Email Marketing in SaaS: Strategies to Maximize ROI
Email marketing should be one of the pillars of your SaaS company. After all, every successful SaaS business is incorporating this marketing channel into its growth and ROI strategy.
But similar to most campaigns, there are challenges you need to overcome.
According to MailChimp, the SaaS industry has an average email open rate of 21.29%. Meanwhile, its click-through rate is at 2.45%.
For a quick differentiation, an open rate means the percentage of people who actually opened your email. Click-through rate means the percentage of people who clicked a link inside your email.
Now, you’ll need a different approach if you want to increase both of these elements. But most of it boils down to behavioral marketing. (Click that link if you want an extensive coverage of that strategy’s importance).
With that said, what exactly makes email marketing in SaaS different from other industries? Are there proven SaaS email marketing strategies that you should follow? Where do you even begin?
Well, this blog will attempt to answer those questions. Let’s start with the metrics you’ll need to monitor.
SaaS Email Marketing Metrics: What to Track
We’ve already touched on a couple of metrics earlier: open rate and click-through rate. But there are other elements at play here.
And each of these elements is important in its own way. Put simply, their role will depend on the end goal you’re trying to achieve.
1. Open rate
As mentioned earlier, the open rate is one of the most basic factors you should track for your SaaS email marketing strategy. However, it’s becoming an unreliable metric.
That’s because of Apple’s Mail Privacy Protection, which disables open-tracking for those who will use it. Other inbox providers are expected to follow. Thus, the open rate will likely become less important in the future.
2. Click-Through Rate (CTR)
If someone opens your email and clicks a link inside, then that will count as your CTR. To increase this metric, marketers would strategically place eye-catching and well-worded call-to-actions (CTA) all over the email.
But don’t overdo it. You can opt to have it appear on the top, middle, or bottom. Of course, this will depend on the length of your email. But typically, you’d want your CTA at the bottom.
If you’ve written your email properly, your readers can just scroll down to click your link. That is where most CTAs are located, after all.
3. Conversion Rate
Conversion rate refers to the number of people who clicked your link and completed a certain action. Here’s an example.
Suppose you’re trying to grow your email list. You create a case study about your company, then use that as your lead magnet.
If someone clicks your email, clicks your CTA, then fills out the form to get your free case study, that will count as your conversion rate. This metric is incredibly important as it’ll tell you if the money you invested in your SaaS email marketing campaign is paying off.
It’ll also provide a nice footprint to trace where the subscriber came from. More on that later.
4. Bounce rate
Bounce rate is the percentage of people who didn’t receive your email. There are two types of email bounce rates: soft bounce and hard bounce.
The former refers to temporary issues, while the latter deals with permanent ones. Bounce rate is often combined with open rate to determine the quality of an email list.
A high bounce rate would mean your email list consist of:
- Unused emails
- Fake emails
- Emails with mistakes in them
5. Over Time Engagement
Tracking this metric will help you determine the best time of day and day of the week to send your emails. According to CampaignMonitor, the best day for email marketing is Friday.
However, this number is based on the entire market and not targeted at the SaaS industry alone. Thus, you may want to analyze the data yourself to see which day is the most ideal time to send your emails.
6. Unsubscribe Rate
As the name suggests, this metric measures the number of people unsubscribing to your mailing list once they’ve received an email from you. And while it can be quite discouraging to see a high unsubscribe rate, savvy email marketers see it as an adjustment benefit.
It means you’re removing emails that aren’t going to convert. In other words, you’re increasing the value of your list by trimming useless ones.
7. Email List Expansion
Conversely, once you’ve reduced your list and shaved it down to profitable emails, you’ll want to expand it. Again, one of the tactics you can use here is creating valuable gated content for your email list.
This lead magnet should offer helpful content so people don’t feel they got cheated on. Yes, you only required an email from them. But since people are becoming more aware of SaaS marketing strategies, you need to lead with value to receive value.
This is why it’s particularly difficult to launch a SaaS email marketing campaign in this space. Your target audience is informed individuals who are at least knowledgeable about the SaaS industry and the products involved in it.
8. Email ROI
And of course, you also want to monitor the ROI of your emails to evaluate their financial efficiency. Here’s the basic formula:
ROI = Money earned after the campaign – cost of the campaign/campaign investment x 100.
As for the average profitability of email campaigns, it differs depending on the industry. However, this study found that it can return $42 for every dollar you spend.
While there are other metrics to monitor out there, these eight are your most basic indicators. Collect as much data as you can and adjust accordingly based on the numbers you’re seeing.
True, it can be difficult at first. But by tracking these metrics and tweaking your approach, you’ll eventually see positive results.
So is there any way to increase the effectiveness of your SaaS email marketing strategy? Yes, there are.
SaaS Email Marketing: Boosting Your Campaign’s Effectiveness
1. Define Your Goal
The first step in email marketing is setting a clear goal. So let’s say your aim is to move a lead from the consideration stage to the decision stage.
Your email would then focus on several elements. These can be:
- Highlighting your SaaS product’s features
- How your SaaS product’s features can solve their specific pain points
- Customer testimonials
- Case studies how you help your client’s bottom line
- A limited free trial version that’ll last for 30 or 15 days
These are just some of the many angles your email can take. Keep in mind that you don’t have to confine yourself with a single element that was listed. You can combine them to drive the point home.
2. Marketing Automation
Otherwise known as drip campaigns or autoresponders, marketing automation is sending emails based on a specific action of a visitor. For instance, if someone becomes a freemium user, they’re going to land on your freemium email list segment.
And once they do, you’ll send them a welcome message. Apart from that, your marketing automation email will also notify them that you’ll be sending another email in the next 24 hours.
This email will focus on educating them about your SaaS solution and how they can use it for their business. Your goal here is to nurture that lead until you could convert them from a freemium user to a paying customer.
3. Buyer Persona
As mentioned earlier, your goal will be based on where your lead is in your customer journey. Additionally, you’ll also need to create an avatar for your mailing list.
Think of this as your customer buyer persona but is targeted to your email subscribers. To create this avatar, include these elements:
- Company role
- Pain points
- Biggest Fear
- Personal and professional goals
- Common obstacles in their work
Today, the SaaS industry is operating in its End-User era. What this means is that employees now have the freedom to choose the SaaS tool they want to use.
That makes sense considering the solution is streamlining the employees’ workflow. As such, we’ll use it as an example to create our avatar for our email campaign.
- Name: Josh Mathews
- Company role: SEO specialist
- Pain points: difficulty finding long-tail keywords that have a high search volume but are low in competition.
- Biggest fear: compiling keywords that will not help the website rank on the SERP.
- Professional goals: help the site climb the SERP’s first page.
- Personal goals: own a house.
- Common obstacles: top executives won’t pay for proven SaaS solutions that would streamline their workflow.
A clear subscriber avatar allows you to laser focus your messages to effectively connect with your audience. Just look at the sample avatar we have.
You know Josh’s pain points so you have an idea how to solve them. It’s only a matter of using your product’s features to solve those issues to entice them to try your solution.
Once you achieved that, you can move them down your sales pipeline, which gets them closer to becoming a paying customer.
4. Tracing a Subscriber’s Digital Footprint
Of course, to properly segment your email subscribers, you’d need to monitor where they came from. Did you get their email from a lead magnet?
If yes, was it the one focused on the awareness stage? Or did they subscribe to your mailing list as they wanted to get your free case study?
Knowing where your subscribers came from will help you accurately segment them. And from there, it’s only a matter of crafting the right message to empathize with their pain points or to answer a burning query.
5. Lead with value. Always.
Always remember that people don’t care about your product. They care how your product could help them. So help them.
But as mentioned earlier, the people operating in this industry are well-informed individuals. As such, you’d need to connect with them. And connect with them as fast as you can.
One of the best ways to do that is by crafting a compelling email title. Email titles should be short and descriptive. Keep it below 60 characters, which is especially helpful for mobile users.
You also want to use power words to make your message more compelling. Here are 200 of them for your email marketing strategy.
6. Use videos
According to a survey conducted by Forrester Marketing in 2010, including a video in an email can increase its click-through rate by a whopping 200% to 300%. Even the guys at SuperOffice found that simply including the word “video” in your subject line increased their email open rate by 6%.
Apart from these, there are several advantages of using video in your email campaigns
Humanizes your site
For starters, videos can put a face on your SaaS company. Your audience will think that the tool is more than just a solution. People are behind that useful tool who are working hard to streamline the workflow of their clients.
As a result, you can immediately connect with your audience as it humanizes your product. And to truly drive this point home, have the same person appear on your video time and again.
Prepare a script that’s useful and actionable, something that your audience can instantly try once the video is finished.
On top of that, you want the presenter to share a positive and negative experience in building your SaaS company. This way, you’re further empathizing with your audience as it’s most likely they’ve experienced the same struggle that you guys went through.
And by teaching them how you overcame that obstacle, you’re encouraging them that it can be beaten.
Do you see that? You’re providing value while also strengthening the connection with your subscribers. That’s the power of videos in email.
Easy to consume
Videos are easy to consume compared to text-based content. As such, people are more likely to watch your video, especially if it’s filled with compact information.
Moreover, you can easily simplify a message with a video compared to text. As such, your point is easily understood, giving your audience aha moments that would solidify your role as an industry thought leader.
7. Inform and Promote
Of course, all of this effort is geared towards growing the revenue of your SaaS company. So you’ll want to create a combination of informational and promotional content.
Be warned, though. You need to strike the perfect balance here. Otherwise, you’re going to hurt your campaign.
A good rule to follow is the 3:1 ratio, with 3 being informational and 1 being promotional. Too much of the former and you’ll risk people unsubscribing to your email list. Too much of the latter and you won’t get any revenue.
So follow the 3:1 rule to err on the safe side.
SaaS Email Marketing: From Awareness to Advocacy
Similar to your content marketing strategy, your email campaigns can potentially convert your leads from the awareness stage to the advocacy stage. But you have to do this properly to truly see significant results.
Familiarize yourself with the metrics above then use the strategies that were outlined. Lastly, you want to A/B test all your emails to evaluate which ones are working and which need improvement.
If you’re interested in reading more strategies in the SaaS industry, visit our KenMoo blog here.