There has been a steady growth in the demand of B2B SaaS over the last few years. Creating demand and capitalizing on it has been a challenge. This has led to many Saas companies employing different strategies and tactics to increase customer traction. Creating demand is incredibly important if you want people to move into your buying cycle.
If you look at the B2B market strategies from 2011, the primary ways were conferences, salesperson, analyst firms and more. A large number of the strategies revolved around going out in the market and creating demand out of thin air. This is because marketing did not have the capabilities to target people in the way that it can today.
Demand generation vs lead generation: The difference SaaS companies need to know
Your marketing team is responsible for the company’s performance. Lead generation is one of the key metrics that you use to measure the scale of marketing. It involves the continuous pressure to produce contacts of interest. In the modern world of digital marketing, generating prospect leads can be frustrating. It comes at the expense of campaigning and uses various marketing channels. On top of that, 2013 reports show that the conversion rate of leads is no more than 5-10%.
An executive-level marketing strategy that focuses on producing highly qualified leads incorporates several elements. These elements revolve around engagement strategies, content strategies, and converting contacts into relevant leads. For SaaS companies, this begs the question of whether your business should focus on lead generation or demand generation.
The answer is to focus on both equally. It is an incredible challenge to generate leads if you do not create sufficient demand for the software. Getting good leads includes embracing marketing strategies that convert demand into leads.
Demand generation involves building awareness of the prospect’s pain, while lead generation focuses on providing ways to relieve that pain. Additionally, demand generation also helps build your brand’s authority and incorporates wide engagement efforts.
Crafting a strong saas demand generation strategy: Where to start
Overall, demand requires you to build awareness and educate your buyers so that they can consider taking an action. Starting a demand generation strategy will require you to look at elements such as content marketing, paid search, email campaigns, SDRs, and more. These are methods that drive demand within your consumers. Starting out will involve choosing which method is likely to work best for your SaaS business and, more importantly, customers.
Customer obsession: Everything you do is through their lens
To effectively build demand, SaaS companies must turn towards a customer-centric approach. Customer obsession will require companies to first glance through the customer lens, and work backward from there. This includes vigorously working towards earning the trust of the customers.
Before companies start implementing any strategy, they need to figure out what is most valuable to their customers. Then, they should make sure that their strategy resonates with customer values.
Bring customer problems to attention before they become aware
Creating awareness is crucial to generating demand. However, you need to bring customer’s problems to the forefront. The customer often cannot manifest awareness because they are yet to realize the problem at hand. Until you do not get them aware of the problem, they will never be aware of the solution. This solution or the fix will then invite them to demand your SaaS business.
SEO: Create a content machine that emphasizes product success
Keyword research and SEO channels are important components for demand generation. They amplify product success by ranking websites higher in search engines & establishing authority in your industry. This will require you to craft content that’s driven by your product & problems your customers face to occupy the SERPs where your ICPs live. 93% of companies believe that content marketing surpasses traditional marketing techniques in demand creation and lead generation.
Competitive analysis & content research
Competitive analysis tools such as ahrefs, semrush and others can help you learn anything and everything about your competitors. You can analyze keywords your competitors rank for and dig into sites that link to their best content.
Competitive analysis can help you gain an insight on your competitor’s strategy. This type of content research will help you analyze your top competitors, learn from their strengths, and capitalize on their weaknesses.
Mapping user intent across the buyer journey
With all inbound services, understanding customers is critical for success. Businesses need to have a sound idea of user intent. Since audiences can vary widely based on industry and intent, understanding buyer persona is the beginning of developing a buyer’s journey.
Customers hold all the power, form a framework around how they want to buy
Inbound strategies are packed with customer content that supports their needs. Business-to-business models require nurturing, engagement, and relationship with their customers before pushing a purchase. This means that your strategy should serve customers in the best way possible and reflect their needs.
Adopt your lead-to-revenue model: How do leads turn into opportunities for pipeline?
Adopting a lead to revenue model is incredibly important. Your goal is to produce a repeatable and scalable growth machine. This will require you to consider metrics and deploy a business system that retains customers to gain recurring revenue over a long period.
Tracking success and capitalizing on growth opportunities
Tracking the success of your business is one of the most important things that you need to do. Nonetheless, you cannot track success unless you have a clear vision for your business. Only then can you measure the success of your business campaigns, strategies and capitalize on other growth opportunities.
Measuring the success of your campaigns with SaaS KPIs that actually matter
SaaS metrics can reveal incredible points of growth. SaaS company metrics can be split between many categories. One of them is the growth metric, which tracks performance and development opportunities. Monthly recurring revenue is also a vital metric for your SaaS demand generation strategy. But don’t stop there, these three additional KPI’s will give teams greater insight & data to tighten up lose ends.
Paid Marketing Payback Period
The paid marketing payback period calculates the time it took to recover the investment you made for your paid campaigns. For SaaS companies, this KPI can unveil the ROI you’re getting on paid and leads to opportunities for improvement.
Lifetime Value vs Acquisition Cost
Growing your SaaS business and making money through software entrepreneurial activities involves studying lifetime value and acquisition cost. This metric allows you to demonstrate that your business will indeed be profitable. Keep in mind that 53% of marketers splash half their budget on creating leads.
These metrics are important because it translates the value of your customer, and how much you have to spend to get that customer. You need LTV or lifetime value, along with CAV, or customer acquisition cost to figure out whether your investments and business is successful.
Sales Win Rate
Sales win rate is the ratio of sales opportunities closed-won against the sales opportunities closed that were lost. It is also referred to as a win ratio and gives insights into your sales team’s effectiveness and your demand generation.
It also unveils the effectiveness of the marketing campaigns for the SaaS companies. Calculating win ratio requires two data points. The first is the number of opportunities invested and the one ones that have not been invested.
Monthly Recurring Revenue (MRR)
The monthly recurring revenue refers to your company’s income in a month. MRR is for businesses that charge on a month. For SaaS companies, this translates to the number of subscribers that you bill each month.
This KPI is the reason why SaaS businesses are so exciting, as it allows investors to enjoy predictable revenue. If you multiply MRR by 12, you get ARR, which is the annualized run rate. This metric reveals the annual income of the company.
Demand generation in 2022 and beyond
Demand creation in 2022 will require marketers to adapt to the emerging technologies and platforms that will shape the world of marketing. This is why it is critical for business leaders and marketers to adapt to focus on demand generation and how the current digital ecosystem impacts the earlier drawn-out methods.
Guest Article by Dustin Porreca
Dustin Porreca is an SEO Growth Manager for Elevate Demand, B2B Growth Agency. He helps carry out growth initiative’s for SaaS and tech brands through a proven buyer-led framework.