SaaS Funnels
SaaS Funnel 101: A Blueprint for Converting Free Trial Users to Paying Customers
The 6 Stages of a SaaS Sales Funnel
Software as a Service, or SaaS, was developed in 1999. SaaS is hosted on the cloud and provides the service of delivering applications via the internet.
Accessing the internet directly eliminates the need to install and manage complex software and hardware. Other names SaaS goes by are hosted, on-demand, or web-based software.
The SaaS provider runs, oversees, and supports the software and the infrastructure that supports it. It also manages application access, availability, security, and performance. The client must set up an account, pay a fee, and begin working.
The benefits of SaaS include low infrastructure and set-up costs, flexible payments, remote accessibility, scalability, customizations, automatic and frequent updates, and a sophisticated security system.
The SaaS market is estimated to grow to USD 883.34 billion by 2029. By the end of this year, the SaaS market is expected to be worth $195.2 billion, having grown at its fastest rate over the past few years between 2022 and 2023.
Now, you could have a great SaaS product in place, provided you’re converting potential customers into paid ones. Several metrics are particularly crucial for SaaS products, but which ones your company prioritizes depends on your business and user goals.
SaaS funnel metrics provide the information you need to improve your product and give customers the greatest experience possible.
A traditional marketing funnel is linear in nature. You increase client awareness and guide them through the buying process to checkout. In contrast, a SaaS funnel is more vertical, where loyalty and advocacy come after the sale, which occurs in the middle of the lifetime.
To deliver a fantastic user experience and match your customer journey, you must perform research and customize your funnel and strategy. The 6 stages of a SaaS funnel are:
1. Awareness
2. Interest
3. Consideration
4. Conversation
5. Retention
6. Advocacy
Even though each stage in the SaaS marketing funnel is essential to generating conversions and establishing your brand image, understanding your customer journey is the secret to building a successful and effective marketing funnel.
The customer journey is depicted top-down in the SaaS framework. Depending on how well you optimize each stage of your funnel, you can increase the number of leads who eventually proceed down the funnel and become paying customers.
Read on to understand each SaaS funnel stage and how to convert free trial users to paying customers.
1. Awareness Stage
Potential buyers learn about your product during the awareness stage of your SaaS marketing funnel. They might need to be aware of their issues or how your business can provide solutions.
This first point of contact with a customer usually comes via a social media post or search engine result.
Focus on your search engine optimization (SEO) approach at this point and think about spending money on paid search or advertising because the awareness stage is all about developing your brand and getting visitors to click the first time.
To accomplish this, the landing page must effectively inform visitors of everything they need.
There is no final destination when developing effective SaaS landing pages and websites. Your page must be regularly optimized depending on testing results and performance data. Take a look at how to create a successful SaaS landing page.
Know your target market
You can produce more effective content and boost conversions by knowing your target audience’s needs, wants, and pain areas.
Producing material that appeals to your audience will be simpler the better you understand them. Your conversion rates will suffer if you employ the same design and content for every persona.
Create a SaaS Landing Page
It’s time to design your page after you know who it’s for, what elements you need to emphasize, and what your CTA will be. Your landing page ought to contain these elements.
A hero with your CTA or call to action, a section listing the product’s features, a section focused on displaying social proof, a section to restate your CTA, and a section that includes resources like FAQs to build credibility.
With this in mind, you need to know how to optimize your content landing pages to optimize your content and drive traffic to your landing page.
You must learn about the keywords and queries that Google associates with each page. Always monitor your SEO ranks using tools like Semrush, SpyFu, SE Ranking, Rank Ranger, Moz, etc.
Once you have identified the search terms or keywords to improve the page, research what Google considers the intent behind each of those terms.
Consider including a FAQ section on the page with frequently asked questions regarding that category and in-depth responses. Also, this is your opportunity to add additional relevant keywords.
Finally, look into how you link internally. Do the internal pages you connect to employ keyword-rich anchor text? This strategy will assist you in creating a clear structure for your website and authority for the subjects your landing pages are aimed at.
2. Interest Stage
The SaaS sales funnel is still in its early stages, and content marketing is still crucial for attracting potential clients. However, you shouldn’t limit your efforts to only educating them about their issues.
You must provide them with content illustrating potential SaaS remedies for these issues. Listicle blog entries are one of the content kinds appropriate for this use. Numerous Saas providers post articles describing the leading SaaS solutions for this or that niche.
Linking your awareness-stage material to your interest-stage content is one of the things you can accomplish.
You can hyperlink your listicle blog article at the end of your instructional blog posts and discuss SaaS solutions for their problem in passing. This will prevent potential buyers from leaving your website or running another Google search.
In SaaS, product demos are very important for decision-making. A product demo must concentrate on the problems that customers have and present answers that appeal to prospects.
A SaaS product demonstration is a fantastic way to establish rapport with potential customers, foresee questions about the offering that can spur product development, and increase closure rates. Here’s how to make a powerful product demo for your SaaS offering.
The prospect’s worth should always be demonstrated during a sales demo.
Show them the potential of your product.
Start with your origins, why you decided to concentrate on that pain point, and other aspects of your product. Demonstrate to the potential customer why they should choose you over your rivals.
Give them a sneak peek into the SaaS product for testing purposes. Do your best to humanize the demo. Engage the potential customer as much as you can and make sure they participate in it.
Leave room for inquiries and encourage them to research the rationale behind the design of a certain method. Connect the product’s existence to its requirements.
It’s crucial to maximize that opportunity to showcase the product. The correct person should handle it; they should prepare thoroughly, comprehend the prospects’ attitude, and match it up with the product’s benefits.
3. Consideration Stage
You can think of potential customers as leads if they have interacted with your social media post, viewed your material more than once, or clicked on an advertisement. They are now in the center of the funnel (MOFU).
It’s time to begin nurturing your recently generated leads so that you can convert them into paying clients. The SaaS funnel’s consideration stage enters the picture at this point.
The fact that they are engaged with your TOFU content now indicates they are considering purchasing a SaaS solution to address their issue. It might not necessarily imply that they are already considering your SaaS offering. Yet, it might also be a choice.
Making a thorough introduction to your SaaS product is your aim at this point. You can aggressively promote your brand. You can continue to offer your newly created leads even more worthwhile information.
But this time, the information won’t only inform them or provide generic suggestions for SaaS solutions. Also, you must produce material for use in lead nurturing. Email marketing is one of the things you can do at this point in the SaaS sales funnel.
One of the most efficient ways to connect with your target audience is still through email marketing. As a matter of fact, for every dollar invested in email marketing, an impressive $36 is gained in ROI.
Email marketing enables you to tailor your message to each recipient. You may even focus on someone based on their actions and interests. Drip campaigns are the one type of email marketing strategy you can use.
You send a succession of pre-written emails over a predetermined time frame with drip email campaigns. This is a fantastic method of maintaining contact with your leads. Today’s most widely used email marketing SaaS tools help optimize lead nurturing for you.
Apart from email marketing, you can also create an interactive trial experience in the consideration stage. Interactive tutorials are now a need for software developers if you want:
- Your trial-to-paid conversion rate to improve.
- Increased user engagement and activation rates.
- Enhanced customer lifetime value (LTV) by reducing churn and improving retention.
- Lower costs for support
Two of the most successful interactive trail guides in SaaS are:
Interactive product walkthroughs: These take the user step-by-step through each product feature. It only offers a small number of 2–5 essential functions pertinent to the particular customer, encouraging the user to learn by doing.
Onboarding tooltip: Users can learn about a new feature with the help of an onboarding tooltip, which is a targeted pop-up.
Because they attempt to introduce every function as soon as the user comes in, product tours could be more effective.
4. Conversion Stage
When a potential customer completes a goal, such as their initial sign-up for or subscription to a premium version of your product, or makes their first purchase, this is known as conversion.
A customer has converted, for instance, if they buy a monthly subscription to your user onboarding program.
At this point, ask yourself the following questions. How many consumers reached the conversion stage after entering your marketing funnel? Have you noticed a rise or fall in your churn rate?
These questions assist you in determining whether adjustments to your SaaS funnel are necessary to increase conversion rates.
Metrics to track:
- How many clients buy a product or subscribe to a service?
- Cost of acquiring a customer, or how much it costs your business to convert a user.
- Conversion rate: the percentage of users that download something or make a purchase.
- Churn rate: the percentage of customers who discontinue using your product or cancel their subscription over time.
You can grasp your customer’s attention by creating effective pricing plans and packages. Your decision on a pricing model is one of the most crucial.
It will affect how you monetize your product and set up the other aspects of pricing mentioned above, such as your vitally important value and price measurements.
Creating a seamless checkout experience means no checkout should take longer than one and a half minutes. You want a quick and easy process that enables customers to input their information, view processing timeframes, and view results.
Consider rewarding clients by recommending your product to others or sending them personalized offers and content, such as exclusive newsletters.
5. Retention Stage
It is insufficient to draw in new customers and offer them a cause to utilize the product. You need to hold them long-term by developing a long-term connection if you want continuous business growth. In actuality, acquiring a new customer is more expensive.
The retention stage aims to maintain existing customers’ subscriptions and foster customer loyalty. During this phase, you can also concentrate on upselling and cross-selling more products from your business.
For instance, a SaaS video-capturing program might provide a more feature-rich edition or a unique add-on with improved effects.
Consistently deliver value by Creating an ongoing content strategy to keep users engaged.
Make sure your material is relevant to the demands of your audience and both helpful. They’ll continue to get additional benefits from their membership to your SaaS solution in this way.
Your content marketing strategy needs to be focused on assisting customers in getting the most out of your SaaS offering. Making tutorial articles, how-to manuals, and case studies will help you do this and create a user-friendly interface and helpful onboarding process.
During this phase, you can also concentrate on upselling and cross-selling more products from your business. For instance, a SaaS video-capturing program might provide a more feature-rich edition or a unique add-on with improved effects.
6. Advocacy
You’ve put in the effort to draw in new clients and satisfy them with first-rate services and interactions.
You have now reached the referral stage, where customers recommend your product to friends and coworkers, and it can start to reap the rewards of building a marketing funnel.
Referral leads are the highest quality leads since they have been chosen by your existing customers and come to your business with the intent to buy.
Putting up a referral program that offers discounts to both referrers and referees is a straightforward yet incredibly powerful way to boost consumer advocacy.
With time, SaaS enterprises will encounter greater competition entering their market. Conversion costs will rise sharply as more competitors compete for the same client, leaving many SaaS enterprises with weaker profits.
SaaS communities can aid in retaining customers. When you concentrate on delivering value, you can keep the clients at risk of leaving.
Actively involved customers are more likely to stick with your company for an extended period. Here are a few short suggestions to boost user engagement and support growth.
It’s usually a good idea for a product company to solicit client input, feature requests, and suggestions for new products.
A community is an ideal setting to do so. Also, only some of your clients are tech-savvy. When attempting a new feature, they will become stuck and seek assistance.
You should encourage customers to share their positive experiences for various reasons. A few ways to do that include using social media platforms, providing access to special pricing for paid customers, new products, and special features for premium members.
Summing Up
You need a dependable funnel in place if you want your SaaS to succeed, to convert leads into satisfied customers consistently, and to have those customers stick with you. A healthy sales funnel is essential in any organization, but SaaS businesses require it even more.
In contrast to other business models, revenue is produced gradually over time. And when you take into account the expense of obtaining each customer, you can see how crucial having a sales funnel that consistently converts.
