Over 80% of businesses rely on cloud services and use at least one SaaS application. The total market volume of the SaaS industry will be over $320 billion in 2024.
While these stats represent growth opportunities for SaaS businesses, they also highlight tough competition. However, SaaS brands can stay competitive by implementing demand-generation strategies.
Read on to get insights on building a demand gen framework, the channels to use, the metrics to track, and the stages of generating demand.
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What is SaaS Demand Generation?
SaaS demand generation is a process that stirs interest in and awareness about a SaaS solution.
In addition to building brand awareness and recognition, its other objectives include:
- Achieving a solid brand presence
- Establishing topical authority
- Creating a pipeline of qualified leads
- Building trust and customer loyalty
What is B2B SaaS Demand Generation?
B2B SaaS demand generation creates awareness and sparks the desire of key company decision-makers for a SaaS product.
With effective B2B SaaS marketing strategies, businesses can lower acquisition costs, expand their market reach, differentiate their offer, and achieve short sales cycles.
How is Demand Generation for SaaS Any Different?
Demand generation for SaaS is complex. In addition to having longer sales cycles, the campaigns target more sophisticated decision-makers than their B2C counterparts.
SaaS demand generation emphasizes the following:
- Creating targeted content that shows the product’s outstanding features and addresses the customers’ pain points.
- A well-designed and intuitive website for guiding prospects through their buyer’s journey.
- Engaging prospects throughout the buyer’s journey.
The Role of SaaS Demand Generation Across the Customer Lifecycle
Most SaaS companies treat demand generation as an isolated top-of-the-funnel function focused on capturing emails and qualifying leads.
Here’s how demand generation impacts the entire customer lifecycle:
Acquisition Stage to Create Awareness
It creates initial awareness by introducing your SaaS products to prospects. Here, the tactic is to develop educational blog content, thought leadership on LinkedIn, and webinars that target pain points the target audience is experiencing. Besides, there should be paid ads to target problem-based queries.
The success metrics here are website traffic and engagement rates.
Activation Stage to Turn Interest into Trials
Once prospects are aware of the SaaS solution, the demand generation shifts to convert that interest into action. Here, the content should be product-led, showing use cases and outcomes. There should be demos, comparison pages, and free trials to show why the prospect should choose the specific SaaS solution.
To measure success, the metrics should be trial sign-ups, qualified leads, and demo requests.
Conversion Stage to Support Sales
The demand generation supports the buying decision. The demand generation tactics here include ROI calculators, customer success stories, and email sequences to address their concerns and equip them with everything they need to say yes to the SaaS product.
The trial-to-paid conversion rate and the sales cycle length measure success here.
Expansion Stage to Expand Revenue
Even at this stage, SaaS companies should not abandon demand generation. It can drive revenue and growth through targeted campaigns. The tactics here should be product use case content and webinars that explore features. The goal is to help the existing customers get value from the SaaS product and solve more of their problems.
The success metric here is net revenue retention (NRR).
Retention Stage to Prevent Churn
Demand generation focuses on retaining the existing customers, preventing churn, and keeping them engaged with the SaaS brand. Demand generation here focuses on creating regular newsletters, building community content, and creating educational content that builds excitement for the use cases.
To measure success, measure the churn rate, product renewal rates, and customer satisfaction scores.
Advocacy Stage to Turn Customers into Referrals
Happy customers become a demand generation channel. Tactics such as referral programs, case studies, and customer spotlight content are great for prompting customers to share their success with others. Success metrics include reviews and ratings, as well as referral prospects.
Successful SaaS companies don’t build demand generation in the acquisition stage; they ensure it supports the entire customer journey.
Demand Generation Framework for SaaS Businesses
A solid demand generation framework drives predictable growth to a SaaS business. It simplifies creating awareness, generating leads, nurturing prospects, and monitoring engagement levels.
To develop a successful framework, follow these 5 steps:
1. Build a Customer Profile
An ideal customer profile (ICP) is a guide to targeting the best-fit customers and generating qualified leads. B2B SaaS businesses should analyze companies based on their revenue, number of employees, and industry.
With a well-defined ICP, brands can use emotional messaging to address their pain points and propose solutions.
2. Develop a Positioning Statement
A thoughtfully crafted positioning can make a brand stand out from competitors.
The statement highlights the core USPs and the specific pain points a product solves, making the offerings resonate more with the target audience.
3. Select Different Channels
Successful campaigns incorporate both inbound and outbound marketing channels. Examine the channel where the target audience spends their time, improving the chance of the best prospects finding a brand.
Remember to set clear goals and analyze the profitability of each channel.
4. Create Targeted Campaigns
Segmenting the target audience to deliver tailored campaigns that enhance the customer experience.
The content of all strategies should inform, captivate, and inspire the prospect to enter the sales funnel.
5. Measure and Tweak
The next step is to track campaigns using tools like Google Analytics and Hotjar. Common metrics to measure include sign-ups, unique visits, and engaged users. These insights allow businesses to optimize their SaaS demand generation funnels for better results.
Want to nail your demand gen framework?
I can help you to understand your ICP deeply, create your value proposition, and refresh your campaigns. We can collaborate to craft messaging that resonates with your target audience’s needs and emphasizes the benefits of your offering.
Schedule a discovery call to develop targeted campaigns that drive the pipeline and revenue for SaaS businesses.
How to Define an Ideal Customer Profile for Predictable Growth
While most SaaS companies assume their ICP is anyone who can use their product, that shouldn’t be the case.
Here is how to define a clear ICP and drive predictable and profitable growth:
- Understand the Best Customers: Define the characteristics of customers who stay the longest, require the least support, upgrade to your SaaS product frequently, refer others, and leave the highest reviews. These are the data that define the ICP that succeeds with a product and becomes a long-term asset.
- Define the Target Companies: For a B2B SaaS company, describe the easily identifiable characteristics of the target businesses. They include company size, revenue range, specific industries, existing tools, and regulatory environment.
- Understand their Psychographic and Behavior: The next step is to define the business characteristics, including the business model, growth trajectory, and maturity stage. Define their buying behavior, including their sales cycle length, decision-making structure, and willingness to invest in a new tool.
- Describe the Role of the ICP: Even after finding the perfect company, it’s essential to describe the decision-makers, their job titles, their responsibilities, and the pain points they face. Understand what their goals are and the onboarding requirements.
- Evaluate the ICP to Avoid: It’s equally important to know the target audience to exclude to avoid wasting resources. For example, the company size is too small, has competing tools, has poor retention rates, and is in geographies that make it challenging to provide adequate support.
- Validate ICP with Data: After defining the ICP, it’s important to validate it with real-world data. For example, monitor metrics such as sales cycle length, conversion rate, customer acquisition cost, lifetime value, net revenue retention, and customer satisfaction scores. Run the analysis and compare the ICP to non-ICP customers. Then, refine the ICP based on data.
- Incorporate the ICP Across Teams: The ICP should be helpful across the entire organization. That means the sales and marketing teams should prioritize ICP leads and build target account lists. The customer support team should onboard ICP successfully and track ICP retention. The product design team should create features that solve ICP problems. When every team uses the ICP to guide decisions, the growth becomes predictable, and it becomes easy to retain customers that drive the highest value.
SaaS Demand Generation Channels to Target
So, which demand-gen channels should a SaaS business choose? Here are the common options:
Webinars
Webinars allow SaaS marketers to directly engage their target audience through live presentations and Q&A sessions.
They present perfect opportunities to establish topical authority and convince viewers of that particular product’s superiority.
Email Marketing
Email marketing is a cost-effective tool for B2B SaaS companies. It provides a direct and personalized opportunity to nurture prospects, generate leads, build brand loyalty, and measure engagement levels.
Podcasts
Podcasts can be a valuable tool in long-term lead nurturing efforts. SaaS businesses can use them to inform their audience about new technologies and share valuable product information.
Paid Media
SaaS companies can utilize PPC advertising to reach their prospects and build a strong online presence. With ads, users are exposed to the brand and are likely to remember it when purchasing a solution.
Cold Outreach
Reach prospective clients that haven’t shown interest in a product through cold outreach methods like calls, emails, and direct messaging. For example, LinkedIn is an effective channel for reaching the right decision-makers through in-mail campaigns and sponsored content.
Content
SaaS content involves establishing topical authority and sharing informative content to solve potential audiences’ challenges. Optimized content improves website rankings on search engines and attracts organic traffic.
6 Steps to the SaaS Demand Generation Process
A SaaS business should optimize and improve customer experience in each of the six stages of the demand generation funnel:
- Awareness: Prospects become aware of the product and its potential to solve their pain points.
- Consideration: Lead magnets, such as free ebooks, give more details about fulfilling the prospect’s needs.
- Decision: Prospects consider the product the most viable solution to their problems.
- Activation: Prospect is convinced and opts in to use the product.
- Expansion: The brand suggests a premium plan or additional packages to address other SaaS-related issues comprehensively.
- Promotion: If the product meets (or surpasses) the customer’s expectations, they will promote it to friends and acquaintances.
How to Create High-Intent Content That Drives Pipeline
Content for SaaS companies should not only generate traffic but also drive prospects down the pipeline.
Here’s how to create that content using a strategic SaaS messaging framework:
Understand the Content Intent
High-intent content messaging starts by mapping the different stages of the buyer’s journey and creating content that aligns with each stage. That means creating content that attracts prospects and answers their questions in the awareness stage. For the consideration stage, the content should compare specific SaaS solutions and make it easy for customers to evaluate the products.
Optimize High-Intent Keywords
Content must target high-intent keywords that prospects search for when they are ready to buy. These can be keywords that focus on conversion rather than traffic. Besides, it also means creating content around high-value topics and gating reports, webinars, and calculators.
Leverage Content Formats that Work
To create high-value content that attracts prospects and drives revenue, SaaS companies should create comparison pages with competitor tools and buyer guides to position their product as the ultimate solution. They can also create interactive calculators that prospects can use to justify a tool, for example, ROI calculators.
Track Important Metrics
Monitor metrics such as MQLs and SQLs for each content, the trial signups and demo requests from CTAs, conversion rates from content engagement, and revenue from specific content assets.
Tools like HubSpot, Salesforce, and Google Analytics can help track content touchpoints and identify high-converting content.
Demand Generation Metrics to Track Success
Brands can use several metrics to gauge the effectiveness of their marketing efforts and optimize them accordingly.
Check out some standard metrics:
- Marketing Qualified Leads (MQLs): Prospects show interest in the product by interacting with lead magnets, such as free ebook downloads. You can track this metric using any customer analytics tool, such as Salesforce, Pipedrive, Google Analytics, etc.
- Sales Qualified Leads (SQLs): These are higher-quality leads than MQLs because they seek more specific details about a product. You can also use the same tools mentioned above to measure this metric.
- Free Trial Sign-Ups: A surge in new activations signals an effective demand generation campaign.
- Conversion Rate: Shows the effectiveness of a SaaS demand generation funnel by monitoring how many free trial users turn into paying customers.
- Cost Per Acquisition: Measures the total costs of acquiring and converting a lead.
- Customer Lifetime Value (CLTV): Calculates the total revenue a SaaS product will generate from a customer. It also helps explain customer acquisition costs.
- Monthly Recurring Revenue (MRR): Measures a SaaS product’s growth potential by predicting each customer’s monthly revenue.
- Return on Investment (ROI): Shows the profit generated for every dollar spent on marketing.
- Net Promoter Score (NPS): Measures current customers’ likelihood of recommending a product. Those who give the highest scores (promoters) also benefit the brand through grassroots marketing.
- Churn Rate: Calculates the number of customers who stop using the SaaS products after a period. A high churn rate negatively impacts ROI.
Frequently Asked Questions (FAQs)
Here are quick answers to the most common questions about SaaS demand generation:
Why Do All SaaS Companies Need Demand Generation?
All SaaS companies need demand generation because it has these benefits:
- Ensures a flow of potential customers throughout the sales funnel
- Taps into an audience that hasn’t recognized the product
- Allows a business to build trust, making it easy to acquire customers
- Accelerates the time potential customers become leads
Is Demand Generation B2B or B2C?
Demand generation is applicable in B2B and B2C companies but has varying approaches.
In addition to having longer sales cycles, B2B campaigns target decision-makers, while B2C campaigns focus on specific individuals.
Demand Generation vs. Lead Generation — What’s the Difference?
Demand generation aims to create awareness and interest in an offering and brand through educational content, while lead generation seeks to identify potential leads and nurture them into buyers.
Demand generation occurs at the top of the funnel, while lead generation happens at the bottom.
What Budget Allocation Works Best for SaaS Demand Generation?
The budget allocation that works best for SaaS demand generation is to spend strategically on core acquisition channels, invest in content, and allocate funds to message testing and optimization of tactics.
Besides, allocate a budget depending on the SaaS company’s growth stage. For early-stage SaaS startups, allocate funds minimally while still figuring out which channels work. On the other hand, for a SaaS company in the scaling stage, they should allocate a considerable budget to paid acquisition and content, and less funds to new channels.
How Long Does SaaS Demand Generation Take to Show Results?
The time it takes for SaaS demand generation to show results depends on the channels and the sales cycle. For most demand generation tactics, such as email nurture campaigns and paid social, they can take 1 to 3 months to gain traction.
Additionally, if a SaaS company experiences a long sales cycle, it can take 3 to 12 months for its demand-generation efforts to show results.
Conclusion
When SaaS businesses plan and formulate marketing strategies correctly, they will see an improvement in their demand and lead-generation efforts.
As an experienced demand-generation consultant, I can help brands create data-backed strategies that empower them to thrive. We will also craft the perfect messaging for each stage of the demand generation funnel to deliver an engaging brand experience.
Schedule a discovery call to unlock better SaaS targeting and generate revenue.
