Every B2B SaaS business needs demand for its solution in order to grow and reach scale.
The most successful SaaS companies don't just invest in sporadic marketing campaigns or the latest outbound sales gizmo.
They do something different. They build a scalable demand generation engine, which consistently generates new qualified sales opportunities every single quarter.
Read on to learn what demand generation is, and how to build your own scalable B2B SaaS demand generation engine.
What is B2B SaaS Demand Generation?
B2B SaaS demand generation encompasses all stages of the customer journey. It starts off by raising awareness of the problems and challenges your SaaS solution can solve, and then your software's distinctive value proposition. Through targeted marketing efforts, you spark interest and capture the attention of potential customers.
Once you've captured the interest of a potential customer, the next step is to nurture these leads and establish trust. This involves delivering valuable content, such as blog posts, case studies, whitepapers, and webinars, that educate and help prospects to solve the challenges they face. Throughout this process you collect information about the buyer, and send lead nurturing emails to help keep them engaged.
An effective demand generation engine acknowledges that any individual buyer is either in or out of the market. A buyer isn't always ready to buy, and you have to keep prospects engaged over time to maximise your results. The buyers' journey isn't usually just a straightforward top-to-bottom trip through a sales funnel. Through consistent education and trust-building, demand generation strategies ultimately convert leads into paying customers.
The role of demand generation doesn't conclude with acquiring new customers, either. It also extends to customer retention and expansion. By consistently engaging with existing customers and providing exceptional customer support, you enhance their satisfaction and motivate them to become advocates for your SaaS solution, building further demand.
An Example of a B2B SaaS Demand Engine
How to Build a B2B SaaS Demand Engine
Develop Your Ideal Customer Profile and Buyer Personas
To build a successful B2B SaaS demand engine, it's important that you understand both your Ideal Customer Profile (the types of companies you're targeting with your demand generation strategy) and your Buyer Personas (the profiles of the people who work at the companies you're targeting with your demand strategy).
Ideal Customer Profile (ICP)
Ideal Customer Profiles are useful for qualifying your leads. When you have a good template for an ICP, you can more quickly answer the question: is this company really likely to purchase from us?
If a particular marketing channel is generating lots of leads where the answer is "no", then you need to make changes so that your engine performs better. Leads which are a long way from your ICP waste the time of everyone from your Sales reps, to the poor Customer Success rep in charge of a potential account which is a really bad fit for your software.
The easiest way to develop your ICP is by looking at your existing customers (if you have them). Answer the questions: which customers have the greatest lifetime value? Which customers upgrade or renew with the least friction? Which customers score highest in NPS and CSAT surveys?
From this, you can then identify trends in the customers which score highly:
- Where are they based? - Are there certain regions of the country or world which tend to produce higher value accounts for you?
- How many employees do they have? - Do you notice that your best customers sit within a particular employee range? E.g. 10-50 employees, for example?
- Annual Revenue - Do your best customers tend to fall within a particular annual revenue range? E.g. $10 to $25m per year.
- What industry are they in? - Do you notice that manufacturers for example are much more likely to have a higher lifetime value than a professional service company?
- What are their biggest challenges? - What problems and challenges do your Ideal Customers tend to face before they become customers of yours?
- Existing technology - Are customers who already have particular software installed likely to be much better customers than other companies? This is particularly relevant when your software is dependent on integrations with third party software.
You may notice other trends or themes which group your ICP too. Of particular value are traits which you can target easily with your growth campaigns. It's worth exploring LinkedIn ad targeting (as an example) to see what Customer Profile elements you could target with an advertising campaign, and thinking about how each of those elements fit into your ICP.
Your ICP shouldn't be tens of pages long. The document you produce for your profile should usually fit onto a single page, so it can be used easily by everyone involved in your demand engine's operation.
If you don't yet have many customers, you'll need to build something based on insights you get from your personal experience of the types of customer you're building your product for. Make assumptions, and as your demand engine begins to produce new business, make sure you constantly test those assumptions. It's not uncommon to discover that your Ideal Customer Profile (ICP) is actually quite different to what you believed it would be when you start out.
Buyer Personas
Buyer Personas by contrast are semi-fictional representations of the people your company engages at the companies you want to buy your SaaS solution. Within the buyer's journey, there are usually multiple people involved in a purchase decision.
For example, if you're selling CRM software, you might need to engage sales reps, a VP of sales and an IT employee during a typical customer journey. We recommend keeping these light like your ICP, so that they actually get used. That means no more than a couple of pages for each buyer persona you develop.
Identify the most important people within the buyers' journey for your ICP, and create a fictional persona for each. The best way to develop Buyer Personas is to interview existing customers.
Developing buyer personas is a bit more involved than your ICP, as you need to go into more granular detail to create personas which are effective.
To develop your buyer personas, we highly recommend following HubSpot's eGuide and free template pack available as a free download here. It contains templates you can use for creating your buyer personas, as well as a process you can follow for developing them.
Set Clear Goals
For your B2B SaaS demand machine to produce effective results, you'll need to set goals as an input first. We recommend starting with lead generation goals initially, and then progressing further down the funnel to setting qualified opportunity and revenue targets later as your machine becomes established and you benchmark conversion rates throughout the entire buyers' journey.
If you don't already have a demand engine in place, it's very difficult to set revenue goals out of the gate. It takes time to tweak your engine and optimise everything so that you can set realistic revenue acquisition targets each quarter.
Initially, for example, you might set a target of generating at least X leads which fit your ICP.
Choose The Right Channels
With your ICP, buyer personas and goals in hand, it's time to think about channels which are relevant to them. In our experience the most successful SaaS companies have:
- Pay Per Click campaigns - once you understand your Buyer Personas, Pay Per Click campaigns are an effective scalable way to target prospective buyers with your lead capture offers, like whitepapers/eGuides and webinars. The great thing about Pay Per Click is that it scales with your ad spend, and drives traffic instantly. PPC Campaigns can also be modified quickly based on what you learn.
- Integrations with other relevant products - these are a great way of generating cost-effective co-marketing opportunities, where you can capitalise on the brand plus traffic of the product you're integrating with.
- Well developed owned media - which drives substantial organic search traffic, in particular usually via a blog. It typically takes 6-12 months of consistent quality blogging and promotion of your content to really move the needle, but once established your owned media can deliver large volumes of business without requiring you to scale up your spending like with Pay Per Click campaigns.
- A reputation for thought leadership - the best SaaS companies aren't known for the volumes of content they churn out, but its quality. Thought leadership content and content which shines a new angle or goes into a new level of depth for a topic tends to be the "low hanging fruit" of organic search traffic: it naturally attracts links, and grows over time.
- High quality lead capture offers - think webinars, eGuides, whitepapers. They invest time and resources in doing these offers properly, so that prospects are pleased they signed up.
- Lead nurturing email sequences - when someone attends a webinar, downloads a whitepaper, or becomes a "closed lost" lead from sales, smart SaaS companies automatically enroll their leads in automated email workflows which educate them over time, so that when they're ready to consider a purchase, they consider your solution first.
- Re-targeting ads - these are ads which re-target visitors who leave your website, encouraging them to engage with your lead capture offers. Platforms like AdRoll allow you to create these re-targeting campaigns across multiple different channels at once so you can be everywhere your visitors are.
- A PR Strategy - PR helps you with developing your earned media: within this we include everything from guest posts on other highly trafficked blogs to your founder securing interviews/panels at relevant industry conferences.
Use Appropriate Marketing Automation Tools
A B2B SaaS demand generation engine doesn't work without marketing automation software. You need the right tools for your engine to work: so that you can send perfectly timed emails to your free trial users, or convert the visitor just about to leave your website's pricing page into a known contact.
We've published a guide to marketing automation software tools for SaaS companies. It's a lengthy read, but compares the best platforms as of 2024 for you.
Click here to read our comparison now (opens in a new window).
Spoiler: our #1 recommendation is HubSpot, but there are other contenders depending on your use-case, company stage and budget.
Ensure You Have a Single "Source of Truth" for Your Contacts
A big mistake we see SaaS companies make with their demand generation engines all the time is that they lose a single "source of truth" for their contacts. They end up with lots of different applications, and data stored about the customer in lots of different places in a fragmented way.
For your demand engine to work at its best, it's essential that you have some form of Customer Data Platform or CRM which serves as that central source of truth for a contact. The software that serves as your central "source of truth" should be integrated with all of your other software which contains information about your customers, so that when someone opens a contact record within your software they can see everything in one place: from website visits, to webinars they attended, their free trial activity, support tickets, renewals, upgrades... the whole lot.
The more information you have centralised about your contacts, the better you can optimise your demand generation strategy for customers at all stages of the customer journey from first becoming aware of your company to renewing, upgrading and recommending your product to their peers.
Getting this right will help you maximise your Average Revenue Per User more than a lot of other advice out there!
Continually Measure Your Success
As time passes, what works changes. What's best for driving organic search traffic in 2024 won't necessarily be what's best by 2030. This is often especially true for Paid Channels, where the messaging from others targeting the same audiences as you will impact on your numbers, and over time as your own ads are seen by as much of your target audiences as possible, you'll find there's some decay in performance.
It's important to measure your success not just at the top of the funnel, but all the way down funnel through to Sales Opportunities and Revenue generated by your demand generation efforts.
Schedule a monthly review session of your ads at the very least, and pay attention to metrics like your Quick Ratio to ensure that revenue growth is healthy. Segmenting your Quick Ratio as you scale up growth can be particularly helpful for clearly identifying your best and worst performing channels.
For example, you may identify that if you segment your users by channel, that you have a higher Quick Ratio among your Organic Search customers to PPC customers. You can use software like Baremetrics for this purpose.
Never stop learning, and don't just look at those top of the funnel metrics once you get deeper into a campaign and have the data to explore.
Optimise, Improve and Add New Channels
As you continually collect data and make new findings about what's successful within your demand generation engine, you need to improve and simultaneously find new channels so that you can grow.
Initially, it's often best to focus on 1-2 core channels and dial them in until you have a predictable Customer Acquisition Cost for those channels and something which scales reasonably well.
Once you notice that Customer Acquisition Costs start to grow again and there aren't economies of scale from adding more resources into the particular channel you're already generating new business from, it's time to add something new.