The marketplace is packed with SaaS solutions for file storage, project management, finance, and everything else you can think of. Total global SaaS revenue is reported to be at $80 billion, and is set to grow beyond $143 billion by 2022. How do you grow a SaaS business with this kind of competition? 

More importantly, how do you sustain your SaaS growth for the long-term? 

In this article, you will learn:

  • The role of Annual Contract Value (ACV) in shaping marketing strategy
  • Why retention is so critical, and ways to improve it
  • How to shape your tech stack to boost and sustain growth

Without further delay, let’s get stuck into my three pillars of B2B SaaS growth marketing…

ACV for SaaS marketing

Source: Unsplash

1. “Not all SaaS is created equal”

SaaS growth marketing is too often condensed into a simplistic set of tactics. But there are fundamental differences in approach for different types of SaaS. In my view, one of the most critical variables is Annual Contract Value (ACV). SaaS products are roughly broken down into two camps:

  1. Low ACV: Hundreds to single-figure thousands £ per contract per year
  2. High ACV: Hundreds of thousands to several million £ per contract per year 

Caveat: ACV is relative, and some people might have a different view on what constitutes high and low. However, you can see this as a useful distinction for the purpose of this article. 

The lower ACV products tend to be “self-serve”, whereas enterprise-level (high ACV) SaaS products tend to be “non-self-serve”, i.e. customers need demos, integrations, and guidance by sales & support. Lots of B2B SaaS brands have a sliding scale of functionality: from basic, to professional, to enterprise. From lower through to higher ACV – in relative terms.

This means a mix of ACVs, and a mix of target customers. 

Some products remain self-serve through their range. For example, Buffer and Ahrefs: two SaaS products in the marketing space. An enterprise-level Buffer Business subscription is $99 per month ($1200 ACV), and an Ahrefs Agency subscription is $999 per month ($12,000 ACV). Buffer’s highest plan is relatively low ACV, whereas Ahrefs’s big-league product demands a chunky investment. Yet both are self-serve. 

But more typically, the highest ACV SaaS products are non-self-serve. The customer must contact the team to discuss their needs, run through demos, and implement the solution – often with integrations, and perhaps user training. Examples of this include products by Salesforce, Adobe, and Oracle (sidenote: Oracle currently runs an 8-person ABM team focused on £1 million + contract values).

 

How does ACV impact SaaS marketing strategy?

It’s quite simple, really. A higher-ticket item demands more consideration. This means it has a longer sales cycle, containing more touch-points.

We all know that B2B SaaS has a slower funnel than B2C eCommerce, but we must recognise the internal variations – which reflect ACV. 

Low ACV SaaS has a broader pool of prospects, and due to the product’s simplicity we can set up a Free Trial. This lends itself to a channel-focused marketing strategy. We rapidly test different digital channels and double-down on the most efficient: those that drive the most signups to a Free Trial or “freemium” model. The barrier to entry is low, so we can get as many people active in the tool as possible. 

This process involves automated sequences. Due to the smaller profit margins, we need to build a “hands-off” on-boarding process. This should be automatic and usage-focused. Trial signups are cool, but trialists won’t convert to paid customers unless they experience the benefits of the product.

Those who do show regular engagement can be considered as product qualified leads (PQLs)

We track in-product usage with tools like Mixpanel, Segment, or Amplitude. These are hooked up to automation tools like Autopilot or Intercom to deliver custom messages by email or within the interface based on the usage levels and other behaviour-based triggers.

Additional reading: We saw fascinating results after an experiment with a Kurve client: a self-serve B2B SaaS. As I outline in my article for Unbounce, we tested driving traffic for direct signups vs. eBook & email nurturing sequence.

We found that direct signups dramatically outperformed the nurturing sequence. The conclusion was that with such a low-risk offer, users were ready to test the product immediately.

 

What about marketing high ACV SaaS?

Nobody will sign up to an enterprise-level SaaS tool costing £100,000 per year on a “buy now” page of a website. And with the fact that most high ACV products aren’t self-serve, we usually can’t drive web traffic to an automated Free Trial sequence. Considering the levels of consideration needed for such a big investment, high ACV B2B SaaS sets the perfect conditions for account-based marketing (ABM)

As you probably know, ABM is done by defining an ideal customer profile (ICP), identifying the best possible customers (and their decision-makers), and building a content, advertising, and outreach strategy to get their attention. Channels are used in ABM, but it’s less about which channels drive the big numbers; more about distributing relevant content in places where our ideal customers hang out. 

I’ve seen a lot of high ACV (non-self-serve) SaaS businesses “spray and pray”. They pump money into various marketing channels with little to no return. The poor results are because the product is so niche – so advanced – that the vast majority of budget is wasted by targeting people that could never become a customer: or targeting legitimate prospects in a way that will never result in a conversion.

ABM targets must build deep confidence in a product’s value. They need to be educated, nurtured, and guided. Whilst this has relevance for low ACV SaaS, it is absolutely fundamental for high ACV SaaS. 

Key takeaway: The complexity and cost of the SaaS solution dictates our marketing strategy. A high ACV product will often need manual on-boarding, customisation, and integrations. Potential customers tend to speak to multiple stakeholders before investing in the software; alongside doing due diligence and assessing case studies, planning scalability, and more.

For low ACV products, the emphasis is more on the volume of trial signups. For high ACV products, we search and target ideal customers like a sniper.

SaaS Retention

Source: Unsplash

2. “Retention is equal to acquisition.”

How often do you buy a sofa, a TV, or a bicycle? Not very! This means that for B2C eCommerce, retention isn’t quite as important as generating fresh sales. But when it comes to SaaS, users are paying subscription fees for a service every single month.

If they don’t realise true value quickly, they will churn. 

When the customer acquisition cost (CAC) outweighs the customer lifetime value (LTV), the business is in trouble. The longer a company can keep hold of a customer, the better return they get on the acquisition investment.

If I pay £10 to acquire someone to my SaaS product for £5 per month, it will take two months before I break even. If 75% go elsewhere by month two, I don’t have a sustainable business. And when we’re talking about such small sums, the volume also needs to be high to grow a viable venture. 

There are 66 million people in the UK. But if we’re targeting large businesses (250+ employees), there’s a pool of just 8,000. When targeting medium-sized businesses (50-249 employees), that number rises to 35,000. Even if the product is relevant for them all (note: very unlikely), this is still a small market size. 

With this in mind, we must do everything in our power to keep B2B customers. They are not disposable

Customer success is critical for B2B SaaS. This involves a proactive account management and nurturing to ensure customer retention (plus cross-selling, up-selling, and account expansion to create negative churn). For low ACV self-serve SaaS, this is likely to be automated – but not always. The in-product analytic tools I mentioned are critical to help us identify patterns of behaviour that indicate a “soon-to-churn” customer. We can then intervene to secure them, before it becomes too late.

Key takeaway: “Acknowledgement of a problem is the first step towards its solution.” Retention is what makes SaaS companies succeed. You need to identify friction and flight risks, and be proactive to keep people on board. SaaS companies are in a constant features war (and UX war) with competitors, and need to deliver consistent value over time to build loyalty. 

tech stack for saas growth

Source: Unsplash

3. “Never underestimate the tech stack.”

Ironically, SaaS companies often underestimate the cost and complexity of integrating enterprise-level kit. For example, we recently worked with a client who uses Pardot for marketing automation, but not Salesforce CRM. Instead, they were using Pipedrive due to its simplicity. Due to costs and API complications, it is very impractical to hook these two systems up: thereby limiting our data-led tactics.

We need to stitch together data from performance marketing channels, technographics and firmographics, in-product user behaviour, and much more. To get a full-funnel view of acquisition, activation, and retention – and to execute the right actions – we need systems to talk to each other.

This is a challenge that we overcome at the earliest possible stage, because it directly affects acquisition, onboarding, and retention capabilities. It’s also critical for scaling a business.

The tech stack changes at different levels of maturity. A company in its infancy will use different tools as it progresses through A, B, and C funding rounds. It’s better to evolve the tech stack over time, rather than gunning for enterprise-level software too early. Without a wealth of traffic data or a huge lead volume, getting useful insights will be challenging – and not statistically meaningful.

This makes an early investment in “heavy machinery” difficult to justify and potentially damaging. 

Key takeaway: Plan the short-term, medium-term, and long-term technology stack. Remember that it isn’t always efficient to go overkill on a solution with a view to realising the value later. Plan a tech stack roadmap which sets out options, obstacles, costs, and milestones. 

 

Summary

So, let’s wrap up my three rules for B2B SaaS growth marketing:

  • Not all SaaS is created equal
  • Retention is equal to acquisition
  • Never underestimate the tech stack

The world of B2B SaaS is an exciting place to be. The pain points of growing a SaaS business are often oversimplified; leading to generic catch-all advice. The fact is that every SaaS product is different, and the growth strategies depend on a variety of factors. Without going into too much tactical detail, I hope these three rules will shape your mindset and allow you to ask the right questions during early growth.

Kurve has built a proven track record for growing SaaS businesses with digital channels. To speak to Oren Greenberg about what you can achieve, get in touch today.

Phone: +44 207 097 5139

Email: [email protected]

 

 

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