Building a quality, useful SaaS product is only the beginning of your journey. You will have to excel at attracting and converting leads as well if you want your venture to reach its full potential. In fact, because of average customer churn rates alone, in order to actually grow your business by one customer, you will have to acquire 47 new customers! That’s a 2% ratio for those of you doing the math. Generating new leads is imperative to growing your SaaS business. In all reality, there will be nothing to optimize if you are not acquiring customer leads in the first place. But once you are attracting these leads to your website, how do you ensure they are converting?
Measuring SaaS conversion rates from lead to customer is an important next step to growing your venture’s profitability. If you are not optimizing your conversion rate (CRO), you will end up with a major hole in your SaaS (and nobody likes an overgrown SaaSHole).
So read on to get your SaaS in gear and learn some of the best tactics you can use to convert those juicy leads into paying customers for the long haul.
Optimize General Marketing Tactics for Better Conversions
Let’s start with the basics. There are a few basic marketing tactics that work for a range of businesses which should be the foundation for SaaS companies to improve their conversion rates as well. Once we have a handle on these, I will move into some conversion tactics that are specific to SaaS companies.
Your journey to improve SaaS conversion rates should start with qualifying “good leads” based on the persona characteristics and behaviors of visitors to your website. This process will help you prioritize the leads for your salesperson (or team) to focus on.
Once you find those commonalities, you can start qualifying the leads as they come in based upon the characteristics and behaviors of your optimal customer. This can be a timely process if it is handled manually, but you can save a lot of time by using a platform like Hubspot to automatically score your leads.
Marketing Automation & Workflows
Once you have your customers segmented into lead tiers, you can start automating your communication to them through smart marketing content. This may sound impersonal but it actually creates much better efficiencies of time and energy.
The customers will also feel that your content is more personal and tailored to their needs because it is meeting them at their appropriate stage in the buyer’s journey. Once you have identified your buyers and their journey, you can automate the messages you want to send to them through workflows.
Workflows allow you to nurture your leads with the right content at the right time. Software platforms like Hubspot will track the characteristics and behavior of your leads within the platform and adapt the content on your website to meet them at their stage in the journey.
Calls To Action (CTAs)
Calls to action (or CTAs) provide clear direction for an action that you would like your visitors to take. For example, if they are new to your website, you may ask them to subscribe to your blog. There are many techniques that you can utilize to optimize CTA conversions on your content specifically, including:
- Making smart CTAs that adapt to the visitors stage in the buyer’s journey
- Adjusting the color, shape, or placement of the CTA
- Testing the directness of the wording in your CTAs
A study by Forbes showed that 73% of potential leads are never even contacted by the business that they engage with. This is a huge opportunity and a simple fix for improving a SaaS conversion rate. In fact, some say you should follow up with a minimum of three emails after a visitor becomes a lead on your site.
If the concern is about the time it will take to provide personal contact to each of the new leads, there is a simple fix - yep, you guessed it - automated software platforms! Utilizing a customer tracking platform like Contact.ly or Hubspot to track the contact information for your customers will help you streamline those direct interactions.
Website Conversion Rate Optimization (CRO) & A/B Testing
Within the digital marketing industry, conversion rate optimization (CRO) most often is in reference to the systematic testing of features on your website for improved conversion rates. By continually optimizing your website, you are guaranteed to incur incremental increases in conversion, which will in turn make a big difference in profits.
The key to successful CRO campaigns is changing one item at a time and test, test, test. This is achieved with A/B testing of certain facets of your content individually to identify which version converts best.
Many factors on your website may affect conversion, from the wording at the beginning or end of your posts, to the colors that you use on a landing page, to the positioning of people on your website. Test all of these facets one-at-a-time to completely optimize your website.
Optimize SaaS Specific Tactics for Better Conversions
Each of the above tactics offer good starting points for improving your lead conversions but SaaS companies shouldn’t stop here. There are a lot of unique features about SaaS products that can and should be considered when working towards improving lead to customer conversion rates. The remaining tactics are specific to SaaS companies.
Free trials are a common sales tactic for SaaS companies. We all know the benefits of these - the customer gets to experience your brand with little skin in the game, and they can decide if it’s a tool that works for them. The problem lies in getting the customers to move from the free version to becoming a paying customer. This is where your CRO tactics should come into play.
There have been a lot of studies around the optimal length of time for a free trial, most of which point to a winning length of 14 days. And the data shows that customers who engage within the first three days of the trial are much more likely to convert no matter the length.
So with that being said, the most important part of a free trial is reaching out to leads right away with the right content to nurture them through the sales process. In other words, if you know that they are more likely to convert within the first three days, ping them with content reminding them to log in.
It will do you no good to hit them with daily emails and display ads that are shoving the paid version down their throat. Lead nurturing is like dating. Their free trial with your software is the first date. They don’t want to be scared away with a proposal. However, they will appreciate a reminder of how much fun they had with you and maybe a suggestion for the next date.
Do some research to uncover their interests and pain points so that you can communicate how the paid version will be their solution. And of course be sure to delight them with the product itself so that they don’t want the experience to end.
Invest in Customer Support
While we’re on the topic of customer experience, it is crucial to nurture your customers in addition to your leads. This is a very important but often overlooked place to invest in your SaaS. One of the best ways to directly impact customer experience is with increased human support.
Have someone available to help your leads with any questions and issues that they may have with your software from the get-go. In SaaStr’s experience, this is an expensive but very lucrative way to improve conversion rates. Customers will appreciate the energy that you put into improving their experience and will be more likely to become champions of your brand.
Close Your SaaSHoles
A SaaSHole is a hole in your marketing strategy. And the biggest hole of all is at the bottom of the funnel. It may not always be intuitive that sales is a part of marketing. But if you think about it, the sales department is the closer, making them critical to conversion rate optimization. You need a killer salesperson who will capture and close more of the most-qualified leads that are falling through the cracks (see lead scoring above for more about qualifying).
As your SaaS business evolves, hiring a salesperson will become a MUST, and Jason Lemkin goes so far as to say you should start with two salespeople, so that you have a benchmark for who is actually doing a good job. Then you can measure whether you are achieving an optimal conversion rate through sales.
Optimize for Lifetime Value
To wrap it up, converting more leads to customers is only half the battle. What you want to do is convert the right leads into customers to continue to grow your SaaS. This is achieved by optimizing for the conversion of customers that have a high lifetime value (LTV), which can be measured with closed-loop reporting.
High LTV customers are the customers that contribute the most revenue over the course of their relationship with your SaaS. So it stands to reason that you would want to optimize your marketing strategies to convert more of these customers. You will get a bigger bang for your buck. And in the end, who doesn’t want a bigger profit margin (or a bigger SaaS)?
Is Your SaaS Conversion Rate Optimized?
As you can see, there is a LOT that you can do to take those qualified leads that are coming into your SaaS and convert them into customers that will champion your brand (and of course, pay!).
If you are feeling a little overwhelmed about where to start, we’ve compiled a list of the most popular tools that SaaS companies are using to simplify their marketing strategy which will help get you started.
We would love to hear what strategies work best for improving your SaaS conversion rates. Let us know in the comments below!