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4 Reasons SaaS Companies Need Inbound Marketing

Posted by Casey Lewis on Thursday, January 7, 2016

Topics: Inbound Marketing

saas-companies-need-inbound-marketingSoftware-as-a-Service, or SaaS, is currently one of the hottest markets. According to a forecast by Forrester in January 2015, global SaaS software revenue is expected to reach $106 billion in 2016. At this rate of industry growth, there’s bound to be a steep increase in competition, and that means there will also be heavy pressure for SaaS startups to find ways to stand out above the rest of the pack. One way that some SaaS companies have differentiated themselves and achieved significant growth is by embracing inbound marketing, which addresses the needs of SaaS marketers in a number of ways.

1. Inbound marketing helps increase the lifetime value (LTV) of your customers.

The SaaS business model is all about long-term relationships with your customers. It’s not a quick, one-time sale. There may or may not be an initial upfront investment, but what you’re really after is ongoing monthly or annual subscriptions for your clients. Inbound marketing provides an ideal platform for keeping in touch with your clients over time by making it easy to track every step of their progress from their first visit to your website.

2. Inbound marketing also decreases customer acquisition costs (CAC).

With the fierce competition in the SaaS market, it’s also crucial to keep customer acquisition costs (CAC) as low as possible. In old school business models, a high CAC was offset by upfront revenue at the time of the sale. But things are somewhat inverted in the SaaS model. Revenue is almost all received over a long period of time, so CAC needs to be kept as low as possible. Inbound marketing provides the perfect response to this need, with leads typically costing 60% of what would be expected using outdated “outbound” marketing methods.

3. Engaging content establishes you as an authority in your field.

In a competitive market, you need to provide additional value to your customers, and earn their trust. Inbound marketing is based on providing informative original content to attract and retain customers. Your inbound campaign begins with success stories, case studies, and general industry information about solutions to challenges that are faced by your target market, to entice and engage new clients. For existing customers, you can provide more in-depth content showcasing new features, tips on optimizing their use of your software, and so on, to retain and upsell.

4. Inbound marketing increases your conversion rate.

When you’re so concerned with the cost of getting leads, you can’t afford to let too many of them die on the vine. Well-run inbound marketing campaigns have consistently shown a significant improvement in the rate of turning website visitors into qualified leads. Keep in mind that when you’re selling SaaS, a conversion is simply someone who signs up for a free trial of your software. So much of inbound marketing is really all about attracting people to your site for free content. It’s natural for SaaS companies to use inbound marketing to attract people to try a free demo.

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