1. SaaS sales funnel
Setting up the perfect SaaS sales funnel strategy can be tough. Not only is the SaaS landscape highly competitive, but your target audience is constantly bombarded with marketing campaigns and paid ads. As many similar businesses often compete in your shared target market, the key is standing out from the crowd.
But you have to be careful. Just as there are many businesses in your target industry, so too is there an overwhelming amount of potential customers. An effective SaaS sales funnel helps you to separate qualified from unqualified leads to avoid wasting valuable time and energy selling to unengaged parties.
Therefore, the most important goals of your SaaS sales funnel are to:
- Provide high value to your potential customers that drive more quality sign-ups, reducing your customer acquisition cost (CAC), and;
- Focus on continued quality and engagement to decrease churn and expand your customer lifetime value (CLV).
The last thing you want is to drive traffic that never moves past the acquisition stage, fail to persuade customers past the free trial and into a monthly subscription, or, acquire a customer and then lose them to poor customer service or lack of sales follow-ups.
In order to acquire, engage and retain the right audience, you have to monitor and consistently optimize key metrics.
Here are some of the steps and key metrics that make up an effective SaaS sales funnel.
The first step of your SaaS sales funnel should be getting eyeballs on your product. This works best when collaborating with marketing.
Cross-functional team collaboration and sales enablement helps you to better identify your target audience, standardize brand messaging and arm your reps with the collateral they need to boost lead generation. You can also leverage content marketing, paid advertising and PR and outreach tactics to drive more traffic to your landing page.
Here are some key acquisition metrics to measure in your SaaS funnel.
- New visitors: How many new people are landing on your site in total?
- Channel specific traffic: Through what channels are they landing on your site? If you’re running an omnichannel campaign, for example, what specific channels are driving traffic (i.e. social, organic, paid, automated)? Beyond campaigns, are visitors landing on your website through direct outreach, referrals, word of mouth, google searches or another avenue?
- Total acquisition conversions: Are these visitors completing a call-to-action (CTA)? For example, did they enter their contact information to join a newsletter or did they start a free trial?
- Signup ratio: What percentage of site visitors completed a CTA?
- Customer Acquisition Cost (CAC): How much did it cost to acquire these customers? For example, if the customer signed up for a free trial based on a paid marketing campaign, what was that cost?
- Lead Velocity Rate (LVR): How much does your qualified lead volume change month to month? What’s your average LVR?
Tracking these metrics will help you understand what’s working and what isn’t. From there, you can work with marketing to update your top of funnel messaging and outreach tactics.
You may find that customers are initially excited, but then feel they don’t learn enough to convince them to engage further. If that’s the case, you can update your educational materials and marketing strategy to better teach leads exactly how your product or service works.
Now that potential customers have shown a true interest, it’s time to move them closer to making a purchasing decision.
Use the following metrics to glean important insights that your reps can use to persuade leads to convert.
- First session length: How long is a lead interacting with your product or service the first time they use it?
- Returning Sessions/Visit Frequency: How often do they come back to use the product or service?
- Core Tasks Completion: Is the lead taking advantage of the tasks that give them the best experience with your product or service? For example, if your SaaS product helps teams enhance communication, is the lead using the collaboration features to their fullest extent?
Mapping and measuring these metrics will help your reps identify opportunities to engage with leads to move them through the funnel. If a lead has barely interacted with your product or service after their first session, for example, a rep can reach out to understand why they stopped using it and ultimately guide them back to usage. Pointing prospects towards materials like webinars or explainer videos at this stage may help to effectively reengage and reinvigorate prospects.
Here, reps motivate leads to make a purchase decision. The following metrics can help guide them on when and how to persuade leads to make an educated purchase.
- Request for live-demos: How many leads are requesting live-demos or phone calls to take a deep dive into your product or service?
- Request for quotes: How many leads are requesting quotes and showing a genuine interest?
- Free trial to paying user rate: How many leads are converting to paying customers after trying your product or service via a free trial?
Reps can use this knowledge to optimize email flows, identify opportunities to educate customers about your software and its value and update onboarding materials.
Offering prospects the flexibility to choose their ideal pricing structure makes the purchasing commitment less scary. If they’re unsure about what features they need, they can start at the lowest tier and upgrade down the line. On the other hand, ensuring that customers sign up for the right plan in the first place also reduces your churn rate, so it’s crucial to guide them to the plan that best addresses and solves their pain points.
If your SaaS business also offers a free-for-life plan, you can skip this step and get users to sign up for the free plan instead. You can then remind them to upgrade their plan later on if they want access to premium or exclusive features.
Once you close the sale, your team needs to focus on ensuring your customers get the most value from your product. Reps play a critical role in the first few weeks after purchase, as they can help customers become fluent in your product or service so as to get the most out of it. At this stage, teaming up with an account manager is ideal.
From there, the customer service team will play a crucial role in responding to support tickets and further educating the customer. Sales reps should consistently check-in, however, and identify opportunities to upsell or cross-sell products or services as time goes on.
Here’s a free SaaS sales funnel template you can use: