The SaaS Industry
In recent years, the Software-as-a-Service (SaaS) model has proven extremely effective, leading to industry wide adaptation and movement towards these services. Because of this, new and even established SaaS companies must approach their digital marketing in a strategic manner. Growing a business is difficult, especially in this market. PDM seeks to help SaaS companies to not only grow but thrive by using our digital marketing expertise to generate awareness, acquire new leads, and drive revenue.
Is the Industry Growing?
In recent years, software-as-a-service has experienced tremendous market growth. Cisco’s 2013-2018 Global Cloud Index went so far as to predict that by 2019, 59% of all cloud workflows will be delivered as SaaS. This market shift emphasizes the growing belief that SaaS is now seen as the optimal route for generating solutions for just about any business need.
Thanks to the scalable nature of this cloud-based software, SaaS has become an integral problem-solving tool for both consumers and businesses. As a result, more entrepreneurs than ever are leaning into the SaaS business model, transitioning out of traditional methods and into software-as-a-service.
Because of this growth, differentiating yourself in the market is more vital than ever. There is plenty of room for growth and success, but you must position yourself in such a way that you are in a place where you can take advantage of said opportunities. At PDM, we seek to partner with you to fully harness your services and optimize your marketing potential. This begins with customer acquisition.
From a customer perspective, one of the most compelling aspects of the SaaS business model is that there is generally no cost of goods sold. The SaaS model has successfully applied the freemium model, removing many of the barriers that typically prevent customers from buying. This provides businesses with a low-cost opportunity to convince customers of the validity of their offered good as long as they can find the customers.
Thanks to this model, a direct sales approach is less cost effective and useful than an emphasis on digital marketing with less experienced salesmen being used for product demonstrations. By altering your customer acquisition pathway, you make the process more cost-efficient, which in turn allows for rapid scalability.
We believe that SaaS companies must lean into the recurring revenue stream model to increase customer acquisition. Such a model allows for a far greater margin of error and our data shows that customers are more willing to pay for goods or services in small, regular, increments as opposed to one large lump sum. While it involves smaller payments upfront, these monthly or annual revenue streams provide a far higher lifetime value per customer than would be realized with the outmoded single payment services or products.
While this provides a serious opportunity, you cannot dither around when it comes to retaining customers and initial investment. With such a payment scheme in place, the need for a digital marketing team is even more crucial to your success since with this model everything must be prepared upfront; your products have to be primed, prospects need to be harvested and even once those customers are acquired, they will not pay off their cost until further down the road. We not only help with this customer lead generation, but we also help track your monthly recurring revenue that will be collected off monthly subscriptions.
How to Promote Your SaaS Business Online
Since SaaS is an online product that utilizes cloud hosting, the easiest and most logical way to reach users is via the internet. Figures demonstrate that digital marketing and modern-day digital sales prospecting have been key drivers of most successful SaaS companies. A significant reason for this is that the technology we employ is cost-efficient and the average deal value is drastically lower than what would be seen with past methods.
A common trend with the most successful SaaS products such as Asana, AirBnB, and Slack, is that these companies build their marketing into the product in the hopes that users like the service and then share it with others. This is our ultimate goal for any SaaS company we work with, since this free online word-of-mouth travels rapidly to other online users, allowing SaaS companies to scale rapidly.
SaaS Industry Marketing Challenges
While there are many reasons to be optimistic about the growth of SaaS, there are several challenges that are typically faced, especially by new businesses. The goal of dedicated digital marketing teams is to help turn these hurdles into much smaller obstacles. Such hurdles include:
Marketing Value Driver Checklist
To obtain success SaaS companies must work towards integrating common industry methods into their development and marketing game plans in order to truly maximize their company’s value and scaling potential.
Now you may feel like you can handle digital marketing on your own or do it in-house. While we would not advise such a course, it is possible; however, before you take that path, consider these questions as a litmus test for how prepared you actually are.
- Do you have a thorough understanding of your ideal customer’s buyer journey?
- Does your SaaS create a high barrier for any competitors because of your niche expertise?
- Will your product be marketable to a diverse customer base?
- Is this product made with customer retention in mind?
- Is their proprietary intellectual property or patents that provide a clear customer- competitive advantage?
- What is the expected growth rate? What is the optimal growth rate?
- Is there a predictable and constant form of revenue generation?
- What is the net promoter score (NPS) with customers?
- Does the SaaS have marketing to sales cycle efficiency?
- Have you documented and circulated user testimonials who like the product?
With the SaaS market progressing and evolving at breakneck speeds, a marketer cannot grow complacent and simply go about business as usual; rather, they have to use data and trends to drive sales. In order to distinguish themselves in a crowded, oversaturated, marketplace, SaaS companies stand to benefit from PDM’s creative and innovative methodology to digital marketing.
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Contact us today to learn more about how our integrated marketing strategy can help get you results!