Think Inbound Marketing Is the Final Answer to SaaS Success? Think Again!
Of course, inbound marketing has its place in the world. No one in the business can argue that. However, we’ve uncovered some startling critical information that might inspire you to tweak your marketing focus. Inbound marketing places focus on customer awareness, consideration, and all the decision-making stages they go through. Marketing to your existing customer is something you shouldn’t overlook. Here’s why. According to the experts:
Bain and Company: “A mere 5% increase in customer retention can increase your bottom line by 25% to 95%.” If you’re letting existing customer slip out the door, they’re leaving with your profits, and will likely take them elsewhere.
ProfitWell – According to their CEO and founder, Patrick Campbell, increasing customer retention rate had an average 6.71% impact on the bottom line of over 500 SaaS companies, while acquisition only made a 3.32% impact.
Gartner Group – Examined their company up close and personal and found that, on average, 20% of their customers were generating 80% of the company’s profits.
Bluenose – According to Bluenose, one of the main reasons customer disengage is because they never really get to know the software a company sold them. So, they churn at a much faster rate. Once they leave, they don’t come back. You’ll never know what negative things they’re saying to the industry about your company’s offerings.
Daily Egg - Neil Patel, well-known in digital marketing and “thought” circles, offers a number of ways to keep those SaaS customers.
- Raise your prices. The world knows that higher prices will always raise the perception of value. You’ll also be inclined to provide service for the amount you’re charging customers.
- Reexamine your original value proposition. You may have forgotten it, but we can guarantee your customers haven’t. There’s a reason they signed on with you in the first place. Keep them happy.
- Is your onboarding process still delivering as planned? What’s working and what’s not? What’s compelling? What’s motivating?
- Avoid customer service surveys and talk to your customers like they exist—in which they do. A survey is a simple omission that you’re too busy to make a person call, or to send a person email. Everyone likes a follow-up, and you’re no exception with respect to those things you deal with in life.
- Upselling is still a good way to bring in new business. However, upselling works only if you’re presently offering stellar services or product. When your customers get better stuff, you can look forward to getting more cash. And that is partly what you’re in business to accomplish.
- Customer engagement is a good thing. As such, your company should develop a plan to keep your customers engaged on a regular schedule. Don’t just call when you’re ready for an upsell, or if there are billing problems. Call them to find out how their software is working and if things are working out as planned. They’ll take note and respect you for it, which often translates into more business.
Healy Jones, a formidable blogger, offers an additional take on churn and the inability to hold on to SaaS customers. They see one of the biggest, and quite often, most overlooked cause of churn, is the annoying fact that credit cards will get canceled by no fault of the user. Those credit cards expire, and if you’re billing them, they no longer exist in a sense. Most companies don’t take this into consideration.
How Are SaaS Companies Smacking the Ball Out of the Park in 2016?
Your sales force, if established and disciplined, plays an important role in determining what your numbers will look like.
- 46% of all high-tech companies are experiencing their biggest growth as a result of inside sales. (Harvard Business Review).
- After contact, texting leads to a 112.6% higher lead engagement conversion.
Bridge Group – According to the Bridge Group, inbound marketing continues to play a major role in generating new leads. 44% of the inside sales pipeline is the result of inbound marketing. Traditional marketing continues to wind down.
Good Content Is Still King – Is Your Company Generating Any?
Demand Metric – Obviously thinks that content is still king. As such, content marketing costs 62% less that traditional marketing methods, but generates as much as three times the amount of leads. Their numbers indicate that at least 86% of B2B marketers and 77% of B2C marketers are investing in content marketing strategies.
Inturact – Offers some timely advice about content marketing. People open emails for a reason, since we’ve all been conditioned not to. It’s because something they valued caught their eye. Opened email rates, conversion rates, and social media engagement all rely on great content to engage customers.
Customer Renewals Are a Hot Commodity. Is your Company Running Hot or Cold?
According to Blog Drift, Zappos, a Las Vegas-based retailer is staying on top of their game by engaging customers with their customers support teams. Such customers are 5 x 6 times more valuable.
- If a typical loses 2 – 3% of their customers each month to churn, they must grow at least 27% to 43% annually to make up for the loss. Ouch! That hurts by any stretch of the imagination.
This places a slot of strain on acquiring new customers. Everyone in the SaaS business knows that a return on their investment may not occur for some time, so it makes all the sense in the world to focus on retention.
What Is It Costing You for Each Dollar of new AVC?
For Entrepreneurs states that for each dollar of new AVC from a new customer, $1.18 is spent in the effort. Companies with, greater than $2.5 million will spend, on average, only $1.06.
By any means, SaaS sales and marketing efforts are critical if the front door is to remain open. It’s only logical to assume that without new sales, there would be customers to market retention plans to. However, much of your focus as a SaaS provider should center around retention. That’s where the relevant numbers are that can keep your company profitable and out in front of the competition.
If there are any stats you have come across and would like to share, please just post in the comments below!