Pretty hard if the results of our 2021 SaaS marketing survey are anything to go by!
Responses to the question ‘how effective is your customer acquisition engine?’ showed fewer organisations ranking themselves at the top of the scorecard (14% versus 26% in the 2020 survey). This represents a drop of three places down to sixth spot, making it the joint worst scoring category in the survey.
Acquiring customers is arguably one of the hardest parts of growing any business and it’s pretty much guaranteed that all SaaS companies, at some point, will struggle.
So, it’s a real business problem and one that is easily understood – it’s the process of gaining new customers by persuading prospects to buy your solution and become your customer. Sounds easy enough, doesn’t it?
Research tells us the probability of selling to an existing customer is 60-70%, while the probability of selling to a new prospect is only 5% to 20%. We’re also cheerfully reminded it costs up to 7x more to acquire a new customer than to retain an old one. Finally, from the same research, statistics indicate a 5% increase in customer retention increases profits by 25% – 95%.
But to sell more to existing customers you’ve got to acquire some customers in the first place, so somewhere you’ve got to do the hard yards.
Framing the problem
If you can’t find a way to get new prospects into the top of your funnel, it doesn’t matter how good your SaaS product or solution is, you simply won’t have a business. Harsh, but true.
There are 3 fundamental elements to successful customer acquisition:
- Having a clear and compelling value position > understand your WHY.
- Prospects buy products that provide them with some utility or value, and from companies that align with their own values.
- This might not just be functional value, but emotional value.
- Why they buy is your value proposition. If you haven’t got this right, you’ll never achieve the goal.
- A brand promise that resonates and differentiates.
- You must stand out from your competition and to do this you need to understand who you compete against.
- Ask yourself what products or services could be substituted to solve the same problem.
- If you don’t believe you have any competition, the problem your products solve might not be real.
- And lastly, having access to a group of people with the problem you solve.
- Ensure you get feedback from the market – they should be telling you have these elements covered.
And now we can talk campaigns
In our experience, there are four key elements often forgotten in acquisition campaigns:
- A great website page that’s easy to use – simply put, good campaigns have a landing page. The more landing pages the better.
- A strategy to get the right people to your website – identifying the segment of people who have a higher propensity to purchase from you, identifying who these people are and where they go will help you target them more effectively.
- A way to get people to reveal their identity – gated content is the primary mechanism here.
- A plan for keeping in touch if they don’t buy – nurture the relationship.
Our top tips for creating a great acquisition campaign are:
- People need to fall in love with you
- They need to have an emotional reaction
- It needs to be consistent, relevant, timely and engaging
- You need to be creative
Marketing can do great things, but it can’t work magic so stay realistic about what you need to achieve and whether you can achieve it.
So if those are the fundamentals, what about the nuances?
To make sense of SaaS customer acquisition it’s worth taking a step back and trying to set some realistic goals for your campaigns. Start by asking some basic questions:
- How many more customers do I need to make my numbers?
- Do I have the resources to onboard that amount of customers?
- Over what timeframe?
- At what cost?
- At what conversion rate?
Have you got the numbers?
Do you understand whether you can actually achieve this number as a business? And by business, we mean the team effort it will take to do this!
And another couple of things to ask yourselves:
- Do you know what your current CAC (cost of customer acquisition) is?
- Will increasing your run rate change this?
- Simply put, can you convert enough customers?
Keep a cool head, tweak and test as you go and if you need clarity or guidance with anything, seek the support of experts.
And there’s more…
This is the third blog in our series which dives a little deeper into the marketing pillars in our 2021 SaaS Marketing Survey. Read the previous blogs: