Recent acquisitions have sparked a lot of interest in SaaS (software as a service) businesses, which license software on a subscription basis and offer central hosting. The uptick in interest is due, in no small part, to Microsoft’s purchase of LinkedIn.
While that scenario was rather unique, the new LinkedIn valuation will likely have an impact on future SaaS valuations, as well.
For many entrepreneurs, the sale of their business is the ultimate end goal. But, if you're one of them, and trying to get to that point, you'll have to prepare your business; you'll need an exit strategy.
And, before that can happen, you'll need to build a great product, get it out into the world and get people to adopt it.
Here are some suggestions for how to market your SaaS business and set yourself up for success.
1. Create a solution your target customer needs.
This is marketing 101: It all starts with the customer.
What problem does your SaaS software solve? How does it help end users? What does it enable them to do more efficiently or effectively?
You could spend a lot of time on conversion-rate optimization or A/B split testing, but none of that will make any difference if the offer isn’t right. Make sure you have something people want. The question you need to answer is: “How well do I know my customer?”
Whether you're scheduling social media posts, managing communication with customers or allowing for the sharing of files in the cloud, you have the opportunity to solve big problems and reduce bottlenecks with your app.
But, first you have to figure out whether the problem you’re creating a solution for is something people want. Do your market research.
2. Generate leads with content.
Many SaaS business owners can attest to the value of content marketing and the role it plays in attracting and generating leads. Targeting the right keywords will enable you to rank in search-engine results for relevant searches. Organic traffic tends to drive the most traffic for SaaS companies.
This process requires mapping out the customer journey and determining what top-funnel problems or pain points you can solve, with blog posts, podcast audio or videos.
You also need to be thinking in terms of emails, webinars and ebooks as the customer moves down the funnel. Offering the right content at the right time is key to content-marketing success. Just keep in mind that the sales cycle with a SaaS product tends to be pretty short.
Additionally, segment your database, based on interest. Some leads will need to be nurtured, as they won’t make a buying decision immediately.
You can also leverage SEO services to maximize the discoverability of your site in search engines.
3. Implement a referral or incentive program.
People don’t refer products and services to their friends without a good reason. Dropbox was famous for giving away free storage when you referred its service to a friend. This helped its app spread like wildfire.
With a well-thought-out and well-executed referral program, you can leverage your existing audience and get its members to spread the word about your app without your having to do all of the work.
But, you will need to think carefully about what users gain by sharing your app with their colleagues and friends. The wrong offer will either convert poorly or lead to major losses for your business.
Make your app easy to recommend. If it is well developed, and it solves a major pain point, your users will be more inclined to suggest it to people they know. Referral rewards will just be an added bonus.
4. Offer free trials.
One of the most widely used, accepted and effective strategies in the SaaS market is the free trial.
During the trial period, users often become hooked or even dependent upon the app. When they want to take advantage of additional functionality, or when their trial period ends, they’ll be more inclined to purchase a plan so they can continue to use your service.
“Free” can take many different forms, depending on the exact nature of your business. You may choose to have a preset trial period. You may set a limit on users or accounts that can be connected. You may limit the options or functionality available.
The key is to get your leads using the app so they can experience the benefits of it. If your app is the right offering, they will recognize this fact and become paid subscribers sooner rather than later.
Other free items -- like ebooks and white papers -- can also be a major selling point for your service.
5. Leverage embeds and “powered by . . . ” tags.
What if you could get your users to share your app on their blogs and websites? If your offering lends itself to embeds, this is not a far-fetched dream. Consider the example of Wistia, which allows you to upload videos and embed them on your website. Because of Wistia's unique and powerful feature-set, many users opt to display its banner right under their video embeds.
You could have your company banner linked up to an introductory video that talks about the value of your service. You could also offer a discount to users that click.
The “powered by . . . ” tag works in much the same way. Many survey apps use it to create awareness for their services. As more and more people see your service in use, some will become curious and want to check out and use your solution.
Does your particular service justify an embed or “powered by . . .” tag? Keep in mind that not all SaaS businesses will benefit from this strategy, and that even those that do use it usually remove the banners and tags when users purchase at premium levels. Evaluate your offering before implementing this approach.
The great part about a SaaS business is that a great service will practically sell itself, and you can continually drive new leads with content marketing and paid advertising.
This is why your marketing strategy needs to begin with your customers in mind. If they find value in your offering, they will refer and recommend it to colleagues and friends. The viral effect can generate a lot of business.