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SaaS Vs Traditional Marketing Agency - Which is Better for Your Business?

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SaaS Vs Traditional Marketing Agency - Which is Better for Your Business?

Posted by Trevor Hatfield

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2/28/22 12:46 AM | Comments

SaaS-Vs-Traditional-Marketing-Agency-Which-is-Better-for-Your-Business

If you had a toothache, would you prefer to see a general physician or the dentist?

A specialist would have a better, long-term solution to your problem. Right? 

Similarly, a traditional marketing company caters to all sorts of products and services. But, a SaaS marketing company makes SaaS business its area of focus and expertise. That is because they are more experienced in dealing with your SaaS business than anyone else.

What Makes Saas Different From All Other Types Of Businesses? 

Technical teams- development, product, and design teams form the core of SaaS companies. Other teams are the marketing team, customer/tech support, and leadership teams. 

In such companies, the marketing team has a pivotal role to play. 

There could be a huge communication gap between the product creators and users. Core teams of engineers, data analysts, and product managers need a bridge to close the gap. The marketing team/growth partner closes that gap. While core teams create the product, Saas marketing team has to bring in the clients.

Unlike a traditional business where you measure sales at the end of the day and decide whether it was a good day for business or not, SaaS companies use metrics that give them a picture of retention, churn, engagement, etc. This helps them predict recurring revenue, create product roadmaps and tweak their marketing as they go. 

Here are the top 10 metrics that Saas companies track: 

  1. Monthly Recurring Revenue (MRR)
  2. Monthly Active Users / Daily Active Users (MAU/DAU)
  3. Customer Lifetime Value (CLTV)
  4. Customer Acquisition Cost (CAC)
  5. Customer Churn Rate (CCR)
  6. Customer Retention Rate
  7. Leads by Lifecycle Stage
  8. Leads to Customer Rate
  9. Net Promoter Score (NPS)
  10. Customer Satisfaction Score (CSAT)

A traditional marketing company usually deals with direct/business-to-customer scenarios. It does not need to be technology-savvy and thus isn't. While SaaS companies primarily depend on digital marketing strategies.

The most significant difference is that a traditional company has little to do after the first sale. Once the customer makes their first purchase, their job is as good as done. 

6 Reasons To Choose A Saas Marketing Company Over A Traditional Marketing Agency

Aware of strategies at various stages of the customer journey

A traditional marketer creates brand awareness by conducting promotional activities like placing ads and also pays attention to little details such as meta description best practices, engaging visual content, user experience on the website, etc. Sometimes they may even work with other teams like graphic designers, to make a logo that works better for their brand. They also focus on developing your local SEO depending on the type of services you offer, for example, if you have a dental office and want to show up as the top result when a person in your area searches "dentist office near me" with the help from dental marketing agencies, you can ensure to land on the first page and with effort, maybe even the top result. They track and measure traffic on the website/engagement channels up to activation. Activation is when the customer takes the first important step of signing up/downloading the app. That is the final goal of a traditional marketer. 

But in Saas, the activation doesn't always result in business?

In the AAARRR funnel, the scope of traditional marketing stops at the activation of the customer. But SaaS marketing goes throughout the lifecycle.

SaaS marketing strategy helps create awareness, drive signups & helps customers stick to the product and not churn. Recurring business is a massive chunk of SaaS revenues.

To share an example: A designer shoe brand will hire a traditional marketing agency to run ads and make you aware of their product. Once you purchase the shoe, the ads will become irrelevant to you, and as such, you will no longer be a target. A traditional marketing company's job for you ends with your purchase.

But if you sign up for CRM software, the marketing team will share updates, inform you about other plans, track your product adoption. You can also integrate your CRM software with Google and use it as Google CRM. They will check up on you to understand if you got your ROI, and then they will make a case study about it to use as a reference.

Keeps up with the transient product


A traditional company usually creates collateral to promote a product. They do not have to deal with the same product changing quickly. On the other hand, SaaS products get regular updates to meet changing customer needs and expectations. It is different from other products and services where it is not practical to launch "new and improved" versions every few months. A SaaS product launches new features, changes in look and feel, and fixes every sprint cycle. The SaaS marketing team stays on top of all significant updates by working with the core teams. Creating valuable and accurate content across digital platforms keeps customers updated. You should also try new types of content such as launching a podcast, sharing newsletter, or creating webinars

To share an example: A soap manufacturer will probably develop a newer version of the soap or a new product once a year. However, email marketing software can get upgrades every few weeks or add new features such as a DMARC analyzer for better deliverability. The marketing company working with them will create pop-ups, google ads, tiny videos informing you as a client of any significant change.

Understands Technology and data


Traditional marketing companies work with tangible goods and services. They do not need to know about cloud hosting or data analytics software. However, in SaaS, it is important to understand the product's technology & metrics that would be useful to indicate growth or churn. For SaaS marketing agencies it is crucial to possess deep knowledge of cybersecurity, the importance of web hosting, website audits, and analysis of a variety of metrics. 

SaaS marketing agencies know and use different data analytics tools to help measure different data events. This information is used to understand how effective current campaigns are. Based on that, it is easy to create appropriate marketing strategies. Traditional marketing companies do not conduct this type of data-driven product-led activity.

To share an example: Consider a SaaS company like Trello that offers ‘freemium’ for a limited type of usage. The marketing team will extract different data points concerning usage. They will understand how many people drop off the app without completing their first project. They may run a campaign with helpful tips to use the app. They understand the usage patterns of 'freemium' clients to determine what can be done to convert them to paying clients.

Contributes to existing stakeholders


Traditional marketing companies work to mostly acquire new customers and some repeat business. Their skills cannot be used internally to make the internal teams' work lighter or better. The SaaS marketing team as your growth partner needs to have deep product knowledge for all the products of a Saas company.


This helps create meaningful content that can be used for internal communication as well. This can help encourage product adoption at the client site and user training. Collaterals created by Saas marketing take care of the most common queries even before the ticket lands on the support platform. This helps reduce the workload of the customer service team to a great degree. Your customer engagement and satisfaction improve resulting in more repeat business. Traditional marketing companies do not have this level of engagement with internal teams.

Have tried & tested playbooks ready to be executed

Any strategic consultant has a set of playbooks that have been tried and tested over time. Since SaaS marketing companies handle SaaS businesses, they get to refine and add on to existing strategies. By executing their playbooks every day with multiple SaaS clients they can generate insights at scale. This fuels continuous innovation in marketing. Chances of success for SaaS clients are much higher with Saas marketing as compared to traditional marketing.

Mindset shift


Saas marketing requires a different mindset than traditional marketing. Instead of making the product the hero, the customer has to be the hero with a focus on solving their problem. This difference in marketing philosophy makes a huge difference to the client's business. 

For example, if you are selling a shoe you would want to highlight that it's water-resistant, made of sturdy material, it's hand-made with precision, etc. This is a classic selling by stating the features. 

But in Saas marketing, there would be hundreds of products like yours or even better. In that case, you have to talk about the customer's problems and how you will solve them. You need to narrow down your positioning and always talk about the outcomes you can promise. 

Bottom Line

If you choose a traditional marketing agency for your SaaS product it would involve a lot of training, experimentation, discussion & whatnot. It might lead to more frustration than help. And in Saas world, where there is a new product coming in the market every day it's important that you make quick & smart decisions. 

So, if you are ready to scale your B2B SaaS business up with a product-led, data-driven approach, reach out to a growth expert here!

Topics: SaaS marketing company, traditional marketing company

   

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