November 24, 2021

Marketing Funnels for SAAS Products: Why you need it and all you need to know about it

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What is a SAAS marketing funnel?

This is the journey that your customer takes through the sales process you have in place. 

The marketing funnel is there to help increase the chances that your lead will sign up for your product.

Leads ‘move’ through each stage of the funnel in what can best be described as a funnel – large at the top and narrow at the bottom.

The marketing funnel is therefore each phase of the sales cycle your leads pass through and advance to the next stage with the final stage being, signing up and/or becoming a customer.

At the top of the funnel may be the paid ad campaign that will help make people aware of your product/brand. After this, they may then enter into the next stage which will be them claiming the lead magnet that has attracted their attention. This can be an ebook, webinar, online video or anything that you are offering as value that will also help gain the trust of the lead.

The ‘lead magnet’ will then be followed by an email follow-up campaign that works on helping convince those who are not yet convinced to sign up for your product or service. 

The idea behind this is to keep reminding the lead about what brought them to your landing page in the first place and how you can help them solve whatever problem they are having. The email campaign can also be used to onboard clients who have signed up and help familiarize them with your product.

Each of these steps above is the lead moving through the funnel process.

A normal SAAS funnel variation will consist of the following steps that lead to purchase:

ATTENTION — INTEREST — DESIRE — ACTION 

Exactly how we described above, each of the steps works to move your lead through the funnel until the objective of purchase is achieved.

There is then the second part of the SAAS funnel that consists of:

ONBOARD — RETAIN — EXPAND

This is where you’ve signed up the client, how you work on retaining them as client and then expand on this to get more clients.

There is also a more detailed version that can also be applied to the SAAS model. 

This is:

AWARENESS — CONSIDERATION — INTENT — PURCHASE — LOYALTY — ADVOCACY

Each of the above steps works together leading one to the next to result in long-term client retention and even product advocacy!

Awareness: The people visiting your funnel at this stage has a lot of questions and seeking information. Perhaps they have not yet pinpointed their specific problem yet but in this stage, they are becoming aware of you and your product. Use this stage to increase your brand’s awareness so that people can become familiar with your brand.

Consideration: Once people enter this stage it means that they have clicked on something of yours and are interested in consuming more of your content. This stage shows that something has grabbed their interest and they are paying more attention to what you have to offer. 

Intent: If you have managed to get a lead to this stage it means that you have their attention and have likely won their trust also. This stage should then highlight the benefits of your product and warming them to buy it. Free trials usually form part of this stage to help them make the decision of being a paid user or not. 

Purchase: This is but one step in the funnel because it’s not only about selling to clients but rather about priming them to stay after they’ve bought.

Loyalty: Garnering loyalty from your customers will help you retain clients for the long term period which should be one of the main objectives. Keep in touch with them, ensure their needs are being met and give them a reason to choose you over another product with the same offering that might be cheaper.

Advocacy: Not only do you want loyal clients but you also want clients that advocate your product for you because they love it and want others to use it too. Keep your clients happy and always make them feel seen and understood for them to become unofficial brand ambassadors.

Example funnels for Saas products

What does a Sample Funnel blueprint Breakdown look like?

It generally starts with a FREE TRIAL optin that will involve the lead needing to sign up and try out the product. The page will be a simple landing page that explains the free trial/offer and asks the lead to enter their details (name, email) to proceed to the free trial.

As they click through, they can be directed to an upsell which will talk to them about signing up for the product right away. Usually in this step, a special offer or discount is given if the lead takes them up on the sign up right away. 

Upon purchase, the client will then be directed to their onboarding process and their client journey begins. 

If they don’t sign up for the product through the upsell page, an email campaign can be triggered to work on convincing the lead to the product and eventually they then proceed to sign up.

What’s important to remember is that the above is simply an example of a funnel.

What you choose to offer as a lead magnet is completely dependent on your product.

CLICKFUNNELS EXAMPLE:

See the above example of CLICKFUNNELS. 

Their approach is simple. 

You are offered 14 days to trial the software out before you choose from one of their membership packages which means that if you make use of the software properly in the allocated time, clients are offered a chance to monetize their business at no cost.

This way, the client gets to sign up at no cost to them, try the software out and get the hang of it while seeing just how instrumental it can be for them in just enough time for them to want to carry on once the free trial comes to an end. 

On the other hand, should the person not sign up, they’re still a lead which is qualified. If they do not proceed to sign up after the trial, the retargeting email campaign will then start and communicate with them why they should be signing up.

So at the very worst, this approach is a way to build your leads who you know are interested enough in the product but may just need a little more convincing.

WEBINARJAM EXAMPLE

Webinar Jam is another example of an additional lead magnet being used to get people to sign up for their $1 trial. 

By getting people interested in the product through an ebook, it is showing that they are providing value to the client before they have to do anything.

When the client signs up and shows their interest in the product, the $1 trial is introduced as a ‘special deal’ that people can use to take advantage of for a limited time.

The low trial fee is something that most people will not see as a huge spend which can make it easier for them to pay to try it out and in turn they are then qualified as a good lead.

How to tell if it’s working

Firstly, you will be able to see the number of sales you are bringing in but more than this you will need to define a set of key performance indicators that you will then track accordingly. These are also known as KPIs.

The KPIs will give you an indication if there are any issues within your funnel or if you seem to be losing people after a certain point in the funnel.

The KPIs are there to guide you and help you make the necessary changes to turn your funnel into a successful one.

A KPI you may be familiar with is known as the CAC (Customer Acquisition Cost) – 

The CAC is calculated by dividing the total sales & marketing by the total number of customers gained. The result is how much it costs per client. CAC is used to figure out your return on investment in exchange for your marketing costs. 

If you want to reduce the CAC, you can try to improve your lead conversion rate or your marketing spend.

Another KPI is Customer Lifetime Value (CLV) and helps you find the balance between spending resources and how you retain those clients. It’s different to CAC because it helps you retain clients well over the long term.

Calculate the CLV by removing the CAC from your total customer revenue in a set period of time. 

Some more KPIs you may want to keep in mind are known as Monthly Recurring Revenue, Customer Retention Rate, Revenue Growth, and Customer Churn. 

MRR tells you how well your business is performing on a monthly basis and is calculated by taking your Average Revenue Per Account (ARPA) multiplying it by your total number of customers. To get an idea of how much your customer base can grow each month, this calculation is helpful.

CRR covers how many clients you have been able to keep in the process.

To calculate it, you need to:

Work out how many clients you have at the end of a given period (week, month, etc), subtract the number of new clients you’ve acquired over that time, divide it by the number of customers you had at the beginning of that period and multiply it by 100.

RG (Revenue Growth) is one of the most important metrics because it shows you the sustainability and profitability of your business. 

To calculate it, do this: (Second Month Revenue – First Month Revenue) / First Month Revenue * 100 = % Revenue Growth Rate

CC (Customer churn) is about working out how many people left your product over a certain period. Calculate this by doing this: Customer Churn rate = Number of churned users / Total number of users

Ways to optimize SAAS marketing 

  1. Make sure your upsell adds value for the client

The whole point of the upsell is to make sure people buy your product. This means that the client needs to feel like they are gaining something by buying the upsell from the page itself. 

Always make sure that the upsell is different to whatever the ‘normal’ offer may be. This can be in the form of a discount, a bundle offer, or anything that you can offer clients that makes them feel they have gotten value from taking you up on your offer. 

  1. Why sales copy is critical

It goes without saying that your sales copy is one of the most important parts in this whole process. 

Be sure to make the copy communicate clearly what your offer is, why it matters to the client and why they need to take you up on it.

Be sure to press on pain points too as a reminder.

  1. Use multi-channels to talk to your clients

The best way to connect with clients is to meet them where they are and this does not mean only in one place. Maybe you will email them one day, then chat with them across social media or even go directly to their phone via WhatsApp or message. 

The point is that the more channels you are using to communicate with them effectively the better you can optimise your funnels and marketing approach. 

  1. Keep your funnels simple

Avoid over complicated funnels that you think will help the onboarding process. The best way is to keep things simple. 

Imagine what you would want in the place of the client and keep it along those lines. Identify the problem and talk to them about how you are going to help them fix that problem. If you are going to make their life simpler, then show them how.

Not only does a complicated funnel make things harder for your leads and may put them off altogether but it may also make it harder for you to manage it.

Make sure the moving parts always work how they should and then elaborate on this based on how it performs. 

And most importantly, always test your funnel before it goes live. Get fresh eyes to move through the funnel process and identify any issues that may hamper clients from going through the funnel successfully.

  1. Track your funnels with pixels

Pixels are the only way you can see exactly how your leads converted if they converted, where they came from, and the general tracking that enables you to retarget leads that may not have converted the first time around.


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