The Internet is almost fully integrated into our everyday lives.
We all consider it the “new normal” – except perhaps for the grumpy old men who spend their summers outdoors on folding chairs, yelling “get off of my lawn!” (No offense meant to grumpy old women or grumpy young people.)
The far-reaching effects of our connected world include the creation of many new industries. We may not know what they’re called, but they make our online lives easier and we take them for granted.
One of the most important is known as SaaS, which stands for Software as a Service. Even if you don’t know the name, you know the benefits.
A SaaS company provides the platform from which you download and use apps, with the processing and storage all handled in the cloud. Dropbox, Salesforce and Netflix are three common examples.
That’s why it’s called “Software as a Service.” Instead of buying programs and installing hard copies on your computer or device, you’re essentially buying or renting the use of the software. That’s the service that SaaS vendors provide.
Companies moving from direct sales to the SaaS industry quickly find that the marketing process is very different than the one they’re accustomed to. Here are five top guidelines that can minimize the learning curve.
1) Determine Your Target Audience and USP – and Stay True to Them
If you see thousands of people sitting an arena for a concert or sporting event, it’s natural to think about how much money you could make if just half of them bought your product.
That temptation is even greater if you think about the three billion people now estimated to be online. 3,000,000,000 people – what an enormous target audience for an online service!
Here’s the problem. Only a fraction of that arena crowd is really your target audience, and only a fraction of the three billion people on the Internet will be interested in your service.
Don’t give into the urge to market to that mass audience. Before doing anything else, determine your real target audience, the USP (unique selling point) that would appeal to potential customers, and the best way to reach them.
Only then should you develop a marketing program. And don’t be tempted by early success to expand your reach beyond your target audience. That’s a prescription for failure. Instead…
2) Create New Products or Value-Added Offerings
Growth is crucial for SaaS companies, but how do you achieve it once you’ve gained traction? There are two ways.
First, create add-on services that existing customers will find useful. It’s easier to convince existing users to pay a little more for a cool new feature that will meet more of their needs, than it is to find brand-new customers.
Second, most of those three billion people may not need your existing service, but many may want one that’s in the same general ballpark. Concentrate product development efforts on related services which are easy for you to deliver and can expand your customer base.
3) Keep Prospects Engaged
Most SaaS products aren’t impulse purchases. Prospects can easily compare competing services online, and attracting them to your platform is no guarantee that they’ll buy from you.
Continuing engagement is a major key to marketing your software service.
- Marketing your product on all available platforms with useful and interesting content will keep your product front of mind and keep potential customers engaged with your brand.
- A well-designed sales interface that clearly demonstrates the USP and walks the prospect through the signup process keeps them engaged until they buy.
- Continued interaction with customers via in-app messaging, emails or other methods encourages them to become personally invested in the service. That keeps them using the app and renewing the service month after month.
Speaking of renewing…
4) Be Realistic
The most profitable sales model involves recurring revenue generated by renewals. Not all customers will stay forever, though. Many won’t remain after a free or bargain trial period, and many more will quickly abandon the app or find an alternative they like better.
Blue sky projections on recurring numbers can be dangerous. Be as realistic as possible when making renewal and income projections, and regularly update those projections as you get data on how “sticky” your product is.
And if renewal rates are low, you’ve got a problem with either your product or sales process. Don’t wait for things to get better; fix the problem, or realize the service may not be as viable as you originally thought.
5) Test and Optimize, Rinse and Repeat
Most online businesses understand that testing, monitoring key metrics and optimization are integral to launching a product or platform. A common pitfall for SaaS businesses, however, is to be satisfied with “success” and turn all of their attention to new products or markets.
That ignores the fact that the market and the competition are constantly changing. You need to be constantly changing, too. Testing, monitoring and optimizing remain just as important as your app matures. Otherwise, an app that’s initially a “great success” can quickly become a brief mention or footnote on a Wikipedia page.