Success in SaaS is a function of rapid growth. With compounding returns and sticky customers, the first company to corner a market takes it. At least until something 10x better comes along.
That means that one of the biggest challenges SaaS companies face is growth, and finding the sales & marketing mix that will achieve those goals.
In this post I explain a few of the options people try, and often fail with; before suggesting an alternative that works.
1) Hire More Sales People
When you need more sales, one of the most common solutions founders reach is that they need to hire more sales people. The logic usually goes something like:
'Well, we have 2 sales reps each selling $50,000 per month. If we hire another one, we'll increase that to $75,000 per month after they've ramped up.'
After the additional sales rep(s) is hired, the hypothesis is quickly proven wrong. Why?
Sales reps can't sell without good leads. Prospecting is quite an inefficient exercise, and will only drive incremental revenue. When you hire additional sales reps and the lead volume isn't there to support them, you often end up in a bad situation: your existing reps have less leads to work, and get upset that they can no longer reach target.
The new rep is just closing the deals your existing team could have, and wasting a load of time prospecting to get the odd new deal.
2) Raise The PPC Budget
PPC is a great way to build awareness of your SaaS product, and a highly effective marketing channel. Unfortunately it's a common mistake to make the snap decision to ramp up the PPC budget whenever more leads are needed.
The problem with this is that for one thing, your ROI with PPC remains constant, at best. Your cost per click can only be optimised so far, and any additional spending is incurred at the same rate.
The second problem is that as you begin to scale, you'll often find that to keep increasing traffic you have to increase your bid price. This results in your cost per lead increasing as you increase your PPC budget. That's the opposite of what rapidly growing companies are looking for, and therefore not a great solution to your growth challenges when used in isolation.
3) Be At Every Trade Show
Trade shows present an excellent opportunity to meet your buyers, but everyone there wants a slice of your prospects' time. Your prospects are seeing tens of stands, having hundreds of conversations and being bombarded by every person they spoke to the minute they get home. It's therefore difficult to have productive conversations that turn into revenue.
Whilst it's important to be at a few trade shows to build legitimacy and demonstrate you're a "real company", don't try to be at every single one. They're expensive, and you'll often get a better ROI on your marketing investments elsewhere.
4) Buying Cold Marketing Lists
When was the last time you were happy to receive a cold phone call, or email? We're inundated with cold calls and emails everyday, and increasingly have no choice but to ignore them.
So why buy cold lists in an effort to reach your prospects? They're just as busy as you.
SaaS solution buyers tend to be senior, and have very little time. It's not always easy to reach them even when they've expressed an interest in your company, let alone cold.
Cold lists are a shortcut that doesn't work, and those of us who have been in the industry for a while have seen this first-hand. There are no marketing shortcuts worth taking.
5) Investing Heavily in PR
How many SaaS business plans initially start out by saying they'll get their initial customers as a result of press coverage:
- Being featured by the tech giants (like Techcrunch) when they raise their first round of funding?
- Trying to get any interview slot they can?
- Emailing journalists left, right and centre in the hope of a mention?
PR is never successful in isolation, and it's common for SaaS founders to put too much weight on "silver bullet" PR tactics being successful. PR is important, but it's only part of what's needed to build a brand.
Don't invest in it at the expense of all other marketing. It's usually more targeted efforts that pay off in terms of real revenue generation: as awesome as it is to be able to tell everyone you're going to be on Sky News tonight.
The Alternative Solution
Instead of looking for quick fixes and tactics that can quickly burn a pile money with the goal of ramping up sales, take a step back to the drawing board and start by interviewing your best customers.
Find out what change(s) within their business triggered them to go out and find you; how they're measuring the success of your product; where they spend time (online and offline); their perceived barriers to adopting your solution; the criteria they used to choose a solution and who else was involved in making the decision to buy.
This provides you with a roadmap for everything you need to do in your marketing effort to attract ideal buyers like them to your website, and convert more people like them into sales.
When you have the roadmap, develop a converged media strategy to reach your buyers. That means creating blog posts and premium content (owned media) which address all the issues your ideal buyers discussed with you, and finding ways to get that content into the places they spend time, both on and offline (paid & earned media).
If they only use LinkedIn, don't bother investing in Facebook ads. If they go to specific trade shows, be at that tradeshow and offer them helpful tools/content that address their challenges in exchange for their contact details.
SaaS marketing needs to be targeted, and most importantly, based on real insights from your buyers. Without these insights you're shooting in the dark, using a mix of tactics that aren't relevant.
For a full guide to implementing a converged inbound marketing strategy like the one I've just described, download my free 71-page eBook by filling in the form below.