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4 ways to reduce SaaS customer acquisition costs



Kirjoittanut: Sanni Salokangas - tiimistä Kaaos.

Esseen tyyppi: Blogiessee / 1 esseepistettä.
Esseen arvioitu lukuaika on 3 minuuttia.

Acquiring a customer for zero euros would be nice. Really nice in that matter. However, it is easier said than done and honestly, not always the most effective way. Being able to turn a prospect into a customer without any marketing money spend is surely a skill and good for business. High customer acquisition costs eat away from the profit made from that customer and driving to push CAC as down as effectively possible might be something to thrive towards.

However, it is good to remember that zero money spent on marketing is not always optimal even if it does expand your customer base and increase sales. Brands have been paying for marketing for centuries, simply because it is proven to increase sales and retention. Paid marketing should be used as a tool to boost sales next to marketing that costs the business zero money! That being said, here are 5 practical ways to reduce customer acquisition costs for SaaS business model. Because lower marketing budget in the beginning of your startup journey doesn’t necessarily hurt the wallet (Or the investor’s wallet).

 

  1. Tracking the right metrics

Where are your customers from, what do they do and why did they click off? Tracking all aspects of the lead generation and sale generation of SaaS company is important. A business should recognize the variety and differences in customer base and be able to pinpoint in which areas they live, what platforms they use, age range or even interests. These types of information are crucial when, for example, launching a targeted ad campaign. In addition, tracking customer patterns within an online store helps the business navigate through pitfalls in the interface and save vast amounts of money in the long run of customer acquisition.

 

  1. Building a great sales funnel

After putting in all the work with optimized marketing and making a lead to the landing page, it is very easy to end up dropping the lead with a bad marketing funnel. If the sales funnel is really bad, the potential lead will probably not even make it to the landing page itself! In SaaS companies the emphasis of a great marketing and sales funnel is double as important, simply because the business operates solely online.

An effective marketing funnel is optimized, branded and creates the need to buy. It should also be simple and easy to follow so that the risk of losing a lead is minimized. A great practical example for businesses promoting on TikTok: Don’t place a website URL in the bio. Consider leading a prospect to the business’s Instagram page first and then to the business’s website. And make sure to DM them…I’m serious, it works.

 

TikTok: Don’t place a website URL in the bio. Consider leading a prospect to the business’s Instagram page first and then to the business’s website. And make sure to DM them…I’m serious, it works.

 

  1. Social media marketing

Ah, the future of marketing! What is better than a business being able to access millions and millions of viewers with something as simple as short, low-to-no budget videos? Businesses save immense amounts of marketing money yearly by optimizing their social media channels for free exposure. Social media marketing can even be

totally free for a business, when in the know of how the platforms work. Algorithm and prospect behavior is a subject of research like any other research field a business explores. Keeping the business updated on any changes, fads and trends make it much easier to actually succeed with free social media marketing.

 

  1. Automation, your new best friend

The business that fails to take advantage of automation is a company resisting growth. SaaS companies especially have so many things they can and should use automation for. To come up with ways and targets to use it, only imagination is the limit. The new wave of AI has made sure of that!

A business should at least automate managing pre-sale leads (why not post-sale too) and trial to sale conversions (how many free trial or freemium users converted into paying customers). On top of these, one can automate writing and sending email campaigns, scheduling, coming up with product descriptions, models of customer service like chatbots, even product pictures can be created with AI. The amount of work a business used to spend hours on weekly or daily, can now be delegated to AI. Beautiful!

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