B2B SaaS Marketing Introduction

What is B2B SaaS Marketing?

Marketing and Sales for B2B SaaS companies is fundamentally different. Learn what makes B2B SaaS Marketing special.


Marketing is about influencing behavior. Great marketing drives someone to learn, understand, believe, or do something new. And for SaaS, that leads to opting into a new relationship, subscription, community or service.

Marketing professionals influence this through the commonly used funnel stages - awareness, consideration, engagement, and conversion. Your marketing efforts need to answer the following questions by your target audience:

  • “Why should I change?”
  • “Why with you?”
  • “Why now?”

What is SaaS Marketing?

For SaaS marketing, we need to add two more questions, as a customer can start small, with a trial, or a single user subscription. 

  • “Why more?” (to make it worth their while to use more of our services)
  • “Why stay?”(to complete the retention stage of the funnel)

What is B2B Marketing?

The main difference between B2B and B2C marketing is that in a B2B approach, you must convince someone to spend someone else’s money. That’s it. Other than that, B2B Marketing still needs to convince an individual to act. Your goal is to change a complete market segment’s behavior — one individual at a time.

Of course, in B2B Marketing it’s not enough to convince this one key individual in the buyer's journey. As a business purchase usually includes multiple people who can say “No” in addition to the one person who can say “Yes”. You have to start with a focused effort to turn this initial individual into an advocate for your service though, and then equip them with the materials and arguments to convince others.

Sales and Marketing for B2B SaaS have changed

Marketing is the new Sales

As we’ve entered the digital age where all information is now available on someone’s personal device, one Google Search or Alexa question away, marketing has changed. A lot. And so have Sales, Service, and PR for software companies.

Traditionally, commercial go-to-market (GTM) efforts relied on four disciplines. Marketing was responsible for advertising, sales for customer sign-up, service for fixing what was broken, and PR for announcing company and product news. While these four disciplines still exist, each of their responsibilities has shifted.

  • Marketing is the new Sales, accountable for results and ROI.
  • Sales is the new Service, growing the revenue and satisfaction of customers over time.
  • Service is the new PR department where your brand can either scale or get damaged.
  • PR is the new Marketing, focused on relevant content, followership and thought leadership.

Marketing is no longer about creating beautiful pictures and writing compelling words fashioned together in magazine and newspaper ads, TV commercials, and outdoor billboards. A modern marketing leader is measured by results from integrated campaigns that span many channels to turn the right targeted audiences into users of your product. Marketing needs to fill the sales pipeline with ready-to-buy marketing-qualified leads.

Sales is the new Service

Sales is no longer about meeting prospects and doing product demos. Most of that is automated by the marketing team using trials, self-service nurture campaigns and onboarding videos. No more schmoozing decision makers. After marketing turns prospects into first-time buyers, the new sales function is now account management. Their job is to get the maximum value from the account over time. The need to nurture customer relationships to grow revenue by helping them get the most out of their service and drive them to use more.

Service is the new Public Relations

Technical support was reactive and used to only be about fixing what was broken. This was seen as a necessary cost of doing business vs. a driver of the business. Technical support for a SaaS business has become the customer success function. These teams are the frontlines of the product - and often your brand-experience. With 24/7 service by phone, chat, or web they make sure users are so happy that they stay loyal customers, and ideally tell others about what you do, driving referral sales.

PR is now about Content Marketing

No more sending of spammy press releases. Managing relations with influencers and journalists (and now bloggers, casters, and vloggers) is all about creating special content to stand out. Analysts like Gartner have replaced global PR firms like Edelman. You need to play the content game and have the analysts use your content to help you get the word out. 

Funnel

Question to answer

Old owner

New owner

KPIs

Awareness

Why change?

Marketing

Influencer Marketing (formerly known as PR)

Unique Sessions

Subscriptions

Consideration

Why you?

Sales

Marketing & SDR

Sign-ups

Trials

Conversion

Why now?

Buy

Pay

Engagement

Why more?

Support

Account Management

Use more

Pay more

Retention

Why stay?

Customer Success

Churn & NPS

Referrals & Reputation

The Funnel and the Flywheel

Marketers use content to move prospects through the various stages of the sales funnel. At each level of the funnel, the number of people interested in your product decreases, but their interest increases. Here are the basic stages:

  •  Awareness: Why should someone change? People become aware of a need and learn of your offering.
  • Evaluation and Consideration: Why should someone consider you? They investigate further and consider you for their short list. Prospects ask questions and seek answers.
  • Decision: Why should they act? How do you drive Conversion? Once fully satisfied, prospects convert into actual customers.

However, growth is not just about building a funnel. That funnel needs to make your customers stay, buy more, and refer others. After a prospect converts to a customer there’s a key period of initial usage. Ideally, this onboarding experience leads to the customer finding value in your service. At that point they’re willing to repay your efforts by sharing their experience with others, generating more awareness in the marketplace. They’ve become engaged advocates.

At the same time, those loyal customers are also willing to learn about new features of your service or other product offerings. Which leads them on yet another cycle of the customer journey starting with awareness of these features or new products. The journey becomes an endless cycle. Customers stay longer, use more, or refer others.

A fourth and fifth funnel stage get added that basically “closes the loop”. Especially for SaaS businesses, it’s critical that the marketing team thinks about this flywheel, and not just a one-way funnel.

These are the additional stages that complete the flywheel:

  • Retention: Now that the customer is paying, it’s all about holding on to them - and perhaps encouraging additional purchases or higher tiered services.
  • Advocacy: Existing customers refer new customers and drive your ability to create (user generated) content that drives more leads.

In addition to turning the Funnel into a Flywheel, this also means marketing must support each part of the customer journey in new ways. It’s no longer enough to just focus on Awareness or driving new leads. Marketing needs to support all functions of the commercial go-to-market.

There is one more flywheel. This is called product led growth. For a SaaS business servicing customers (or users) with relatively smaller ARPU, the cost of sales, and even traditional marketing can be too high for a cost-effective go-to-market. Building the funnel mechanics of driving leads and referrals into the product experience is then the strategy of choice.

Measuring impact

To sum up the funnel definition, investors in SaaS businesses care about the following three groups of pipeline and growth metrics:

Acquisition

  • Qualified Lead Velocity rate(growth of MQLs month over month).
  • Lead Quality (I like to use win rate % * ACV)
  • Discretionary Customer Acquisition Cost
  • CAC recovery time (typically in months)

Lead quality can be measured in multiple ways. I like to use win rate (MQLs converting to Paying Customers times the ACV of these conversions). Discretionary CAC is a better metric for Marketing Leadership then all-up CAC (including people) since the non-people part of CAC can be used to optimize short term. While you can optimize the people's cost as well, it’s far less useful to do short term optimizations.

Retention

  • Logo churn after initial onboarding period
  • Quick ratio

I prefer to separate logo churn during onboarding, vs. after. The initial churn can be desirable and filter out customers that would not be a good fit and costly to service. The Quick ratio is a calculation that helps put Churn in perspective with the revenue impart, using the following formula:

(New MRR + Expansion MRR) /

(Contraction MRR + Churned MRR)

Expansion

  • Annual Revenue Per Unit (ARPU) growth
  • Engaged Advocates who refer others

SaaS Sales and Marketing are now one team

So to summarize, Marketing is the new Sales, Sales is the new Customer Service team, and the Support team is where brands are built (or damaged).

With the "Go-To-Market" functions of PR/Communications, Marketing, Sales and Services/Support now all being connected by the fabric of the digital funnel and customer data, it's hard to keep track of the hand-off points. The lines between the teams have blurred, and no longer does Marketing end when a lead gets handed to sales.

The marketing department is now responsible for ROI; the sales team is engaging in more funnel hand-holding than closing; the customer service team is renamed "customer success team" and chartered with improving the companies reputation; and the PR/Comms team is shoveling content by the metric ton into the social media machine.

Today’s marketing team has been asked to shoulder an increasing share of the accountability for sales results – in fact, 73 percent of corporate marketers reported having a quota for marketing-sourced lead generation, as noted in the 2015 Demand Gen Report Benchmark Study. Marketing teams are being held accountable for the conversion of leads, cost per acquisition, cost per conversion — all kinds of metrics that are immediately related to performance and ROI.

What is B2B SaaS Sales?

The sales team now has to ensure a positive prospect experience. Whether a consumer is enjoying a trial period of a product, or whether they have already subscribed or consumed, the sales team is being asked to nurture the customer through their experience in the hope that they can be up-sold. Today’s savvy buyer is seeking more than an order-taker with whom to interact.

As a result, the prospect has become the “commander-in-chief” of the sales process. An IDC study found that in B2B purchase decisions, 93 percent of prospects have educated themselves on your offerings before they actually knock on your door. This means a detail-oriented sales rep needs to understand every nuance of the offering – or risk becoming a barrier to sales growth.

Today’s sales rep has to be a trusted advisor – a guide through the customer journey. To foster that trust, salespeople should make an effort to understand the prospect’s unique needs, and to demonstrate this enhanced knowledge through a demo or some other form of education and delivering value.

What is B2B SaaS Customer Service(or Support)?

Of course, the first line of contact for many consumers is customer service – whose role as traffic cop has been supplemented by a responsibility to protect the reputation of the company. A question-bearing consumer is holding the phone in one hand, while tapping out notes about the customer service experience, in real-time, to the social media universe (just ask Comcast what happens when such interactions go awry).

Ensuring a positive experience – sending away a caller with a solid path to understanding or resolution – makes customer service Ground Zero for the establishment of the company’s reputation and the character of the brand. In a sense, your customer service rep has just been promoted to “chief brand officer” – and is a linchpin that can make or break your company’s reputation (we know the buyer’s journey does not end with the sale).

Public Relations (or Communications)

Suddenly, the content and thought leadership skills of the PR practitioner have earned a premium at most companies – with their wordsmithing abilities ideally suited to today’s digital marketing explosion. These new foot soldiers on the marketing front lines are asked to connect the company to all types of consumer experiences and moments, across a variety of social media sites.

No longer is the ability to write a press release — or to speed-dial a Wall Street Journal reporter — the focus of a PR pro’s resume. It’s now essential that they use their communications powers to motivate people into engagement with your brand and company.

Influencer marketing is often the term you will hear used to describe this new form of “public relations.” It’s about getting people to care about your brand, share your brand, and interact with your brand.

One Customer Journey

Regardless of their positioning around the table, one thing remains true today, as it has in the past – a solid go-to-market plan, and good cross-departmental synergy between these functions is the best way to catalyze your personnel in the competition for mindshare and sales.

A coordinated effort is what it takes today to drive new interest to your company and to ensure that today’s consumer is acknowledged – and rewarded – for engaging with you.

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