Article.

Selling SaaS

A SaaS B2B Marketing Playbook.

A SaaS B2B marketing strategy is a different animal. In fact, it’s basically the inverse of a traditional enterprise software selling model. With SaaS, your entry point into the company is different, your price points are different, and your switching costs are different.

If looked at from the executive perspective, your allocation of expenses to support the sale are completely upside down. In the SaaS model, you don’t need as much pre-sale engineering to close a business. The buy is less—a lot of these start with credit cards, so there’s no need to navigate purchase orders or rigid corporate guidelines. Pre-sales are minimized.

On the other hand, with SaaS, the switching costs are extremely low, so churn is a huge factor. While customer acquisition is a key metric; lifetime value in churn becomes even more important. So you need the customer success and product support teams to make sure they get the most out of the product—every single month. 

The requirement is to be maniacally focused on the following question: “Is the customer getting the most value out of the product?” The level of post-sale effort and engagement increases inversely with the ticket—the lower the ticket size, the more time you have to invest in the back end to make sure this question is answered with a “yes.”

Marketing guru Gary Vaynerchuk famously said, “Every company is a media company.” With SaaS, that’s especially true. To keep churn in line, you have to develop a sophisticated marketing communication cycle, highly targeted, and delivered consistently. Just like a publisher would.

So what does this look like?

 

Think like the customer

Like any good marketing strategy, SaaS strategies start with understanding customer pain points. This sounds obvious, but companies commonly lead with a product instead of a problem. Peter Van Deventer, CEO of Muddy Gecko, a fractional marketing firm, has developed SaaS marketing strategies for Intel, Micron, Dell and others, and notes that “the biggest mistake companies make is talking about themselves instead of the customer problem. Because the product teams are so deeply involved with design and positioning, because the product focus is so deeply ingrained, they fail to really understand the customer’s problem.”

Much of this perspective can be accomplished through market research. While you may have a great product that solves a market need, the deeper you can understand the nuances of exactly what the customer is feeling, the better.

And this is not one size fits all—If people are not using the product, they're not going to renew. And if they’re not using the product, you need to communicate differently to them than those who are.

 

Segmentation

To do that, you need to—as narrowly as possible—understand exactly who you are trying to talk to.

Open View Partners
, a venture capital firm that specializes in product-led growth, identifies six standard segmentation schemes that could be applied to your customer segmentation research:

  • Geographic base/reach
  • Industry/sub-industry/ industry served/customer served
  • Product class/product usage
  • Organization size (measured by revenue, number of employees, etc.)
  • Product delivery model/product or packaging format/special technology/process methodology
  • Special use/needs

These are only examples, and you’re likely to employ a combination of them. And most importantly, on the back end, segmentation needs to be closely tied to usage behavior. Which means that measurement is key: Someone that is not engaging with your product is not going to renew and you need to notice that before the 11th hour.

 

Content marketing

Once you know who you’re talking to, you have to say the right things. This “nurture” is a consistent, well thought-through communication string, where you are offering new ideas and valuable content to engage your customers at a deeper level. A successful conversation enables potential upsell—and referral. If the content is relevant enough, they will share it.

Since these relationships are built around a monthly service, it’s critical to position your company as a thought leader, a trusted guide throughout the duration of the relationship. That means content marketing: while your strategy will include emails, paid search, social posts, and landing pages, the core should be rich, relevant content in the form of blogs, ebooks and white papers. No one wants to be sold to. The key to this conversation is to offer thought leadership that informs, and helps the customer make better decisions.


Value Engineering


Stephen Morse
, Vice President WW Field Engineering at Algolia, explains that SaaS marketing strategies should be looked at through a lens of value engineering: “Value engineering is one of the most important practices to have converged with sales engineering in the modern technology era. In its transition and application to on-premise and SaaS software presales, it has been particularly powerful because it enriches the most important part of the SE technology selling process; the value proposition.” 

MetaCX, which focuses on customer lifecycle, defines value engineering as “the systematic method of building and proving strong business cases for the purchase and renewal of software and digital products.” In a recent study, they found that more than half of companies surveyed were employing some form of value engineering: “Respondents say these teams make a substantial difference in the perception of sales methodology impact with a 13-point difference in reported effectiveness when a formalized value engineering team exists.”

Value engineering means building a marketing campaign framework that understands that while less may be required in presales, building a robust publishing platform is critical to B2B SaaS revenue success.

About the Author

Steven Horwitz is an Orchid Black Co-Founding Managing Partner. He is a performance-driven strategist with over 30 years of executive leadership and venture capital consulting experience across software and technology-enabled service organizations. As a high-energy, hands-on leader with exceptional critical thinking and creative problem-solving skills, he’s got a strong record of accomplishment of building and inspiring high-performance teams to solve complex organizational challenges. Steven’s strength spans high growth environments and turnaround situations ranging from an early stage, venture-backed software startups through Fortune 100 companies.

Steven can be reached at sh@orchid.black.