How To Do Email Marketing For SaaS Businesses
According to a statistics report by HubSpot, email marketing can generate a return on investment (ROI) of up to 4,200%.
Imagine that. For every dollar you spend on it, you earn $42.
That just goes to show how effective email marketing is, especially for SaaS businesses.
But what exactly is email marketing?
Email marketing is a form of digital marketing that uses email as a means of communicating with your target audience.
One of the great things about it is that you can use it for various purposes. You can use it to acquire new customers, retain your existing ones, and win back those who canceled their subscription to your SaaS product.
But doing email marketing right is no easy task. You need to know how to craft the perfect email, build a targeted list of recipients, and more.
In this article, we’ll share with you some necessary steps on how to do email marketing for SaaS businesses.
1) Set Your Goals
Before you start crafting your email marketing strategy, you need to have a clear idea of what you want to achieve with it.
This will dictate everything about your email marketing campaign, from the target audience, to the email content, and to the key performance indicators (KPIs).
Here are some goals you can set for your email marketing campaign:
Building Brand Awareness
If you’re a new SaaS business, then one of your goals should be to build awareness for your brand.
If you look at the SaaS sales funnel, you can do this at the earlier stages at the top of the funnel (TOFU).
Sure, content marketing may be king in this area, but don’t count email marketing out just yet.
If you’re using email to build brand awareness, you have to focus on providing value to your recipients rather than advertising your SaaS product.
You can do this by sending them educational content, usually in the form of newsletters. It could include informative content like tips and tricks related to your niche or industry.
Once you’ve made a good impression with your target audience and gained their trust, you can try to have them sign up for another email campaign with a different goal.
This is one of the most common uses for email marketing.
Lead nurturing is the process of developing relationships with your leads, even if they’re not yet ready to buy.
Looking at the SaaS customer journey, lead nurturing emails would be for potential customers who are already in the middle of the funnel (MOFU) stages.
They already know about your SaaS product and have shown some degree of interest in buying it, but they’re not quite sure about it.
The goal here is to build trust and credibility so that when they are finally ready to make a purchase, they’ll think of your SaaS product first.
To do this, you need to send them emails that provide valuable information that can help them in their journey. It could be helpful resources, case studies, ebooks, etc.
Social proof and user-generated content can also work wonders in this area.
Customer Retention & Engagement
The next goal on our list is customer retention or engagement.
Emails for a customer retention campaign would be targeted to your existing customers. Your goal here is to keep them engaged with your product so they don’t churn.
If you’re not familiar with that word yet, “churn” refers to when a customer cancels their subscription to your SaaS product.
No SaaS business wants that.
To prevent it from happening, you need to keep your customers engaged with your product. And regularly communicating with them through email is a great way to do that.
You can use it to send them updates about new features, helpful guides on how they can get the most out of your product, or even just give them a personal update on what’s going on in your company.
You can also use email marketing to expand your revenue from your current users. This could be in the form of upselling or cross-selling.
Emails for a revenue expansion campaign would be sent to your existing customers who are already using your product.
Your goal is to get them to upgrade to a higher tier or buy additional products/services that you offer.
To do this, you need to show them the value of upgrading or buying more. You can do this by sending them case studies, success stories, ROI calculators, etc.
But be careful not to do this too aggressively or you risk turning them off and damaging the relationship.
Pro tip: You can measure your customers’ readiness for an upgrade by monitoring their SaaS engagement metrics.
If their usage of your SaaS solution is nearing the limitations of the subscription plan they’re in, they may be more ready for the next tier.
2) Define Your Target Audience
The next step is to identify your target audience.
This is important because you need to know who you’re sending your emails to. This will determine what topics to write about and what tone of voice to use.
So how do you define your target audience?
Here are some steps you can follow:
Identify The Characteristics Of Your Current Customers & Leads
The first step is to look at your current customers and leads.
What characteristics do they have in common?
Some common characteristics could be:
- Demographic factors: age, gender, income level, etc.
- Marketing engagement: website visits, social media engagement, etc.
- Buying-oriented behaviors: scheduling a demo, requesting a quote, etc.
This will give you a good starting point for identifying other potential customers who have similar characteristics.
Identify Your Current Market’s Pain Points
The next step is to look at your current market and identify its pain points. For this step, you may need to launch surveys or hold focus groups to get the information that you need.
You can ask various questions here. But the most important thing here is to ask what problems they have that your SaaS product can solve.
Some general pain points could be:
- Financial difficulty: They’re struggling to make ends meet.
- Lack of time: They don’t have enough hours in the day to get everything done.
- Inefficiency: They’re wasting a lot of time and resources on tasks that could be automated.
- Steep learning curve: They’re having a hard time understanding how to use their current or previous SaaS tools.
- Poor user experience: They’re not happy with the interface or design of their current or previous SaaS tools.
Once you’ve identified their pain points, you would know how your SaaS solution can solve those problems. Consequently, your email messaging can focus on how your SaaS product can best address those needs.
3) Decide What Type of Emails You’re Going to Send
Now that you know who your target audience is, it’s time to decide what type of emails you’re going to send them.
There are four main types of email marketing campaigns: newsletter, customer acquisition, customer retention, and promotional emails.
Let’s talk about them one by one.
A newsletter email is a type of email that contains timely information about your company or industry. It’s usually sent on a regular basis, like monthly or quarterly.
As we discussed earlier, newsletters can be a great tool to build brand awareness and trust with your target audience.
Customer Acquisition Email
A customer acquisition email is an email sent to someone who doesn’t yet use your product but could be a good fit for it.
The goal of a customer acquisition email is to get the recipient interested in your product so they eventually become a paying customer.
Customer Retention Email
A customer retention email is an email sent to someone who already uses your product.
The goal of a customer retention email is to keep the recipient engaged with your product so they don’t churn.
A promotional email is an email that promotes a special offer, discount, or sale.
Promotional emails are generally sent to people who are already customers or have shown an interest in your product.
4) Create An Emailing & Follow-Up Schedule
Once you know what type of emails you’re going to send, it’s time to create an emailing schedule.
This is important because you don’t want to overwhelm your subscribers with too many emails or send them too far apart.
A good rule of thumb is to start with one email per week and then increase the frequency if you see engagement is high.
You should also have a follow-up plan for each email you send.
This could be in the form of a discount code for people who didn’t purchase after clicking through your email. Or a follow-up call for people who showed interest but didn’t buy.
5) Choose The Right Email Marketing Tool
There are a lot of different email marketing service providers out there. It’s just a matter of choosing which one is the best for your email marketing goals and campaigns.
The right email marketing software for you will depend on your needs and budget.
Here are some of the most popular email marketing software you can choose from:
- Campaign Monitor
- Constant Contact
6) Build Your Email List
If you have everything else in place, it’s time to start building your email list.
Now, let me emphasize here that you need to build your own email list. Outbound marketing or cold emailing methods typically involve buying leads from a database.
But that’s not what we’re doing here.
Buying an email list is not recommended because you don’t know if the people on that list actually want to receive marketing emails from you.
This is in contrast to the organic way of building your own email list, which is by getting people to sign up on their own.
There are a few different ways you can do this:
Add A Signup Form To Your Website
The first and most obvious way is to add a signup form to your website. This could be in the form of a pop-up, sidebar widget, or dedicated page.
The key here is to make the signup process as easy as possible. The fewer steps there are, the more likely people are to sign up.
What’s more, don’t ask for too much information. If all you need are their names and email addresses, just ask those.
If you really need to, you can still ask for some information that can help with segmentation. But in general, the simpler the signup process, the better.
Use A Lead Magnet
A lead magnet is an incentive you offer people in exchange for their email addresses.
It could be a free ebook, report, video course, or anything else that’s valuable to your target audience.
The key here is to make sure your lead magnet is actually valuable and relevant to your target audience. If it’s not, people will see right through it and won’t sign up.
One strategic way to use lead magnets is to offer them as content upgrades. These are additional content pieces that you offer along with your regular content.
For example, let’s say you have a blog post about improving your social media engagement. At the end of the article, you could offer a full-blown ebook about social media marketing in exchange for them signing up for your email list.
This is effective because the people who are reading your article are already interested in the topic. So, they’re more likely to sign up for your lead magnet as well.
Run A Contest Or Giveaway
Running a contest or giveaway is another great way to get people to sign up for your email list
People love free stuff, so this is an easy way to get them to sign up. Just make sure your prize is relevant to your target audience.
And, of course, make sure you follow the rules and regulations around running contests and giveaways in your country or region.
7) Segment Your Email Lists
One of the most important things you can do with your email list is to segment it.
Segmenting your email list means dividing it up into smaller groups based on certain criteria.
You can do this by categorizing them based on demographic, psychographic, and (for B2B audiences) firmographic factors.
These are the most commonly used factors in audience segmentation. They may include the following:
- Education level
Psychographic factors are those related to lifestyle and personality. Examples of psychographic factors include the following:
Firmographic factors are used to segment business audiences. They include factors like:
- Company size
- Job title
8) Design Your Email Workflow
If you have already segmented your email list, then it’s time to start designing your workflow.
An email workflow is the series of emails that someone will receive after they sign up for your email list.
Ideally, your workflow should be designed to nurture leads and move them further down your sales funnel.
The number of marketing emails in your workflow will depend on a few factors, including the type of email marketing campaign you’re doing.
For example, here’s a simple email workflow:
- Start event: Potential customer signs up for email
- Email 1: Welcome Email
- Email 2: Follow Up #1
- Email 3: Follow Up #2
You can also have branching and more complex email workflows that depend on your email subscriber’s behavior.
For example, imagine an email subscriber clicking on a call-to-action (CTA) to talk to your sales team. That would prompt your team to reach out to them and start a sales conversation.
However, if the email subscriber doesn’t click on the CTA, they would receive more follow-up lead nurturing emails.
9) Decide Which Email Marketing Automation Methods You Are Going To Use
There are different types of email automation you can use in your campaign. The most common ones are the following:
Triggered automation is set up to send emails based on certain events or actions. You could set them up as email autoresponders.
The most common type of triggered automation is the welcome email, which is sent after someone subscribes to your email list.
Other examples of triggered automation include abandoned cart emails and order confirmation emails.
Drip Email Campaigns
Drip campaigns are a series of pre-written marketing emails that are automatically sent at intervals until you reach your goal.
You can use drip email campaigns for various purposes too. Among these purposes are lead nurturing, cart abandonment, and reactivation.
Let’s have an example of a lead nurturing email drip:
- Email 1: Introduction to your SaaS product
- Email 2: Detailed tour of your SaaS solution and its features
- Email 3: Comparison between your SaaS product and your competitors
- Email 4: Free trial offer
- Email 5: Asking for feedback about the free trial
The important thing about drip email campaigns is for each email to build up on the previous one.
What’s more, you need to figure out the right intervals for each email drip.
For example, it would be understandable if you time the detailed tour of your SaaS product to be sent even just a few days after you made your first introduction.
However, you can’t have the same interval between the free trial offer and the feedback request. After all, a free trial needs more time, usually 7 to 14 days.
10) Create & Schedule Your Emails
Once you’ve designed your email workflow and decided on the automation practices you’re going to use, it’s time to start creating and scheduling your emails.
When creating your marketing emails, you should optimize your subject lines and email content to get people to open your email and click your links and CTA buttons.
Here’s how you can optimize them.
Your subject line is one of the most important elements of your email. It’s what determines whether someone will open your email or not.
That’s why you should spend some time coming up with an effective subject line. Here are some tips:
Use Power Words: Power words are those that evoke an emotional response. They can be used to grab attention and persuade people to take action.
Some examples of power words include “discover,” “amazing,” “unbelievable,” and “guaranteed.”
Avoid Spam-Trigger Words: Spam-trigger words are those that can trigger spam filters. These include words like “free,” “save now,” and “click here.”
Keep It Short: In general, you should keep your subject lines short. That’s because people are more likely to read shorter subject lines.
Use Personalization: Personalization is another great way to get people to open your emails. In fact, personalized emails can increase your clicks by up to 14%.
You can personalize your subject lines by using the person’s name or a relevant piece of information about them.
For example, you could say, “John, here’s how you can increase your conversion rate” or “Welcome to our VIP program, Jane!”
Now let’s move on to email content.
When it comes to email content, there are a few things you should keep in mind.
Be Concise: Just like with your subject lines, you should also keep your email content concise. That means getting straight to the point and avoiding long paragraphs.
Having a concise email body will also be appealing to users who are using mobile devices to read your emails.
Speaking of mobile…
Optimize Your Email For Mobile Screens: According to HubSpot, having a mobile-responsive email design can increase your clicks by up to 15%.
So it’s important to optimize your marketing emails for mobile screens. That means using a responsive email template and keeping your email content short and sweet.
Use Images Sparingly: Images can make your email more engaging. However, you should use them sparingly as too many images can make your email look cluttered.
What’s more, make sure that your image files don’t have too large file sizes. If they’re too bulky, it will affect your email’s loading speed and test your subscriber’s patience.
Use Alt Text: Alt text is the text that appears when an image doesn’t load. It’s also what screen readers use to describe images to people who are visually impaired.
That’s why you should always include alt text for your images.
Include A CTA: A CTA is a piece of content that encourages the reader to take a specific action.
For example, your CTA could be “Download our free eBook,” “Sign up for our webinar,” or “Talk to a sales representative.”
11) Check Your Email For Compliance
Before you hit “send” on your email, you need to make sure it’s compliant with the law.
The two primary laws you need to be aware of are the CAN-SPAM Act and the GDPR.
The CAN-SPAM Act is a law that governs commercial email messages in the United States. It requires businesses to include certain information in their marketing emails, such as a physical address and opt-out link.
It also prohibits businesses from using false or misleading information in their emails.
The GDPR is a law that regulates how companies can collect, use, and store the data of individuals in the European Union.
It applies to any company that processes the data of individuals in the EU, regardless of whether the company is based inside or outside the EU.
12) Measure Your Email Marketing Performance
Once you have got your email marketing process running, it’s important to measure its performance.
There are a number of metrics you can track. Let’s look at some of the most important ones:
List Growth Rate
This is the rate at which your email list is growing. You can track this metric by looking at the number of new subscribers you’re getting each month.
Email Open Rate
The open rate is the percentage of people who open your email. For example, if 100 people receive your email and 50 of them open it, your open rate would be 50%.
As of this writing, the benchmark for email open rates in the tech industry is around 22.7%. So, if your open rate is above this, you must be doing something right with your subject lines and preview texts.
The click-through rate (CTR) is the percentage of email recipients who click on a link in your email. For example, if 100 people receive your email and 10 of them click on a link, your CTR would be 10%.
The benchmark for this metric in the tech industry is 2%. If your CTR is constantly above that benchmark, you’re doing a great job with your email content.
The bounce rate is the percentage of emails that could not be delivered to your intended recipient.
There are two types of bounces: soft bounces and hard bounces.
A soft bounce is when an email is temporarily undeliverable. This can happen when the recipient’s inbox is full or their server is down.
A hard bounce is when an email is permanently undeliverable. This can happen when the recipient’s email address is invalid or their domain is permanently shut down.
As of this writing, a bounce rate of up to 2% is considered acceptable.
Now, your bounce rate is something you should watch out for. If email service providers and anti-spam networks see that you have high bounce rates, that could affect your email deliverability in the future.
That means they could mark your emails as spam just because you have high bounce rates.
So keep your bounce rates to a minimum. If there is a significant number of email addresses that give you hard bounces, remove them from your lists altogether.
After all, getting rid of a few bad apples is better than losing your credibility as an email marketer.
The unsubscribe rate is the percentage of people who unsubscribe from your email list after receiving one of your emails. For example, if 100 people receive your email and 10 of them unsubscribe, your unsubscribe rate would be 10%.
As of this writing, the benchmark for email unsubscribe rates in the software industry is 0.2%.
So, if your unsubscribe rate is higher than that, you might want to take a look at your email content and see if there’s anything you can do to improve it.
Spam complaint rate
The spam complaint rate is the percentage of people who mark your email as spam. For example, if 100 people receive your email and 10 of them mark it as spam, your spam complaint rate would be 10%.
Now, the acceptable spam complaint rate is 0.1% or less. Like the bounce rate, exceeding the benchmark can affect your future email deliverability.
So, it’s important to keep an eye on this metric and watch out for spam trigger words in your marketing emails.
Email Forwarding Rate
The email forwarding rate is the percentage of people who forward your email to someone else. For example, if 100 people receive your email and 10 of them forward it to a friend, your email forwarding rate would be 10%.
13) A/B Test Your Marketing Emails
A/B testing is a process of comparing two versions of something to see which one performs better.
In email marketing, A/B testing usually refers to testing two different subject lines or two different email templates.
However, you can really test anything in your marketing emails. For example, you could test the time of day you send your emails or the frequency with which you send them.
To A/B test your emails, simply create two different versions of your email and send each version to a different group of people. Then, measure the performance of each email and see which one performs better.
Final Thoughts On Email Marketing For SaaS Businesses
Email marketing is a powerful tool for driving growth for your SaaS business. If you do it right, it can drive a massive ROI and really drive growth.
However, the inner workings of an email marketing campaign are not something to be taken lightly.
In order to run a successful email marketing campaign, you need to have a firm understanding of your target audience, best practices, and how to measure your performance.
Hopefully, this guide has given you a better understanding of how email marketing works and how you can use it to drive growth for your business.
Looking for more strategies and tips to help you grow your SaaS business? Visit our blog here.