To achieve this, you need to help users learn how to use your product with practical tips or tutorial content, anything that is going to help your clients continue using your product. Happy SaaS customers bring amazing benefits as they share your information and recommend your product bringing you more leads.