SaaS Marketing Sucks

Many Software as a Service companies struggle with marketing. Awareness, conversion and retention are challenges. In the past two weeks, I have been exposed to over a dozen SaaS companies through talks delivered for an incubator. I know why they are struggling.

SaaS marketing is highly templated, and everyone is using the same templates. What’s more, there is startling little differentiation regardless of the nature of the software. Finance SaaS solutions are marketed the same as Design SaaS or Procurement SaaS. There are tons of different flavors, but at the end of the day, it is the same ice cream cone. Once, I thought, law firms held the gold medal for parity marketing but SaaS now rules.

The root of this is clear, SaaS has a low barrier to entry. If you remember business theory, industries with low barrier to entry face greater competition. While competition should drive differentiation, in the SaaS universe, it has produced shocking (and boring) sameness.

SaaS companies like to say they are B2B companies, they are not. They are more like dry cleaners, locksmiths, massage therapists, florists, dentists, landscapers, and snow removal businesses (the last one is a nod to the fact I live in Quebec). To illustrate my point, here is a fun exercise. Imagine you are a locksmith or florist.

Now, further imagine how you would market that business. Except, you cannot discount your price or give anything away for free. How do you position versus the competition? How do you reach prospective customers? How do you become the #1 Locksmith in your area?

Earlier this year, I benchmarked competitors for a client and could not believe SaaS websites. Is everyone using same WordPress template? All are done in purples and blues to communicate, “professional”, yet, the iconography is juvenile with silly comic book graphics that are hardly professional.

All SaaS sites have the same layout: an overview; what we do; thought leadership pieces; sliding scale pricing schema; client logos; and a promotion or trial. Then there is that very annoying and unconvincing pop-up customer service avatar. In the bottom right corner is a chat bubble using a stock photo of a person, “Hi, my name is Julie, how can I help you?”

These sites are largely mundane sales sheets. Strategy is lacking, content safe. The authors of the site are too influenced by internal machinations without putting themselves into the buyers’ shoes. Customers buy for their reason, not yours. The SaaS customer journey is largely prescribed and laden with unanswered assumptions. It is what works for the company, not the customer, so is a big lost opportunity.

SaaS companies have a name, logo and an “About Us” writeup but that is not brand strategy. It is like they have ticked a few boxes then run to tactical marketing and sales. The result is a huge disconnect and chasm between strategy and execution. Customers plummet into a giant hole, never to be heard from again.

Let’s Reset

I am getting ahead of myself. Let’s take a collective breath, hit the basics and reset. SaaS gives users the ability to connect and use cloud-based software over the Internet. SaaS is an ever-evolving arena, with constant changes, advances, and setbacks in the software itself. The marketing opportunity is overly crowded and the sales cycle, short and impatient.

Peter Cohen, managing partner of SaaS Marketing Strategy Advisors, has said, “When [SaaS customers] need a solution, they do some online research, maybe ask a colleague, try the solution or watch a demo, and then buy. The whole process might take a few days, maybe a few hours. There’s no long, drawn out sales engagements, RFIs and RFPs, head-to-head “bake-offs,” contract negotiations, blah, blah, blah. Customers find it, they see it, they like it, they buy it. Done.”

The low price and low complexity of SaaS should provide for easy customer decision-making. Especially now given prospective customers are more sophisticated and assume that the software works well. What is missing is the second “S”. Service is where true differentiation lies, and it begins the first time a customer touches your business. That touch kicks off a three-stage process:

Acquisition: Earning new users

Monetization: Converting those users into a paying customer

Retention: Convincing the paying customer to stick around

The mapping of these three stages is pure strategy and should be an ongoing item on the agenda. It is the marketing strategy priority list, but instead SaaS companies love tactics. I cannot reiterate this enough…stop starting with tactics.

Why SaaS brands take their marketing into the tactical weeds and obsess over the wrong measurement outcomes is maddening but explainable. It stems from their technical roots. However, marketing should not start with retargeting, acquisition cost, Facebook response badges, MMR, CLTV, CLV, churn, multi-touch attribution analysis, linear attribution models, statistical algorithm implementation for attribution distribution, etc.

It needs to start by honestly and exhaustively answering four key questions:

What problem are we trying to solve?

Answer this question as a narrative with benefits to the buyer in mind. Do not list technical attributes. Talk conversationally on paper. Think of being on a Zoom cocktail party and someone asks you what you do, why your business exists.

What makes us unique?

This is not one or two things, it is a blend of what you offer and how you offer it. Remember, you need to master two businesses, Software AND Service. Your answer should be a robust bundle of good things.

Who wants or needs it?

This is the start of articulating buyer personas which I highly recommend. Remember that wants and needs are two different questions. Go deep here, challenge yourself to identify your most desired customer.

How do they like to be engaged?

This is where most SaaS marketers start…and flounder. You must answer the first three questions to understand where the brand will live and engage. Remember that customers must be predisposed to buy your service in the first place and a number of touches are required to warm them to you.

Take time answering these questions. Invite multiple teams in your business to do this, capture the discussion and compare the answers. It will blow you away and get your marketing moving in the right direction.

SaaS Marketing Today

Everyone agrees that SaaS marketing depends on the most helpful information. Your buyers compare several products and suppliers before choosing a platform. And that is why marketing exists, to help a buyer make the best possible decision. Is your marketing doing that?

Having worked with tons of professional service firms: ad agencies, consultancies, law firms, accountancies, I know most struggle to stand out. For years, I have advised clients to own their category. That is easier said than done. Still, intellectual capital and thought leadership that positions you as the category leader, contextualizes your offer right away. This accelerates marketing awareness, speeds sales, and ensures customers they have made the best choice.

I have already ranted about websites, but SaaS marketing is predominantly digital. Social media, email, promotions, content presentation are also super similar across SaaS businesses. This adds more tactics in search of strategy. From my experience, SaaS digital efforts look and feel like uncoordinated one-offs rather than cohesive brand experiences.

This reminds me of returning to my car and finding a flyer for tattoo removal under the windshield wiper. It does not apply to me, it has been intrusive, I am stuck getting rid of it, and it leaves a bad taste in my mouth. All things digital should take on a campaign mentality that has valuable and relevant call-to-actions for the prospective buyer. Instead of putting out a gorgeous 5-course meal, SaaS marketers are peppering tons of spam (if you get my drift).

Next up is pricing. Daniel Nimer said something years ago that absolutely applies to SaaS businesses, “The purpose of pricing is not to recover cost but to capture the value of the product in the mind of the customer.” Blow that quote up into a poster and tack it up on the wall in front of you. What is your product’s value in the mind of the customer?

I have presented at colleges and universities. Segmentation linked to pricing is not being taught well or taught at all. That is unfortunate because SaaS companies survive and thrive based on proper pricing. Ideally, pricing is tied to customer personas. When you visit a SaaS company’s website, you see ubiquitous and similar types of pricing schema. I have seen Free, Pro, and Unlimited or Startup, Business and Enterprise. You get the idea.

That type of pricing is “inhumane”. There is no humanity in that pricing. You are stuffing generic groups of beings into your Excel spreadsheet. What is the pricing for Bob? For Rasheeda? I am being a bit silly, but you get the drift. SaaS companies are the least human when it comes to brand and marketing communications. Inject humanity into your pricing and its communication. Capture the value, don’t recover cost.

Another way to think of it is this, “Quality is remembered long after the price is forgotten.” That is the Gucci family slogan. Right now, the entire SaaS category has customers thinking of price first. That is a fast way to commoditization. Pricing can be a differentiator.

This leads to another common tool in SaaS marketing. Promotions and trials have become a narcotic. The entire SaaS industry has trained customers to expect some kind of deal and often. This is analogous to retailers who have discount Tuesdays. Consumers will wait for that day of the week to shop.

Promotions and trials can erode the brand. Why do you go to all the trouble of putting out a rack price only to chop it down when you encounter a bit of resistance? It is not your price, it is how you are packaging and presenting your offer. On a side note, the promotions I have seen from SaaS businesses (especially on LinkedIn) are super cheesy. More Herb Tarlek than Ralph Lauren. There is nothing professional in them, no sense of comfort or trust. Worse, there is no marketing innovation. It is like saying, “buy one, get on free.”

Get Rid of Sales

The goal of SaaS marketing is to have the product sell itself. Famous retailer, F.W. Woolworth said, “I am the world’s worst salesman, therefore, I must make it easy for people to buy.” When I say, get rid of sales, I am joking but not kidding. That is because, a sale is not something you pursue; it’s what happens while you are deeply immersed serving the customer.

That takes great software, amazing service, and content so valuable and relevant that barriers to sale are removed. SaaS marketing tools and techniques exist in great numbers. We even know what commonly works, yet, in practice most SaaS brands look, sound and execute in the same way. To be blunt, it is boring and boringly repetitive.

It is time for SaaS marketers to come off the high horse so you can really gallop. You more like a landscaper or locksmith. That is valuable and accurate context. Once you accept that notion, you can answer the 4 key questions honestly. Remember, you are both Software AND Service. Maintain a strategic mindset, avoid the tactical weeds.

Then get executing. Avoid boring, build cohesive and compelling campaigns, and know and understand the customer so well that your offer sells itself. The best advice I can give is, break free of the templates.

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