5 common marketing mistakes to avoid in the SaaS world
The fast-growing popularity of subscription business products among corporate and private consumers has opened the door for tech-savvy entrepreneurs. However, in a world where consumers are increasingly tech-savvy and capable of performing extensive, independent research on brands, there’s little room for error in your marketing.
From the overspend on customer acquisition that can quickly sink a SaaS company to excluding some of the most critical information from your company website, we’ve curated some thoughts on the most devastating and common marketing issues in the industry:
1. Underestimating Cost-of-Customer-Acquisition
Due to the exploding popularity of SaaS solutions among consumers, marketing a product is much more difficult than it was several years ago. According to Mike Sweeney, due to increased competition in the subscription business industry, companies need a holistic strategy that allows them to acquire new revenue at a cost that does not exceed customer lifetime value.
Be realistic about your metrics, and ensure your budget includes an allocation of funds towards customer retention. It’s the only way to ensure you remain above water.
2. A Lack of Clear Pricing Information
97% of consumers research products and services online before making a purchase, typically using an average of 7.9 media sources to gather information before making a decision.
If the information available on your website isn’t clear, concise and comprehensive, your prospects may be considering purchasing from your competitors instead. Writes SaaS enthusiast Dennis Howlett, including clear insight on your pricing structure isn’t just a best practice, it’s “de rigeur in today’s market. Instant #fail.”
3. Not Allocating Enough Resources
The dangers of high cost-of-customer acquisition are no secret in the subscription business industry. SaaS marketing strategist Peter Cohen believes that far too many companies are headed in the other direction and investing too little in their sales and marketing, a concept he refers to as “bailing with a teacup.” SaaS marketing is expensive, and connecting with prospects takes time and resources.
It’s why many of the most-successful subscription business companies have such a high marketing spend, including 54% of total budget annually by Salesforce.
4. Not Aligning Sales and Marketing
Sales and marketing alignment, a concept known as SMarketing, can transform your subscription business’ efforts to acquire customers. Ensure your marketers and sales agents are on the same page, and you’re addressing frequently-asked customer questions in your content marketing.
A lack of synergy between these key areas is often a point of failure for providers.
5. Underestimating Marketing Automation and Lead Nurturing
Even if your company’s website is a lean, lead-capturing machine, your marketing dollars will be wasted if you’re not able to effectively qualify leads and nurture hot prospects into customers.
Sweeney writes that without a formal system in place to connect with your prospects over time, your marketing spend will be entirely wasted. Your lead nurturing efforts don’t need to be complex, but they should align with your business’ sales cycle.
These are the 5 common marketing mistakes made in SaaS. Did we miss anything else which should be on the top 5 list? If so, let us know through the comment section below.