As a SaaS founder, customer acquisition strategy is crucial to the success of your business. However, knowing where to start can be overwhelming with many strategies and tactics. Because it's overwhelming and takes a lot of time and effort, some companies treat customer acquisition transactionally by trying new things sequentially without a cohesive strategy.
In this guide, we'll break down the basics of customer acquisition and help you put in place a strategy backed by tips and tricks (the tactics) to grow revenue predictably.
To understand customer acquisition strategy, SaaS founders must focus on the strategy and related tactics to bring new customers to their product or service. This includes identifying the most effective marketing channels and determining what it costs to acquire new customers in those channels.
An example of this could be using B2B content syndication, where publishers offer your valuable content to a targeted audience of your ideal buyers in exchange for registration information.
The series of strategy & tactics choices you make, your methods, constitutes your customer acquisition strategy. There are two important parts fo customer acquistion:
Sales teams also play a role in the customer acquisition process and should play a role in helping develop customer acquisition strategies and tactics. Sales are the 'tip of the spear' for a company's marketing efforts by building relationships with potential buyers that marketing uncovers, then guiding them through the buying process.
Customer acquisition methods combine strategies and tactics to gain new customers for a product or service. So it's essential for SaaS founders to look for ways to diversify methods to grow revenue fast, while investing in strategies, like organic content marketing, that will pay off over the long run. But first, you need to know where you're going before you can how to get there.
Before acquiring customers, you must define how you'll measure success. The Objectives and Key Results (OKR) framework is a simple but popular method pioneered by Google.
Your end objective will most likely be a set amount of revenue over a fixed period (for example, generating $1 million in ARR in Q2). The 'KR' part measures the effectiveness of the programs you are using to achieve your objective (5,000 website visitors in June with a conversion rate of 5% and a churn rate under 3%). After setting up your OKRs, you can work backward to plan and implement your customer acquisition strategies to meet them.
Here are some examples of key results you can put in place to make sure you are meeting your objectives within the budgets you set:
Cost per lead (CPL) - What it costs to acquire a lead across the company and marketing. CPL = Total Cost of Lead Generation / Total Number of Leads Generated
Cost per acquisition (CPA) - Similar to CPL, but for actual new customers. CPA = Total Cost of Advertising / Total Number of Acquisitions
Customer lifetime value - Measures of the total value a customer brings to a business over their entire relationship with the company. (CLV) = (Average Purchase Value) x (Number of Repeat Purchases) x (Average Customer Lifespan)
Conversion rate - Helps businesses assess the effectiveness of their marketing efforts and website performance of converting visitors into desired actions. Conversion Rate = (Number of Conversions / Number of Visitors) x 100
Churn rate - A key metric used to assess customer retention and loyalty. Churn Rate = (Number of Lost Customers / Number of Customers at the Beginning of the Period) x 100
Customer lifetime value (CLV) - The total monetary value a customer is expected to generate for a business over the entire duration of their relationship. CLV = (Average Revenue per Account per Month) x (Average Customer Lifespan in Months).
The key is to always be looking at customer acquisition (those who pay) versus all users (paid + trial). Customer acquisition differs from user acquisition in that it focuses specifically on acquiring paying customers rather than product users.
For example, free trials are not revenue. They are an acquisition strategy that generates users and revenue. Using the conversion rate metric, you would want to pay close attention to how many trials are converting to paying customers.
Objective: $100,000 in CLV in March.
Key results: 25 new customers with a CPA of less than $300
For example: A SaaS company spends $5000 on B2B content syndication and Google Ads.
By tracking multiple metrics and analyzing them together, SaaS founders can better understand their customer acquisition efforts' overall effectiveness and make data-driven decisions to improve results.
It may seem obvious, but implementing a successful customer acquisition strategy is essential for business growth. Companies are always doing one form of marketing or another, but often, the effort is unfocused and lacks discipline.
A deliberate, written strategy is the the key for any successful customer acquisition efforts to work. By planning and writing it down, you can see the path to achieve your goal. Break your objective down into a series of tactics and key results then track your tasks and outcomes weekly to stay on track.
Customer acquisition affects more than revenue. As you go out for funding, your valuation is the critical number everyone pays attention to. So every dollar of revenue generated via a deliberate customer acquisition strategy means multiple more dollars in valuation.
While this article is focused on the customer acquisition process, you can't ignore customer retention. While acquiring new customers is important, businesses also need to consider the cost compared to retaining existing ones.
Retaining current customers can be cheaper than constantly trying to acquire new ones through marketing efforts. However, understanding a customer's lifetime value, plus your valuation multiple, can help businesses determine how much to invest in recent customer acquisition.
In short, an effective customer acquisition strategy, combined with retention, helps drive business growth and valuations by bringing in new customers who may buy products or services repeatedly over time.
By focusing on both acquiring and retaining valuable clientele through tit'sted channels and understanding their lifetime value, SaaS founders can ensure sustainable success for their companies.
Channels are the 'levers' you use to deploy your strategy. Getting the mix right is the most difficult marketing challenge you'll face.
As a SaaS founder, you have several channels for prospective customers for your product.
Note: Product led growth (PLG) is a valid and effective customer acquisition strategy, but deserves it's own foucs, which is outside the scope of this article.
Before choosing the right channel for your audience and budget, consider your sales goals, CLV, and cost per acquisition thresholds. You may also consider partnering with an outside agency with expertise in growth marketing to help put a strategy in place.
When selecting customer acquisition channels, it's important to remember that each channel has its strengths and weaknesses. For example, social media may be great for targeting younger audiences, while email marketing may have higher conversion rates among older demographics. Determine where your target audience is most active online and allocate to maximize return on investment (ROI).
In order to successfully acquire new customers, SaaS founders must first identify their target audience. Conducting market research is an essential step in this process, as it provides valuable insights into industry trends and consumer behavior.
Analyzing customer behavior and preferences can also help founders tailor their product offerings to meet the specific needs of their target audience.
Creating buyer personas is another effective way to identify your target audience. By developing detailed profiles of your ideal prospective customers, you can better understand their pain points, motivations, and purchasing habits.
This information can then be used to inform marketing strategies and create more personalized messaging that resonates with your target audience.
Your CTAs are critical to the success product's customer acquisition plan. Decide what to offer once someone comes onto your site. And even more importantly, what you'll put on the CTA button. For example, 'Submit' is not as impactful as 'Grow Revenue Now'.
Offering free trials or demos of your product is particularly effective for a CTA. This allows potential customers to experience firsthand the unique value proposition of your offer and can be an effective way of converting them into paying subscribers.
Highlight your product's unique features and benefits to create a strong value proposition that sets you apart from the competition. This is key for customer acquisition as it will help potential customers understand why they should choose your SaaS offer over others in the market.
To effectively highlight your product's unique selling points, incorporate them into your messaging across all channels - from website copy to social media posts.
Focus on solving a specific problem for customers with your SaaS solution. By doing this, you position yourself as an expert in providing solutions for a particular pain point or challenge that target customers to face.
This can be achieved by conducting research and gathering feedback from current/potential users so you can tailor your messaging and product offering accordingly.
Differentiate yourself from competitors through creative branding strategies such as memorable taglines or visual elements like logos/colors/fonts. Additionally, focus on building trust with potential buyers by showcasing customer testimonials/reviews on your website or other marketing materials.
No matter how many leads you generate, only 5%, on average, will buy within a month (in-market or sales-ready leads). Therefore, developing a strong brand identity is crucial for the long game in customer acquisition in the competitive world of SaaS. Solid branding practices set you up for being at the top of buyers' minds when they are ready to make a purchase.
It begins with crafting a message that resonates with your target audience, addressing their pain points and offering solutions that make their lives easier. Design appealing and consistent marketing materials and websites to create an inviting user experience.
Finally, establish yourself as a thought leader in your industry through purposeful and consistent content marketing efforts such as blogging, webinars, and content syndication.
With these steps, you can differentiate your brand from competitors while building trust and establishing credibility with potential customers. Creating an enticing visual aesthetic and messaging talks directly to your target audience's needs will give you the foundation for successful long-term customer acquisition in the SaaS space.
Source: Content Marketing Institute/MarketingProfs
Identify the most relevent social media platforms for your target audience is important. In most cases, it will probably be LinkedIn, but you may have more success on YouTube, for example.
With so many social media platforms out there, it's crucial to determine which ones your potential customers are using then make sure you have a steady flow of content in the feeds. This will help you focus your efforts on the channels with the highest engagement and conversion rates.
Take your pillar content, and break it into smaller, bite-sized pieces to create posts. Post engaging content consistently. Once you've identified the right social media platforms, it's important to post content that resonates with your target audience.
Consistency is key here – aim to post at least once per day or a few times per week. Over time your following will increase, and buyers will see your posts when they are in-market.
Invest in social media advertising to expand reach. While organic reach on social media can be limited, investing in paid advertising can help boost your reach and attract new customers who may not already be following you on these channels.
Give your potential customers a glimpse of the value they can receive from your SaaS product by offering limited-time free trials. This trial period allows them to experience the benefits firsthand and helps them make an informed decision about purchasing your product.
Host live demos of your SaaS product to give customers an in-depth look at its capabilities and functionality. This interactive approach engages multiple buyers at one time, showcases key features and builds trust between you and potential clients as they move down the funnel.
Be sure to gather feedback from these demo sessions so you can continue improving the user experience. Even if only five people attend, you've moved closer to spreading the word to your target buyer community.
Word-of-mouth is a powerful tool for customer acquisition. Implementing a referral program can help amplify your message without spending a dollar on marketing. SaaS founders can create a mutually beneficial referral program that drives growth incentives for current customers who refer new businesses.
When designing your referral program, make the referral process is easy to understand and track. Then, consider what motivates your existing customers and what they value. For example, offering discounts or credits on future purchases may be effective for some audiences, while others prefer gift cards, exclusive access to events, or swag.
Tricks may not be the right word here, but rather ways to hook your buyers into raising their hand so sales can start a conversation.
To acquire customers, you need to offer them something valuable in return for their contact information. Free, ungated content works great to get attention. But as they read that 'free' content, one trick is to create a compelling lead magnet that your target audience can't resist.
This could be original research, an in-depth e-book, a white paper, or exclusive access to a feature of your product. Once they've opted in for the lead magnet, you can nurture these leads through email marketing campaigns, sales development, and gradually convert them into prospects.
Once you get a hard-earned visit to your site, don't let it slip away without being noticed. Look for software from vendors who can identify the companies and people who visit your site so you can tailor follow-ups, tactfully. Vendors like Leadfeedr and Lead Forensics are market leaders.
Another trick for customer acquisition is to provide exceptional customer service. This helps build trust with potential clients who are interested in your offering, but hesitant about making a purchase. Responding quickly and helpfully to their inquiries and concerns will increase the likelihood of converting these prospects into loyal customers who will recommend your SaaS product to others within their network.
Source: Content Marketing Institute
Paid Google (or Facebook or LinkedIn), ads should always be a tactic. Target specific keywords with Google Ads to acquire customers already searching for solutions like yours. With Google's expansive reach and targeting capabilities, you can appear at the top of search results when someone types a relevant query.
Run social media ads targeting your ideal audience on platforms like Facebook, Instagram, and LinkedIn. These platforms allow you to create highly targeted campaigns based on demographics, interests, behaviors, and more. By reaching out to your ideal customers where they spend their time online, you increase the chances of converting them into paying customers.
Experiment with retargeting ads to bring back visitors who have previously shown interest in your offering but haven't converted yet. Showing them tailored ads based on their previous interactions with your website or app gives you another chance to acquire a customer already considering your product or service.
Conduct keyword research with tools like Ahrefs to identify exact high-buying intent terms relevant to your SaaS offering. High intent means a keyword someone in-market might use like 'best accounting platform' vs. 'what is accounting software'. Then, use these keywords strategically throughout your website's content to improve its search engine ranking and increase visibility for potential customers.
Create valuable content that naturally incorporates those keywords and questions and solves problems your target audience has. Over time, this will attract visitors and establish you as an authority in your industry.
Ensure website speed, mobile responsiveness, and easy navigation so visitors can easily find what they're looking for on your site without frustration or delays.
To optimize your website for SEO:
Identifying and partnering with influencers and thought leaders can be a powerful way to acquire new customers for your SaaS product. Start by researching influential figures in your industry through major publications, social media or online communities. Once you've identified potential partners, contact them via email or direct message proposing a mutually beneficial partnership opportunity.
To incentivize promotion from the influencer, you can offer exclusive discounts or free trials to their followers. This will encourage the influencer to promote your product and create a sense of urgency among their audience, as they'll want to take advantage of the special offer.
By leveraging these partnerships, you can tap into an established audience that is likely interested in what you offer, making it easier and more cost-effective than trying to reach them on your own.
Research events that potential customers within your target market are attending and make it a priority to participate in industry events. Prepare engaging presentations, demos, or workshops showcasing the value of your SaaS product so you'll leave an impression on attendees. Ensure you have enough materials, such as business cards and promotional items, to network with attendees and exchange contact information for follow-up communication.
Attending industry events is a great way to connect with potential customers face-to-face while establishing relationships. It also provides opportunities to learn more about their pain points, which helps create better solutions.
By being present at these events, you're building brand awareness and positioning yourself as an expert in your field, which can lead to more leads and, eventually, customer acquisition for your SaaS product.
Regularly surveying existing customers on their experience using your software is crucial in improving your offering. By gathering feedback directly from your users, you'll gain valuable insights into enhancing the user experience and addressing pain points. Make sure to analyze the data and implement changes accordingly.
Implementing customer feedback into future iterations of your product roadmap can help ensure that you provide the features and functionality that users want and need. Consider creating a system for organizing feedback based on priority level so you can focus on making improvements that will have the most significant impact.
Incentivizing satisfied users with referral programs is another way to use customer feedback to improve acquisition rates. For example, encourage existing customers to recommend your software by offering discounts or exclusive access to new features or beta testing opportunities. This creates a win-win situation where both parties benefit – happy customers receive rewards, while you acquire new customers through word-of-mouth recommendations.
Customer acquisition strategies are a crucial aspect of success for SaaS founders, and implementing effective strategies can make the process easier and more efficient. By focusing on understanding your target audience, optimizing your marketing channels, providing exceptional customer experiences, and leveraging data-driven insights, you can attract and convert customers in a competitive market.
Remember that customer acquisition is an ongoing process that requires continuous refinement and adaptation. Stay agile, test new approaches, and always prioritize the needs and satisfaction of your customers.
With the right tactics and a customer-centric mindset, you can achieve sustainable growth and build a loyal customer base for your SaaS business. So, go ahead and put these tips and tricks into action to accelerate your customer acquisition efforts and pave the way for long-term success.