The Ultimate Guide To SaaS Customer Marketing
The SaaS business model is different from traditional business models in so many ways.
For starters, SaaS businesses get to enjoy recurring revenues.
This is in contrast to traditional businesses where they get one-time revenues. They sell their product. And after the payment, that’s that. You don’t quite know if you’ll ever see that customer again.
But of course, recurring revenues mean you have long-term relationships with your customers. You don’t just promote your product up until the purchase.
In a SaaS company, you keep wooing your customer even beyond their first purchase. In fact, you want to keep winning them over for as long as you can.
This is what SaaS customer marketing is all about.
What Is SaaS Customer Marketing?
SaaS customer marketing refers to the strategies and tactics employed by SaaS businesses to create long-term relationships with their customers.
Customer marketing focuses on keeping your current users rather than acquiring new ones.
It’s not just about promoting your product or service anymore. It’s also about making sure that your customers are happy and satisfied with what they’re getting.
This is why SaaS customer marketing should be a key part of your overall digital marketing strategy.
Why Is SaaS Customer Marketing Important?
There are several reasons why SaaS customer marketing is important.
First and foremost, SaaS companies live or die by their recurring revenues. Let’s get that straight. The SaaS business model banks on acquiring AND retaining customers.
In order for SaaS businesses to enjoy those sweet sweet recurring revenues, they need to do everything they can to foster long-term relationships with their customers.
Here are other reasons why customer marketing is important for a SaaS company:
Retaining Customers Is Cheaper Than Finding New Ones
The phrase “customer retention” is music to any SaaS marketer’s ears.
The rule of thumb is that it costs five times more to acquire a new customer than it does to retain an existing one.
There are two main reasons why it’s so expensive to find new customers:
The first reason is that you need to spend money on acquisition channels like paid advertising, PR, and lead generation.
The second reason is that the sales cycle for new customers is usually longer and more complex than for existing customers.
So if you want to save some money (and who doesn’t?), you should focus on SaaS customer marketing.
But don’t get me wrong here. I’m not saying that you should ditch all of your customer acquisition efforts altogether.
Finding new customers is still a crucial part of growth. In fact, you should spend a lot of resources and effort on growing your user base.
You just shouldn’t do so at the expense of your current customers.
Customer Marketing Increases Your CLV
This benefit of customer marketing is very similar to the first one. We’re just going to explain it in terms of metrics.
CLV stands for customer lifetime value. It’s a metric that SaaS businesses use to measure the total value of a customer relationship.
Essentially, the CLV is the total revenue you generate from a single customer during the entire time they subscribe to your SaaS product.
There are two factors that contribute to your CLV: the average recurring revenue you get from a single customer, and the average time your users stay with you.
The CLV:CAC ratio is a metric that indicates how profitable your SaaS company is. It literally tells you how much you are making for every dollar you spend on marketing and sales.
To see this more clearly, let’s have an example.
Let’s say you spend $1000 in marketing and sales for each new customer. Then, through customer marketing, you keep your users for an average of ten years with an average annual recurring revenue (ARR) of $500.
That gives you a CLV of $5000 and a CLV:CAC ratio of 5:1. That means you’re making $5 for every dollar you invest in customer acquisition. Not bad.
Now let’s compare that to a case wherein you don’t manage to work on your customer marketing. Let’s say you only keep your customers for an average of three years.
That would give you a CLV of $1500 and a CLV:CAC ratio of 1.5.
Now, would you consider a 150% ROI in three years to be enough?
I don’t think so.
Customer Marketing Increases Upsells and Cross-Sells
Another important benefit of SaaS customer marketing is that it can help you increase your upsells and cross-sells.
Upselling is when you convince an existing customer to buy a more expensive version of your product. Cross-selling is when you convince a user to buy a complementary product.
Both of these are powerful growth strategies for SaaS businesses.
The reason SaaS customer marketing helps with this is that, by definition, it’s all about building long-term relationships with customers. And the longer the relationship, the more likely a customer would trust you and buy from you again.
What’s more, upselling and cross-selling would ultimately increase your CLV.
Customer Marketing Helps Build Brand Loyalty And Advocacy
Being able to consistently build relationships with your customers can earn their loyalty and advocacy.
Both of these are extremely valuable for SaaS businesses.
Brand loyalty is when customers stick to your product because they trust your SaaS brand. If you develop new products, they would more likely buy them too. What’s more, it leads to increased customer retention and a higher CLV.
Brand advocacy, on the other hand, is when customers promote your product to their friends and family. Having your existing customers actively bring in referrals would give you a big boost in your growth.
Having Long-Term Customers Proves Your Trustworthiness
This benefit of SaaS customer marketing might not be as obvious, but it’s still worth mentioning.
The longer your customers stay with you, the more it proves that you’re a trustworthy SaaS business.
In today’s world, there are so many SaaS products to choose from. And customers are bombarded with marketing messages everywhere they go. So it can be hard to stand out and be noticed.
When a potential customer sees that you have several users who have been with you for years, it would help increase your credibility. It would make them more likely to try out your SaaS product.
SaaS Customer Marketing Strategies
Now that we know the benefits of SaaS customer marketing, it’s time to talk about some SaaS customer marketing strategies.
There are many different ways to approach SaaS customer marketing. But here are some of the most effective ones:
- Provide Stellar Customer Support
- Offer A Lot Of Customer Success Services
- Track Customer Satisfaction Metrics
- Always Monitor Your Customer Reviews
- Build A Community Of Customers
- Use The Right Content Marketing Strategies
- Keep The Emails Coming
- Create An Awards Program
Let’s talk about them one by one.
1) Provide Stellar Customer Support
Retaining your existing customers is a collaborative effort from your marketing, product development, and customer support teams.
Remember that SaaS stands for “software as a service.”
The word “service” is there for a reason.
Your SaaS business exists to serve your customer. If you could, you would even provide a flawless SaaS solution that never encounters any problems.
But we know that there is no such thing as a perfect product.
Your users are bound to have technical issues with your SaaS platform. Your customer support team’s goal should be to troubleshoot these problems as fast as they can.
That way, your users would be more likely to stay with you in the long run.
Let’s talk about how you can give excellent customer support to your existing users.
Skilled And Polite Support Reps: First, you need to have a team of highly-skilled customer support reps. They should be able to quickly and efficiently solve any customer issue.
But more than the skill to troubleshoot problems, support reps should also be polite and patient. They should know how to handle angry and frustrated customers.
At the end of the support sessions, the reps should make the customer feel like they are valued.
Robust Support System: Second, you need to have a robust customer support system. This could be a help desk software or a live chat tool. It should be easy for customers to reach out to you and get help when they need it.
Multi-Channel Support: You also need to provide support through multiple channels. Don’t limit it to email support. Some customers might prefer to talk to a human rep on the phone. Others might be more comfortable sending an SMS or using live chat.
The important thing is to give them the option to choose.
Fast Response Times: Third, you need to have fast response times. Ideally, you should aim for under one hour. But at the very least, you should respond within 24 hours.
Remember, SaaS customers are paying for your product. And they expect nothing less than excellent service.
So is it necessary to provide 24/7 support?
Well, it would be a big plus. But it would also come at a great cost. You need to assess whether or not the nature of your SaaS product and customer base needs unlimited access to a technical support team.
For example, if you have a SaaS solution that is only used by local businesses, then they would probably need support during business hours.
But if you have a SaaS platform that’s used by consumers, then they could encounter problems with your product at any time of the day.
Time zones are a big consideration here as well. Let’s say you’re a SaaS business based in the US. But you have customers all over the world.
You would need to make sure your customer support is available during their hours as well. The last thing you want is for them to reach out to you when your team is asleep.
2) Offer A Lot Of Customer Success Services
Another important SaaS customer marketing strategy is to focus on customer success.
Your goal should be to help your customers achieve their desired outcomes with your SaaS product.
There are many different ways to do this:
Form Your Customer Success Team: First, you need to have a dedicated customer success team. They should proactively reach out to customers and offer help.
Provide Onboarding And Training Services: It’s not enough to just hand over the SaaS product to the customer and expect them to figure it out on their own.
You need to provide a smooth onboarding process right after they purchase your SaaS product. It could be a mix of tutorial articles, videos, and live training sessions with your customer success team.
The goal is to make sure they start strong with your SaaS solution.
But you shouldn’t stop at onboarding. You also need to provide even more training from time to time. This could be in the form of webinars, on-demand online courses, or even one-on-one coaching sessions.
The goal is to make sure they are always using your SaaS product to its full potential.
Provide Self-Service Customer Success Resources: In addition to onboarding and training services, you should also provide customer success resources.
These could be ebooks, blog posts, case studies, or anything they can access in your knowledge base or customer portal. Basically, anything that would help them be successful with your SaaS product.
Again, the goal here is to help them achieve their desired outcomes.
Monitor Customer Health Metrics: Another important thing your customer success team should do is monitor customer health metrics.
This could be things like product usage, support tickets, customer engagement, or anything else that would give you a good idea of how they’re doing.
The objective is to identify any potential problems early on. That way, you can take action to prevent them from churning.
Reach Out To At-Risk Customers: Once you’ve identified which customers are at risk of churning, you need to reach out to them.
Your customer success team should proactively reach out and offer help. They should also try to upsell them to a higher subscription tier if possible.
The goal is to keep them happy and engaged customers.
These are just some of the things you can do to focus on customer success. But the goal is always the same: to give your users a great customer experience and use your SaaS product to its full potential.
3) Track Customer Satisfaction Metrics
Customer satisfaction is another important SaaS customer marketing metric you should track.
Net Promoter Score: The Net Promoter Score is a popular way to measure customer satisfaction and even advocacy. It’s a simple survey where you ask customers how likely they are to recommend your SaaS product to others on a scale of 0 to 10
You then group them into three categories: Promoters (score 9 to 10), Passives (score 7 to 8), and Detractors (score 0 to 6).
Your NPS is the percentage of Promoters minus the percentage of Detractors.
So your NPS can go as low as -100 (all are detractors) and as high as 100 (all are Promoters).
The goal is to have an NPS of at least 30. That means that the majority of your customers are happy with your SaaS product and are willing to tell others about it.
An NPS of 0 to 30 is sort of a safe zone. Your customers are somewhat satisfied, but there’s still room for improvement.
And an NPS of 0 or below means that you have some major work to do. Find out what they don’t like about your product and fix it as soon as you can.
Customer Satisfaction Score: The CSAT score is another popular way to measure customer satisfaction. It’s a bit different from the NPS, though.
Instead of asking customers how likely they are to recommend your SaaS product, you’re asking them how satisfied they are with your SaaS.
On your CSAT survey, you make your users rate their satisfaction with your product on a scale of 0 to 5 with corresponding descriptions:
1 – Extremely Unsatisfied
2 – Unsatisfied
3 – Neutral
4 – Satisfied
5 – Extremely Satisfied
In calculating your CSAT score, you will only count those who gave ratings of 4 or 5. Calculate their percentage and there you have it. That’s your CSAT score.
4) Monitor Your Customer Reviews
Since we’re already talking about customer satisfaction, let’s also talk about monitoring their reviews.
These are all great places to see what people are saying about your SaaS product.
You can also use Google Alerts to set up notifications for when your SaaS product is mentioned online. That way, you can quickly respond to any negative reviews.
The goal here is to make sure that you’re monitoring what people are saying about your SaaS product. This way, you can address any issues that they may have.
The beauty of user reviews is that you can benefit from them whether they are positive reviews or negative ones.
Here are some things you can do with user reviews:
Leverage Positive Reviews As Social Proof: If you have a lot of positive user reviews, make sure to leverage them as social proof.
You can do this by adding testimonials to your website or even creating a video testimonial.
This is a great way to show prospective customers that others have benefited from your SaaS product. And seeing how your SaaS solution helps other people may just convince them to buy it too.
Use Negative Reviews As Feedback: You can also use negative reviews as insightful feedback. Take the time to read them and see if there are any valid points that you can improve upon.
After all, your customers’ feedback is an indicator of the current demand in your target market. You should always work to meet that demand.
This is a great way to make sure that your SaaS product is always relevant and improving.
Showcase Your Customer Support Team: Responding to user reviews can also be an opportunity to show off your awesome customer support team.
If you see a positive review, make the effort of thanking them for their kind words.
And if you see a negative review, take the time to respond to it and show the world that you’re there to help. Respond politely and offer your assistance.
When potential customers see how well you’re handling it, they’ll be more likely to trust you and buy your SaaS product.
You would have used a negative review to win more customers. That’s what we call a comeback.
5) Build A Community Of Customers
Another great way to improve customer engagement is to build a community of customers.
In fact, a currently trending growth model relies on building loyalty and advocacy through a community. It’s called the community-led growth model.
The goal here is to create an environment where your customers can interact with each other and with you. This way, they can get their questions answered, give feedback, and even help promote your SaaS product.
When done correctly, this can be a great way to improve customer satisfaction and loyalty.
It’s also worth noting that a community of customers can also help you with your inbound marketing efforts.
For example, if you have a forum, you can use it as a place to announce new features or blog posts. And if you have a social media group, you can use it to run promotions or giveaways.
You can craft these promotions in a way that would encourage your community to bring in more people into the group.
The key here is to be active and engage with your community. Show them that you’re there for them and that you care about their experience with your SaaS product.
6) Use The Right Content Marketing Strategies
Content marketing is an effective inbound marketing strategy both before and after the purchase.
But you have to know what types of SaaS content would be best for acquiring new customers and which are for retaining your existing users.
Leveraging content marketing for customer marketing means coming up with content pieces that will keep your customers engaged with your SaaS product.
Here are some ideas:
Tutorials: Use educational content to show your customers how to get the most out of your SaaS product. This can be in the form of blog posts, ebooks, infographics, or even video tutorials.
Case Studies: Use case studies and testimonials to show potential and existing customers the benefits of using your SaaS product.
White Papers: Use white papers and research reports to show your SaaS product’s features and benefits in more detail.
Webinars: Use webinars to gather your current customers and provide helpful training sessions and workshops that can help them grow their own businesses.
You can even invite industry experts as guest speakers on your webinars. This would draw a larger crowd and provide more valuable insights to your customers.
7) Keep The Emails Coming
Email marketing is another SaaS marketing strategy that can help both customer acquisition and retention efforts.
For customer marketing, you can leverage the following email marketing methods:
Welcome Emails: Send a welcome email to new customers and give them a quick overview of your SaaS product. You can also include some helpful tips on how they can get started.
Onboarding Emails: Send a series of onboarding emails that will help new customers get started with your SaaS product. These emails should be educational and helpful, providing valuable insights on how they can use your software to grow their businesses.
Engagement Emails: Engagement emails are sent to encourage customers to keep using your SaaS product. They can be in the form of reminders, announcements, or even promotional messages. Whatever the case, make sure that these emails are relevant and useful to your customers.
Post-Purchase Drip Emails: Drip email campaigns are a series of emails that are automatically sent out over a period of time. They’re designed to keep your customers engaged with your SaaS product.
For customer marketing, you can use drip email tools to automate your welcome, onboarding, and engagement emails.
Newsletters: Newsletters are a great way to keep your customers updated on the latest happenings with your SaaS product. You can use them to announce new features, share case studies and testimonials, or even give helpful tips on how they can use your software.
8) Create An Awards Program
An awards program is a great way to show your customers that you appreciate their loyalty. It’s also a good marketing strategy to encourage customer retention.
You can create an awards program by giving away prizes to customers who achieve certain milestones with your SaaS product. For example, you can give away a free month of service to customers who refer ten new paying customers.
Or you can give away a discount on your SaaS product to customers who use it for six months or so.
The key here is to come up with an award that would be valuable to your customers. And make sure that the criteria for receiving the award is achievable but not too easy.
Final Thoughts About SaaS Customer Marketing
SaaS customer marketing focuses on marketing tactics and campaigns with the goal of retaining your existing customers.
There are many different SaaS customer marketing strategies that you can use to achieve this. But the most important thing is to focus on creating a great customer experience for your users.
Make sure that your SaaS product is easy to use and provides value to your customers. Still, even the best-designed SaaS solutions are bound to have issues every now and then.
That’s why you need strong customer support and customer success teams. Not to mention the supplemental SaaS content and communities needed to build brand loyalty and advocacy.
If you can do these things, then you’ll be well on your way to success with SaaS customer marketing.
Want more guides and tips on growing your SaaS business? Visit our SaaS marketing blog here.