I've launched a few different businesses, two SaaS business and one software product.
In all three cases people bought it on day one or the first day after the trial expired. The first SaaS business I just posted on a few forums to come check us out. I was shocked when people purchased a yearly plan when we were still very much in beta.
However, it took two years before it started taking off, and then it suddenly did take off due to word of mouth. That was great, but also a double edged sword. Once better funded competitors arrived in the market, word of mouth went to them, and our sign-ups started to drop off.
To counter it, we did competitive upgrades. That was really our most successful campaign though it only worked online. We did advertise it in magazines but few people every signed up because of it.
With my latest SaaS, we had access to a huge opt-in email list. Lots of sign-ups on day one, and quite a few converted to paying customers once the trial ended. That said, having now done that for a year, we're still experimenting with different pricing and feature options.
I think the key to a successful SaaS business is to really understand your lifetime values, and how churn affects it. It can really help you define a successful marketing campaign.
Every model I've ever run on digital marketing shows that it will take approximately 5 to 12 months for it to start paying off. Add in your other overhead and it takes 2 years before you really start making money. But at that point, you will start making serious money.
To summarize, the most effective marketing tactics I've used are:
- competitive upgrades
- referrals credits
- e-mail marketing
- white label branding of the same service with a major player in your industry (yes, you'll cannibalize some of your other sales but can be worth it)
- google adwords
Once they are in, try to quickly onboard them. Once people start deriving value, churn decreases significantly.
Comments
I've launched a few different businesses, two SaaS business and one software product.
In all three cases people bought it on day one or the first day after the trial expired. The first SaaS business I just posted on a few forums to come check us out. I was shocked when people purchased a yearly plan when we were still very much in beta.
However, it took two years before it started taking off, and then it suddenly did take off due to word of mouth. That was great, but also a double edged sword. Once better funded competitors arrived in the market, word of mouth went to them, and our sign-ups started to drop off.
To counter it, we did competitive upgrades. That was really our most successful campaign though it only worked online. We did advertise it in magazines but few people every signed up because of it.
With my latest SaaS, we had access to a huge opt-in email list. Lots of sign-ups on day one, and quite a few converted to paying customers once the trial ended. That said, having now done that for a year, we're still experimenting with different pricing and feature options.
I think the key to a successful SaaS business is to really understand your lifetime values, and how churn affects it. It can really help you define a successful marketing campaign.
Every model I've ever run on digital marketing shows that it will take approximately 5 to 12 months for it to start paying off. Add in your other overhead and it takes 2 years before you really start making money. But at that point, you will start making serious money.
To summarize, the most effective marketing tactics I've used are:
- competitive upgrades - referrals credits - e-mail marketing - white label branding of the same service with a major player in your industry (yes, you'll cannibalize some of your other sales but can be worth it) - google adwords
Once they are in, try to quickly onboard them. Once people start deriving value, churn decreases significantly.
I want to add that we religiously use a format outlined here (also mentioned in the Constant Contact video):
http://www.forentrepreneurs.com/saas-metrics/