A growing number of organizations are embracing Software-as-a-Service (SaaS), doing so to reduce costs and maximize efficiency. While many businesses still use traditional on-premise software, SaaS platforms are steadily taking the upper hand.
The key hurdle for SaaS adoption is security concerns. That said, more and more enterprises are coming to realize that installed software is as vulnerable to security breaches as SaaS platforms. Consequently, the SaaS market is turning into the most lucrative niche for software developers.
But it doesn't matter whether your software is installed or in the cloud, any developer or vendor needs a viable marketing strategy to reach their respective target audiences and actually tap into that wealth. This is a fiercely competitive market. A laser-sharp focus on marketing is a prerequisite for getting the most out of a SaaS product.
Option #1: A Free Service Plan
You can’t gain market share unless your SaaS solution solves a problem. Still, even a SaaS platform of extraordinary potential needs to be promoted and eventually commercialized. You need to have a marketing plan in place from the very start. It will give you a competitive advantage to identify your target customer in the earliest stages. Besides, you’ll know better how to reach those customers and prospects, and generate leads.
You can try introducing a free subscription plan for your SaaS product. Actually, most SaaS platforms targeting the average business user provide some sort of free plan. The downside is that such plans can offer only a limited service thus hiding some features from prospects.
What you can do instead is offer a fully functional solution that allows power users to shift to a paid plan when their business grows. In fact, this is a working marketing model where your SaaS product grows along with your customers. The only difficulty here is the need to calculate and budget in advance for all the resources you will require to maintain a free plan.
Option #2: Convince Users To Go Paid
Free SaaS doesn’t mean no profit. In fact, there are many ways to make money from it. These include advertising, affiliate marketing, and white labelling. But when all is said and done, attracting paid customers remains the key to success for a SaaS solution. You have a very competitive market where many popular SaaS platforms aren’t making any profit. They rely on massive funding from optimistic and diversified venture capital funds to stay in business. This, however, is the risky path to gaining market share.
The bubble of a subsidized service can burst at any given moment. A better option to establish trust with customers that are unable to reach your service due to a third party going out of business or your service having a trouble is a source code escrow, which protects licensees even if the licensor files for bankruptcy or otherwise fails to maintain and update the software. The same applies to establishing trust with vendors. Having a full-coverage escrow contract allows you to assure your clients that their data and access to a software is guaranteed.
So, the right strategy is to transform your free-tier customers into paying ones. Which, of course, requires knowing them well, and figuring out what they are willing to pay for. Following this line of thought, we come to something known as personas. It is the mother of all buzzwords when it comes to corporate blogs and content creation, but has other uses than just driving clicks and downloads.
Creating Personas For Your SaaS
For all the hype surrounding it, creating personas is not a new concept. They have been used for ages to assess prospective customers. But our knowledge economy calls for a somewhat different approach when creating personas for a SaaS business.
A SaaS solution might be a very specific one. If yours is such, you know your prospects in advance. However, most SaaS platforms target a wide range of users, from individuals to small businesses to large corporations. If your service belongs to this group, you need to know who your free-tier users are. You’ll also have to know which users would be willing to pay for your service. The trick is to distinguish between these personas. A good number of free-plan clients may be ready to purchase a paid plan at some point. For this reason, your marketing strategy should involve careful research into the needs of your target audience and ways of turning them into paying users.
Sure, you can offer discounted plans. You can also market a service that is more affordable than rival offerings. But can you uphold the quality of your SaaS by providing a cheaper alternative? As we said, the market for SaaS platforms is crowded. So, you need to emphasize quality, especially when you have a platform targeting the mass market.
Speaking of the mass market, it’s not what it used to be. Customers have never been so well informed. They’ll research any company or SaaS vendor before even considering a purchase. Your customer persona should take into account factors such as demographics, regional particularities, and purchasing power. It should also consider the availability of free or low-cost solutions in virtually every niche.
It is no doubt hard to develop a viable marketing plan that takes into account all those factors. However, it will pay off in the long term. It will help you reach a specific audience that is ready to spend money on your SaaS platform.
Do Not Over-Promote!
Image Source: Future 'as a Service' cloud investments worldwide 2017 by Tableau statista.com
No marketing campaign can save a flawed product. You can sell an expensive, high-quality SaaS product to selected customers or promote a cheaper one to a wide range of users. But it's difficult to do both at the same time. Ideally, your marketing plan should be tailored to reach a very specific target group or a mass market.
David Mackenzie Ogilvy once said: “Good copy can't be written with tongue-in-cheek, written just for a living. You've got to believe in the product.” A marketing plan will only work if you really believe in your SaaS solution and know exactly who can benefit from it. Otherwise, you time and efforts will be wasted on a non-marketable product.