StartupTalky

Tag: Customer acquisition

  • How to acquire your first 10 SaaS Customers?

    Are you occupied in the process of launching your new interesting SaaS product?

    Being part of this dynamic world makes it more tricky to attract customers to your newborn SaaS tool or a Startup.

    You can’t wait for your early birds to arrive on their own for your new creative SaaS Product.

    Getting the attention of initial customers to your business is ultimately an Art. And anyone can become an artist with proper guidance.  

    Don’t have to worry if you don’t know how to get your product in the eyes of your customers because, in this article, we are going to reveal some tricks, some steps, and ultimately you will learn how to acquire your first 10 SaaS customers?

    Before we start, let’s take a quick look at What does this term SaaS means?

    What is SaaS?

    SaaS viz. Software as a Service is an online cloud-based service where users don’t have to bother downloading any software on their device to use that tool or product; instead of this, they can easily work with the software on the browser.

    What is SaaS?
    What is SaaS?

    Plus, in this cloud-based service, Software developers have the secured access and hosting responsibility of the servers, information, database, and coding that conclusively created the software.

    Another good thing is these Business tools cut off the painful worries of payment of monthly installments or any further updates.

    SaaS tools make the job easy, flexible, and economical for everyone out there.

    Now the question arises after getting and launching the output of your creation, invention, and hard-work, where and how to find initial customers that not only purchase your services but also recommend others to opt the same.

    7 Helpful Strategies for you in acquiring your initial customers

    Strategies are the most effective pillar for a successful business and if followed sincerely, then strategies can also provide foolproof consequences.

    Do Research on Successful SaaS Owner’s Experiences

    Before taking any further step for promotion of the product, do some research on Successful SaaS owners about how they launched their tool, how they promote it, how they gathered the concern of their potential customers, etc.

    Here comes a plan, you can always find your customer by searching for online complaints people are facing, and your product is solving.

    Twitter, Quora, Reddit, Facebook try to cover up every possible platform where people are continuously looking up for some work that can be fit into their needs.

    Try to answer their queries and talk to them about your product and perks offered by the tool.

    Attention-seeking Sales Copy

    After knowing the problems of people, write a well descriptive and attention-grabbing Sales copy of your tool and share on the platform where you can find some customers.

    Don’t forget to write some common questions, so as soon as somebody raises a query, your article will pop-up to grab their attention and make them communicate with your team regarding the product.

    Once you get them to your team make sure that they remain interested in your tool and your SaaS and also ask them if they would like to be in touch so you can send them updates of upcoming tools.

    By this, You are achieving two targets in a single arrow, means your research will not be hectic, and you are getting a list of prospective buyers.

    Launch an email list using your research List

    To make sure the guaranteed sales of your product, try to launch it via an email list.

    You initially can send people whom you’ve listed previously and who can be your potential customer.

    A successful launch sequence involves adding value to your potential buyers in the initial few emails; then convince them to buy your tool as soon as possible.

    You also can use the following tricks to make your launch more effective and profitable:

    • Send the first two Emails with a brief informative description explaining the reason why they should consider you and your tool.

      Here you can mention your background, story of your startup, and many other things. Make it suspenseful and exciting, so Customers will wait for your next email.

    • Once successfully build an audience who is totally into your subject, start talking about your product. Don’t boast too much.
      Make it for a professional, impressive, and reliable tool that is solving their issues and must give a shot.
    • Here comes the Showtime. Time to launch the product. Keep it comprehensive by telling your audience that your product is available for purchase now.
    • The last email must consist of strong confidence in the tool and a compelling message at the end for making buyers urge to purchase the product.

      Show your subscribers that your product is the perfect solution to their problem and your services will never let them down in any situation.

    Take help from closest Network

    For promoting your SaaS tool, you can take the help of your closest network. Try to communicate with the people you know and the next chain with the people your fellas know.

    More close network will help in gaining more valuable information with your prospective clients

    Try to find out the problems they’re confronting.

    Convey to them your idea about your product and its features (try to sound like an empathizer, not a salesperson).

    Do your best to convince them why and how your tool fits into their equation problem and how profitable it could be for them.

    Once they’re convinced, you get a new client.

    Free Trial offer for early comers

    People love acquiring things for free. It might sound a bit unfavorable to you but in the beginning, Bringing more and more customers is your prime concern rather than money.

    When people come to know that they have an opportunity to acquire a product for free being an early comer, which is solving their issues, they’ll never take a step back.

    Offer them a free trial in which they can explore the product and its features. This free trial will help you in creating a strong customer base, and also establish your product in the market.

    A free trial is a scheme that attracts the traffic and attention of the tool seekers.

    Special Perks to Initial Customers

    Grabbing the attention of prospective customers is not an easy thing.

    But who would not lose their grip when they know that being the initial customer they can enjoy some of the reserved perks of the SaaS product.

    You can offer perks like lifetime access to the tool in minimal subscription fees, some bonus premiums in the tool, availability of less subscription in upcoming products to early birds, etc.

    Offer them exciting deals that are utterly irresistible for them.

    Affiliate Marketing of your Product

    For getting more subscribers, Affiliate Marketing is a boon for your product. Here you have to pay only for real users, not for the audience gathered.

    Lower the risk, Higher return. Great deal.

    Outsourcing is one of the most frequently used options that will help you with effective affiliate marketing. People will bring audiences for your product, and you will only pay for those who buy your tool.

    Plus, it’s a good thing in SEO, as affiliate marketing brings traffic to your site with content and backlinks.

    With this, you can also drive influential bloggers and get them to write about you and your product. Real money making offers is the thing that they never refuse and will give you the best magnetic content to attract customers for your tool.

    What is the other way in which Affiliate Marketing works?

    Step 1: Personal URL is the primary step of affiliate marketing to bring more traffic to your site.

    Step 2: Marketers can use paid traffic by using Podcasts, YouTube videos, cold emails, AdWords, blogs, etc.

    Step 3: When interested one becomes your paying customers, affiliate marketers get their payment.

    Now finally, you know all the foolproof strategies that you can use for acquiring your initial customers.

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    Conclusion

    So after hearing out all the foolproof strategies and experiences of some SaaS experts that successfully acquire their initial customers.

    At first, it will take lots of efforts to send out information about your tools to a large group of audience but once you start analyzing and summarising the need and problem of the users it won’t take that long for you in the future to get more and more customers to your SaaS.

    There are so many ways to bring customers at the primary stage of service, but a more comfortable choice can make it a more easy and economical way to acquire target audiences.

    Frequently Asked Questions (F.A.Q)

    What is SaaS?
    SaaS is a cloud-based online product service where users can directly use a tool on their internet browser only, they don’t have to download any software for working with different tools.

    Why choose SaaS?
    Cloud-based SaaS solution helps in improvising the quality of service with browser extensions, better user experiences, great robust functionality, and cost-effective for your business.

    Where can you find your prospective customers?
    You can always find your potential clients on social media communities, Quora, Reddit, and many other websites.

    How are SaaS tools useful for organizations?
    SaaS solutions can help an organization perform their jobs more effectively and efficiently by using different creative software. SaaS software can also help with inventory management, finance management, infrastructure, and human resource management.

  • How to Track Customer Acquisition in SaaS – SaaS Customer Acquisition Strategy

    We’d all love to drive Bentley’s and live in mansions overlooking the beach, but not if it means spending the money your family relies on to buy food. Similarly, every business wants to get as many customers as possible, but not if it means going broke in the process. In order to achieve that balance, a crucial metric for businesses (especially startups) to track is customer acquisition cost (CAC).

    Achieving sustainable growth for a SaaS company means constantly acquiring new customers and keeping them around for as long as possible. While this may sound simple, it can be incredibly challenging to find new opportunities for growth and customer acquisition in the crowded SaaS industry. If you’re too cautious about your CAC, you will likely be missing out on customers and future revenue. Yet, if you spend too freely, you won’t be profitable and will likely end up in the dead pool.

    This article will walk you through the saas customer acquisition strategy.

    Also read: Boonbox- Taking Online Shopping to Rural India

    What is Customer Acquisition Cost?

    Put simply, customer acquisition cost (CAC) is – you guessed it – the cost of acquiring a new customer. To compute the cost to acquire a customer, CAC, you would take your entire cost of sales and marketing over a given period, including salaries and other headcount related expenses, and divide it by the number of customers that you acquired in that period.

    It doesn’t take a genius to understand that business model failure comes when CAC (the cost to acquire customers) exceeds LTV (the ability to monetize those customers).
    A well-balanced business model requires that CAC is significantly less than LTV:

    Example of balanced business model
    Well Balanced Business Model

    Here are some typical industry standard cost of customer acquisition values, the amount of money each company spends on average on marketing and advertising to acquire just one new customer:

    Travel: Priceline.com – $7
    Telecom: Sprint PCS – $315
    Retail: Barnesandnoble.com – $10
    Financial: TD Waterhouse – $175

    Relevant read: 8 Ways to Toggle SaaS Customer Retention

    How CAC works?

    Let’s say you run a company called ABC, which sells movie inspired accessories.
    From June to December 2019, you spent $100,000 on sales (mainly sales team salaries) and marketing (Google ad spend, Facebook ads, content creation, marketing team salaries).
    In that same time frame, you made 10,000 sales.

    calculating CAC
    CAC Calculation

    Dividing $100,000 by 10,000 gets you 10. So, for this time period, ABC has a CAC of $100.

    Relevant read: Kapture CRM – A Single Platform to Manage the Sales and Service Teams

    Why Is CAC so Important?

    Understanding CAC is critical for businesses of all sizes. However, it’s particularly relevant to startups that are in the early stages of scaling up or trying to woo potential investors. Once you know your CAC, you can evaluate the cost of growing the business and the value each new customer brings.
    To acquire new customers, most SaaS companies devote a substantial amount of time and money before they see a full return on their investment. Examining just how many months of revenue from a customer are actually needed to recover these costs becomes essential as your business grows, as it may take much longer than you think for your company to recover CAC and actually begin to profit.

    Graph of revenue and cost

    Tracking Customer Acquisition allows for a better control of your spending and makes sure you’re being profitable on specific channels.

    Also read: Must-Read Startup Books For Students

    Why is SaaS Customer Acquisition So Difficult?

    The average length of the sales cycle for a SaaS company is nearly 3 months. That’s quite a long time to be chasing someone down and asking them to buy something from you. If you consider some of the factors that lead to this extended buying process though, you’ll see that it makes quite a bit of sense for customers to take their time:

    High Cost

    SaaS solutions aren’t usually very cheap. Even with less expensive tools, customers must factor in the recurring charges that go along with the SaaS subscription-based payment model. This can add up to be a significant amount of money for some customers.

    Privacy Concerns

    Because SaaS solutions are based in the cloud, new customers can sometimes be reticent about allowing an unknown tool process their (or their customers’) personal data on external servers without learning more first.

    Complexity

    Most SaaS tools are built with deep sets of features and complicated use cases to solve complex problems for which customers may not even know the extent of their needs.

    Too Many Options

    The SaaS industry has exploded in the past 10 years, meaning customers have usually have several different choices when choosing a SaaS solution.

    All of these factors act as barriers to customer acquisition. This is why SaaS customers require an extra level of care and education (or nurturing) to incrementally move them towards a purchase decision

    Relevant read: Tally Dekho – A simple Tool for Accounting

    How to Track Leads through the Stages of SaaS Customer Acquisition?

    There are 4 unique stages that leads go through before making a purchase and becoming SaaS customer:

    Awareness

    Prospects first become aware of your business. This is usually the stage in which leads find you through a blog post or other content. Often, they’re not looking for a solution at this stage, and they may not even be aware that they have the problem your product solves.

    Engagement

    Potential customers start regularly consuming your content, subscribe to your newsletter, and maybe even download an eBook or other resource from you. They are more aware of the problem you solve and begin questioning whether they need a solution.

    • Exploration: After learning that they have a problem and need a solution, prospects will do research on their options. This usually means visiting your pricing page, reaching out to sales, requesting a quote, or signing up for a free trial or free account to test out the product.
    • Conversion/Retention: Once prospects have fully explored all of the options you offer, they sign up for the plan that’s right for them and become a paying customer. Now it’s all about making sure they succeed with your tool and continue to be an active user.

    Also read: The 10 Best Tools for Graphic Designers

    Things to Consider

    While tracking Customer Acquisition may sound simple at first, here are just some of the things you’ll need to consider:
    1. Ability to clean the data whenever necessary
    2. Ability to cater for your own business needs (targeting Accounts VS Users)
    3. Ability to integrate with other software (e.g. CRM, Payment Processors)
    4. Ability to manage all the Ad Platforms you use
    5. Ability to monitor all costs (CAC calculation)
    6. Ability to choose and switch between Attribution Models

    Relevant read: List of Top Startups in Bangalore

    Strategies for Reducing Customer Acquisition Cost

    If your CAC is higher than you’d like (or can afford), something’s got to change. Here are a few strategies you can use to reduce CAC and improve your bottom line.

    1. Conversion Rate Optimization

    Optimizing your website can increase your revenue and lower your CAC by making it easier for visitors to convert. This is particularly important for e-commerce sites that might be losing out on sales even if their traffic is high.
    Check that your site loads quickly, displays properly on mobile devices, and that your checkout process is simple and bug-free. You should also perform A/B testing on your landing page copy to find out what works best for your target market.

    2. Using influencer marketing, even for B2B

    The phenomenon of influencer marketing doesn’t start and end with Instagram models, especially not in the SaaS space.
    An “influencer” is simply someone who can lend their credibility, and in doing so boost an organization’s reputation. In the B2C world, celebrities will often sell just about anything.
    The audience for B2B influencers is different. Influencers have a reputation, so they won’t be promoting junk. They will seek to partner with superior products that align with their brand and are disrupting their space.

    3. Reward Referrals

    If you can get consistent referrals from existing customers, your average CAC will drop significantly. Say, for instance, a customer who cost you $15 to acquire refers two new customers. This brings your CAC down from $15 to $5 because you landed three new customers for the cost of one.
    Implement an attractive referral program that gets more customers to spread the word about your business – not just because they enjoy your product or service, but also because you’re offering a referral bonus to sweeten the deal. This could be something as simple as a discount code for their next purchase or a temporary upgrade to your premium service for referring new users.

    4. Building product-led growth into the marketing strategy (the flywheel)

    Startup unicorns have built insanely good products that catch on faster than any marketer can sell them. What does a product-led growth campaign look like out in the wild? Take Expensify, for example. As part of their marketing efforts, they directly targeted people who submit expense reports. Their slogan was “Expense reports that don’t suck.” Instead of looking mainly at buyers, they tried to hone in on a more specific user pain point.
    The Slack platform allows users to invite others into their workspace. Dropbox has a functionality where you can add a new user to unlock more space. The Ice Bucket Challenge raised $100 million in 30 days. All of these are examples of product-led growth.

    Look at the level of touch required to complete a sale. Some products are easily understood, while others may require a careful walk-through by a sales person. Sometimes, the customer will want a trial with their own data. Consider every possible way to minimize this. For example:

    • Create demo videos that answer every likely sales question.
    • List the common sales objections that come up in the sales cycle, and provide answers to these on the web site.
    • Try using customer references to avoid the need for a trial.
    • If your customers are going to compare you to the competition as part of their process, consider doing this for them, with a section of your site that has a comparison matrix with appropriate check marks.

    Also read: Life Story of Sundar Pichai: The Hurdles and the Success

    The Key to SaaS Customer Acquisition

    Tackling the SaaS customer acquisition cycle is not for the faint of heart. It requires a lot of work, and most importantly, a deep understanding of your customer and their needs to create a SaaS acquisition strategy that works.

    Jason Lemkin
    JASON LEMKIN, FOUNDER, SAASTR

    “A rough rule of thumb is successful SaaS companies are spending about 20%-30% of the fully calculated CLTV on customer acquisition.”
    JASON LEMKIN, FOUNDER, SAASTR

    So, if a SaaS customer LTV is $1,000, then their customer acquisition costs should be in the range of $200 to $300 to stay competitive. Or put another way, ⅓ to ⅕ LTV.

    When you’re applying these principles in your own acquisition efforts, be sure to always put your customer’s needs first. By focusing on their benefits and what they’re looking for in a solution, leads will be much more receptive to your messages. Keep this in mind and find ways to guide them through the acquisition process with helpful interventions that come at the right time and add value to their experience. This will lead to much more success in the long run.

    Also read: BookMyShow – The Indian Startup That Did Not Have A Smooth Sail

    Comment your views and if you know any other tip to track customer acquisition, please let me know in the comment section.