SaaS product promotion and customer acquisition guide!

Today, let’s talk about how to achieve rapid and large-scale promotion of SaaS products . Based on our own more than two years of practical experience in building an HR SaaS platform, we will share our experience of climbing out of the pit.

Looking at the current global market, the customer acquisition methods of SaaS products are similar, and manufacturers give priority to methods with high conversion rates based on their business development strategies. Analogizing to the "individual combat" and "cluster coordinated combat" in military history, we pursue the threshold of input-output ratio to the extreme.

01 The key to individual combat is the benchmark effect

Those who are familiar with the history of war must know that individual combat and group coordinated combat have appeared in many classic battles. They are two very different styles of fighting, which are flexibly used by commanders as the war enters different stages.

SaaS products that serve the B-side are more complicated to promote than products for C, and they grow more slowly, making it almost impossible for them to grow exponentially overnight. Having been in many product communities, I found that B-side product managers are relatively reserved when talking about the topic of growth. They also know that it is impossible to be as glorious as C-side products, where they can reveal that "after planning fission activities, the number of users has increased by millions." Customers of the B-end platform are won one by one, not in groups .

In the HR SaaS field, the main way for leading companies such as Beisen, Dayi, and Moka to acquire customers is to visit corporate customers through KA (key account managers), focusing on screening well-known companies in the industry, establishing a benchmark image by serving well-known companies, and then using the trust endorsement brought by the benchmark effect to reduce sales costs for other customers in the same industry.

Before 2013, Beisen mainly served small and medium-sized enterprises. As the small and medium-sized enterprise market is large, it is natural to choose this customer group. However, what really enabled Beisen to develop rapidly was its shift to serving large corporate clients after 2013. Small and medium-sized enterprises have a short survival cycle and low stability, and the product R&D costs cannot be spread out on a marginal decreasing basis. Considering the demand for data migration to the cloud and the stability of payment, Beisen's shift to serving large corporate clients is a smart decision.

When it comes to the development model of SaaS business in the enterprise service market, the benchmark for reference is still the European and American enterprise service markets. In terms of cognition, the enterprise service market in the United States is mature, customers have a clear understanding of processes and software , and customers also have professional engineers who understand software. It is relatively easy for manufacturers to enter the market. However, our domestic understanding of SaaS is still in its early stages, and the education and service costs of manufacturers are very high.

In terms of customer needs, SaaS products in the United States are very segmented, and manufacturers only need to deepen single-point products. Other customer needs can be met by other manufacturers' products. However, domestic customer needs are very complex , and manufacturers must be customer-centric.

For example, when we are doing HR SaaS, customers say that they cannot see the data and reports, so we have to make data dashboards and BI. If there are more complex requirements, we may also need to build a platform to connect the upstream and downstream links of the human resources management process, which makes the cost of software development very high.

It is difficult for small and medium-sized enterprise customers to afford such a high average order value, so domestic SaaS vendors are now taking two different business development paths. They first develop PaaS for large enterprises, then refine high-frequency application scenarios and launch standard versions of applications to the market that can be generally applied to small and medium-sized enterprise customers in the industry . Another way is to directly develop vertical applications, select core links outside the entire process, and make breakthroughs in a single point. This model can be introduced into the market by referring to the online promotion methods of to C products.

02 Cluster operations test the team's digital and refined operations of traffic

Only by providing the best quality services and the best value to customers can we achieve long-term development. As mentioned earlier, whether Beisen serves small and micro customers or medium and large customers, it actually involves one issue, that is, how well the product fits the market.

In the early days of the enterprise service market, everyone was working with small and micro businesses because their demands for products were simple, but they still could not achieve sustainable development. We also felt this deeply when we were working at Tuicaifa. Every day, there were more than hundreds of new corporate customers online, most of which were small and micro businesses. It was difficult to convert them into paid customers, and they could not be expanded continuously.

Therefore, in addition to product fit with the market, whether the market itself is OK is also important. Only in a good market can business achieve scale growth. For application-level companies like us, it becomes particularly important to build a scalable and replicable growth system.

When we first started Tuicaifa, we planned to take advantage of the information dividend and collect all the first-hand and second-hand information on SaaS product promotion that could be found on the market. We conducted an internal inventory of promotion methods and decided on them one by one through demand review. The final conclusion is that the searchable information on the market has low practical reference value, and most of the promotion of SaaS products is still focused on explaining the SaaS products themselves or operations, which is irrelevant.

For example, when it comes to sales management software CRM systems, we often have a misunderstanding that as long as we give it to the sales team after purchasing it, the company's performance will be greatly improved. This is a very superficial view. The correct view is that when building a sales system and team, the entire process and system should be sorted out and constructed first, and then application tools should be used to complement them .

In other words, with a mature management system, the recruitment and onboarding period for sales personnel is shortened and the replicability is highly significant, so overall performance will definitely increase significantly. Therefore, when promoting the CRM system, we need to have a clear positioning, what value can be brought to customers, and how to highlight this key information in the publicity, so as not to cause customers to misunderstand, have too high expectations and be disappointed, and then abandon the product, and lose the motivation to renew their subscription in the second year.

Collaborative cluster operations are recommended when promoting SaaS products, and you should not rely on just one method of acquiring customers. We often compare Maketing's customer acquisition through phone calls, PR, etc. to the "power of the air force", and the corresponding ground force is the sales department .

Of course, each enterprise has a different form and the resources invested in this regard are also different, but whether the two can cooperate perfectly and become a powerful team is the key to defeating competitors. Therefore, I do not think that these two should be separated, but should complement each other.

03 We focus on ten sets of customer acquisition indicators and emphasize conversion effects

When we are doing customer acquisition and promotion, we will divide the overall process into two lines: internal and external, involving the core indicators of the three departments. There are six external indicators to focus on, namely, natural inflow registration volume, effective lead volume, lead conversion rate, channel return on investment (ROI), viral coefficient (word-of-mouth communication), and customer churn rate.

The registration volume is quite normal, with a higher value than PV/UV, and is the funnel we focus on as the first level. For enterprise-level SaaS with trial/experience options, registration volume may be the most important metric. Whether it’s through campaigns, content, or SEO, our goal should be to increase signups.

Ideally, users learn about the product on their own, use it regularly, and find enough value in it to convert into paying customers. There are two main ways to increase the number of registrations: one is to expand the source of traffic; the other is to increase the registration conversion rate.

Valid leads can be divided into MQL (M is market-verified leads), SQL (S is sales-verified leads), and PQL (P is product-verified leads). PQL is more commonly used. We focus on PQL because it means that users have achieved the expected results by using the product, and the next step is to approach potential customers for paid conversion. The PQL indicator is reflected in the frequency of function use, duration of stay and number of functions used.

The lead conversion rate can be presented through the funnel model, but it should be noted that user segmentation may lead to different conversion rates. Do not give a unified overview, as it can directly affect sales revenue.

ROI is a measure of the return on investment of advertising channels. Channels can be divided into organic traffic channels (like owned media) and paid traffic channels (like SEM). As a marketer or operator, we can measure the ROI of each channel through indicators such as traffic, registrations, number of completed customers, and transaction amount brought by different channels.

The users of our products are mainly corporate HR. We must place advertisements online and offline, but as a startup company, it is impossible for us to place advertisements everywhere. How to do it smartly is a topic worth studying. Wide advertising is a practice when we are wealthy. When we have no money and no budget, we can only make breakthroughs in precision.

The operation team tried many new media platforms at the beginning, and finally, after a period of experimentation, they chose Zhihu, Human Resources Forum/Tieba, and Baidu Q&A to build a content output system. Relying on high-quality online content to attract traffic, they ensured that the daily platform registration volume grew from 0 to hundreds. This was a good start. Later, another product we incubated, Blue Collar Delivery, also continued to obtain effective leads from this channel.

Word-of-mouth marketing (viral coefficient) is an unbeatable force, and if existing customers can help us acquire new customers, growth will be exponential.

The rapid development of early companies such as Dropbox and Slack was inseparable from the spread among users. It can be said that virality is the dream of every enterprise-level SaaS startup, but this also depends on the product form. In connection with the first part of individual combat, this approach was also used to establish word-of-mouth effect through benchmark customers.

The normal customer churn rate is generally maintained at 5-7% per year. SaaS companies that serve small and medium-sized enterprise customers may have higher customer churn rates.

But SaaS companies targeting large enterprises should strive for lower, even negative, customer churn rates. for example:

• Recommend customers to purchase value-added services
• Help customers achieve growth and upgrade to higher levels of service
• etc……

If a company has a 5% monthly churn rate, but the remaining 95% of customers are successful with the product and even purchase additional services and increase revenue by 5%, then this month's revenue will be 110% of last month's.

Achieving external indicators is to cooperate with internal transformation. The purpose of everything is to achieve product growth and promotion, so as to bring healthy and sustainable revenue and profits to the company. Internally, we focus on four sets of indicators, namely lead generation rate, number of active users, net promoter score and renewal rate.

Why mention LVR? Because it is only a matter of time to convert a certain percentage of PQL (or SQL, etc.), LVR can be a good predictor of future sales performance.

Once we know the lead conversion rate, we can reversely calculate the number of leads required based on the revenue target, but this number may not be realistic. If the quality of leads remains constant, you can use the average sales cycle to predict new sales revenue in the coming months .

For example, if 1,100 leads were created this month and 1,000 qualified leads were created last month, the LVR is increasing at a rate of 10% per month.

The number of active users and net promoter score are common indicators that assess the health of a product by measuring user satisfaction and loyalty.

Generally speaking, for small and medium-sized enterprises with low average order value, manufacturers should pay attention to the customer renewal rate, that is, the number of companies renewing their contracts; for medium and large enterprises with higher average order value, manufacturers should pay more attention to the amount renewal rate, that is, the size of the renewal amount .

For long-term development, SaaS companies should only renew their subscriptions for one year at most.

Having said so much above, it is not to share successful experiences. The promotion and growth of our own products is still in an exploratory stage. It cannot be said to be very successful, but only slightly effective. I hope to exchange experiences with my friends and work together to promote more attention to this topic, get more solutions and reduce losses.

Author: Mr. Dajinggai

Source: Eight Forty