Great Marketing starts by knowing your customer. Here I'd like to share some thoughts on how software startups can do this effectively.
In 2020, the software-as-a-service (SaaS) landscape displays huge opportunities for new growth.
A post-pandemic world has accelerated an online, software-dependent society, leaving leaders scrambling for quick and sustainable solutions.
This ‘new normal’ is a longer-term experience than anyone initially imagined, and stop-gap measures are becoming permanent lifestyles. Now more than ever, funded B2B SaaS companies are able to make their cases to investors primed to listen.
Funding brings new possibilities – and pressure. Suddenly, there are strict performance timelines, a board demanding results, high ARR goals, and covenant compliance thresholds to be met.
While CEOs know the potential of their offering, delivering on promises sold to investors becomes a daunting task. Their sales funnel remains dusty and the last two agencies did nothing but busy work. Time is at a premium and it’s not possible to cobble together marketing on the side of their desks.
One of the main challenges of hiring an in-house team is that your ‘we need it right now’ mindset doesn’t always overlap with your long-term needs.
This leaves CEOs with a marketing team today that may not align with their needs tomorrow.
What is a Software-as-a-Service marketing agency?
Simply put, software (or SaaS) marketing agencies are laser-focused on supporting software companies during every stage of growth.
Software marketing requires a unique, specialized playbook tailored to the dynamic environment of B2B tech and buyers, including your Go-To-Market (GTM) approach, online presence development, account-based-marketing (ABM), and positioning and messaging.
Services can be tailored to your company, depending on your marketing needs and goals. Before or during the onboarding process, your software marketing agency should begin with a marketing audit to assess the current state of your company’s marketing. Your agency will determine both what your company has already successfully achieved, and what still needs to be done to create the most impactful, cost-effective marketing strategy for your software products.
But why hire an agency purely focused on SaaS, versus a generalized agency familiar in B2C marketing tactics and campaigns?
10 reasons to hire a software marketing agency
There are thousands of marketing agencies out there. So why should you work with a marketing agency that specializes in the SaaS industry? In order to achieve T2D3 (triple, triple, double, double, double) revenue growth seen from SaaS companies, you need skills and expertise to launch a scalable marketing foundation.
Here are the top 10 reasons (although there are many more):
- Instant access to proven SaaS marketing playbooks
- Expertise with B2B SaaS marketing trends and tactics
- Greater ROI
- Quick, measurable results
- Flexibility to your changing needs
- Knowledge of your niche and GTM
- Access to cutting-edge technologies
- ARPU and retention growth
- Performance and accountability
- Content and user experience optimization
Let’s dive into these a little more, and how this applies to your SaaS company.
1. Access to a proven B2B SaaS marketing playbook
Unfortunately, it’s hard to execute effective marketing. Companies often invest their marketing dollars into the wrong places, people or strategy, and fail to drive the results and growth they’re hoping for. With a B2B SaaS marketing playbook that has helped over 30 SaaS companies GTM and scale their services, you can have trust and confidence that your investment pays off.
By adopting a proven marketing playbook that’s delivered results for software companies before, you can feel confident that you’re not just throwing your money into ineffective campaigns and updates. Rather, you’ll have a month-by-month playbook and strategy that’s been carefully tested and refined to deliver the most effective marketing tactics in the correct order.
The playbook covers your start, scale and profit company stages to address and support your growth needs. You’ll have access to guides, templates, and examples that make building your marketing function at scale easier. In addition, you’ll receive a fractional marketing coach with weekly meeting cadences that allow you to create a rhythm discussing your marketing priorities and planning your path forward. When you find areas of the playbook you may need additional support for, you’ll have access to experts from the SaaS marketing agency that can unblock you and help you proceed.
2. Expertise with SaaS marketing trends and tactics
You’re working with tenured specialists and managers knowledgeable in many different areas of marketing. From inbound content marketing and paid search to outbound account-based marketing (ABM) campaigns, an in-house team often doesn’t have the bandwidth (or knowledge) to plan, deploy and optimize many different marketing initiatives at the same time.
SaaS marketing agencies are always at the forefront of trends and technology. Because Kalungi is an ROI-driven agency, we’re continuously reporting on and monitoring data to make the smartest decisions and most relevant offers for your SaaS ideal customer profile (ICP).
The software buyer’s journey (or marketing funnel) has specific influencers, purchasers, and gatekeepers that can make or break a company’s purchasing power. Your SaaS marketing strategy can address this through a strategic collection of content and resources that align with each stage of the funnel, your SaaS buyer personas, and the appropriate call to action are added to all content to qualify and enter prospects into your funnel.
Within B2B SaaS marketing, there are many unique opportunities to capitalize on. One of these includes third-party review platforms, such as Capterra. These sites are unique to the SaaS buyer’s journey, and are important to both inbound and outbound marketing funnels.
Whether you’re building out your initial presence on these third-party sites, or you’re trying to elevate your ratings through campaigns, understanding the unique constraints and opportunities these sites pose is important to optimize your marketing function. Developing a marketing team with foresight into the challenges, opportunities and strengths of your SaaS company will deliver short-term and long-term efficiencies and results. SaaS marketing agencies are here to help you navigate this environment and come out with efficient, productive marketing solutions.
3. Increased marketing ROI
Simply put, marketing agencies are cheaper than hiring in-house. Building and retaining an in-house marketing team grows more and more expensive each year. Your marketing team’s salary will increase anywhere from 10 to 40% each year, on top of the time and resources spent finding, onboarding, training, and compensating your marketing team.
Often, SaaS start-ups don’t have the resources to afford a complete team of full-time marketing professionals. By using a SaaS marketing agency, you can gain access to knowledge, expertise and tools. When you outsource your marketing, you can skip the hiring and onboarding process for each individual team member and instead focus on interviewing and assessing one agency. They spend time and resources interviewing marketing candidates, so you can rely on them to find and hire the right talent.
Some software marketing agencies offer a pay-for-performance model based on goal completion, tying compensation to outcomes delivered. This means you’re paying for the results your software marketing agency produces, and not a fixed cost regardless of their impact on your overall business outcomes. Learn more about the pay-for-performance marketing agency model.
4. Quick, measurable results
Often, SaaS companies that have received recent investments or VC backings need to drive hockey-stick growth in a short period of time. With investors to please and stakeholders to satisfy, a SaaS marketing agency allows you to target low-hanging fruit in your marketing function while implementing and executing on a bigger-picture growth strategy.
Fractional CMOs have worked across many different SaaS companies, industries and verticals. They have the experience, data and resources to prove what campaigns and marketing efforts are most effective within the software and tech industries, and what’s not worth it. This allows your company to target the most impactful, ‘low-hanging fruit’ first, driving quicker results that add momentum to your overall marketing function.
5. Flexible to your changing needs
Your needs will change as your SaaS company grows and ages. In the beginning, there’s a one-time need for Big ‘M’ marketing strategy, from positioning and messaging relative to your customers to identify your TAM, SAM, and SOM before ABM strategy.
However, as your company’s marketing function matures, tasks reduce to the execution and deployment of the strategy and guardrails you’ve already set in stone. You don’t need a chief marketing officer or VP of marketing forever -- rather, it’s beneficial to have their experience as you’re laying the groundwork and then turn to your more junior roles for day-to-day execution.
In the beginning stage of SaaS growth, companies need to focus on creating a minimum viable product (MVP). The company’s founder will lead the marketing needs, which will likely be driving product development and product-market fit (PMF). This stage of marketing will be heavily focused on market research, product development, and your GTM strategy.
However, your marketing needs shift once you’ve hit 1 to 10 million in ARR. At Kalungi, we call this your ‘start’ phase of growth because it means it’s time to kick off your marketing function and growth capability. The SaaS CMO in this stage of growth will need to:
- Source and hire your first marketing team
- Build the foundation of your marketing technologies
- Develop strategic positioning and messaging
- Implement a content marketing strategy
- Kick-off outbound marketing campaigns
- Address product marketing needs
In the final stage of SaaS growth, leaders can expect “triple, triple, double, double, double” annual revenue growth -- or T2D3 growth, for short. In this stage of SaaS growth, you need a CMO with the skills to hone and optimize the tactical, execution-based areas of your marketing function (as opposed to strategy and planning). A different type of CMO is needed in the next stage when you’re focused on optimizing what you’re doing (funnel optimization, churn reduction, and SaaS SEO), to make your marketing more sustainable in the long run. This can be cheaper than your big ‘M’ marketing leader. It’s not just that you need different capabilities -- you need different amounts of money for your marketing leader.
6. Refine your SaaS ICP and GTM for startups
Defining your ideal customer profile is often easier said than done. And in SaaS, you must nail down three critical personas for all future inbound and outbound efforts. As a general rule of thumb, your SaaS company should have three personas -- your user, your manager, and your executive.
But identifying your software’s target audience is just the beginning. Once you’ve nailed down your ICP’s pain points, fears and dreams, it’s time to build lists of contacts and craft your outbound messaging. Rather than cold calling and traditional outbound tactics, some B2B software marketing agencies are experienced at ABM and other outreach tactics.
Once you’ve built your contact lists, created outreach messaging and have an execution cadence in place, the fun is just beginning. You need an agency that consistently follows up with ABM efforts, responds to contacts, and most importantly, tracks progress.
7. Access cutting-edge technologies
The right marketing ech stack and tools can exponentially increase efficiency, productivity and results. While there are freemiums or try/buy tools you can access for free, hiring a marketing agency gives you the power of premium-level software services and reporting already included within your package.
A single marketing tool can range anywhere from $50 to $200, and without utilizing the platform’s full potential, it doesn’t make sense to spend that across multiple marketing functions when you can access subject-matter experts AND this cutting-edge technology.
At Kalungi, some of the marketing tools we use include:
- LinkedIn Sales Navigator
- Sprout Social
- Adobe Suite
- Alchemer (formerly SurveyGizmo)
- Atlas Website Template
With a large company and hundreds of employees, investing in these tools makes sense. But if you’re still a small to medium-sized business, hiring an experienced agency that already has access to these tools can often make more financial sense.
8. Lower your CAC and churn rates
A software company’s customer acquisition cost (CAC) is one of the most important metrics. A software marketing agency should focus on lowering your CAC to $2,500 in the first six to nine months of working together. Over time, trimming the fat and reducing friction across your marketing funnel will deliver thousands of dollars in ROI.
But SaaS marketing agencies aren’t only here to improve your funnel conversion rates and nurture relationships before prospects are customers. As a SaaS company, your churn and retention rates are one of (if not the) most important metrics to your holistic business, from your product development team to your customer success, sales and marketing functions.
Healthy SaaS churn rates vary depending on the customers you serve. For SaaS companies supporting start-ups and small to medium-sized businesses, your churn can be up to 50%. But if you’re serving older, enterprise customers, your churn rate shouldn’t be higher than 7%.
Part of a SaaS marketing agency’s responsibility is to lower your churn rates by planning and implementing a customer-oriented onboarding process with helpful, educational content. Additionally, software marketing agencies should talk directly to your customers and listen to their experiences.
9. Ensure you’re paying for the right results
You want to see a return on investment from marketing. The best SaaS marketing agencies can quantify the results of their marketing efforts and are transparent about what you’re driving. By measuring and tracking marketing results, you can see what’s working (and what’s not) to divert and direct resources toward the most effective strategies.
Additionally, if you hire a pay-for-performance marketing agency (like Kalungi), your payments will be contingent on the marketing OKRs you set and the level of completion achieved. You can pick how much of your payment will be variable and fixed, and the variable pay will be based on the completion of your OKRs.
If your Fractional CMO achieved 80% of OKRs with a 90% fixed, 10% variable compensation plan, this is what you can expect to pay:
10. Understanding of SaaS content and user experience
B2B SaaS websites are critical to nail down. After all, if your software product isn’t communicated in a user-friendly and intuitive way, your users won’t realize the benefits of adopting your product or service.
SaaS companies need specific website structure, strategy and content that includes:
- Menu structure
- Resource pages (including your blog, lead magnets, videos, and other resources)
- Informational pages
Thankfully, the Atlas Hubspot Theme is custom-built for SaaS companies, form start-up to enterprise. This means you can easily drag-and-drop interactive modules, already optimized for mobile, and cut out the coding and guesswork when developing a website theme in-house. To download your free version of the Atlas Theme, click here.
Start, scale and profit your SaaS marketing function
Deciding when and how to fund your marketing is a hefty decision.
Hiring the right SaaS marketing leader is expensive, time-consuming, and comes with many uncertainties, with the potential to delay your goals by a couple of quarters, but the payoff is worth it. Without the right leader, companies are left with a stack of empty promises, struggling with growth planning and strategic decisions. They need marketing leadership, staff, infrastructure and results, now.
If you’re struggling with finding the right SaaS marketing leader, we’re here to help. Backed by a proven playbook of best practices across dozens of companies, Kalungi allows you to hit the ground running while helping you build your in-house team along the way. Now you can retire your role as your organization’s piecemeal CMO and focus on being fully present as its leader. It’s no wonder why over 30 SaaS companies have trusted Kalungi to deliver a 150%+ increase in marketing qualified leads and 675% increase of organic website traffic.
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A content marketing specialist at Kalungi, Liz enjoys writing and learning about anything and everything. Since obtaining her BA in English and her BS in Marketing at NC State, she's carved a path educating, engaging and exciting B2B SaaS markets through powerful content and messaging.