Create an effective sales funnel for your SaaS business
Perspectives from Icarus Media Digital
Building a sales funnel that converts is an effective way for a SaaS business to grow and succeed over the long term. At Icarus Media Digital, we create SaaS start-ups from the seed of an idea through to launch. In this article, we’ll share our top tips on how to create a sales funnel that predictably attracts and converts your ideal clients.
What is a sales funnel?
A sales funnel is a map of your customer’s journey, starting from when they first hear about your software through to demonstrating its value and enrolling them to become a paying customer and loyal user.
There are countless ways to build sales funnels. We’ve found the most effective ones take potential clients through the following four stages:
1. Awareness — This is when your potential customers first find out about your SaaS product and how it could help them. You may reach them through advertising or organic social media content, amongst other methods.
2. Interest — Here, prospects find out more about the features and benefits of your SaaS. They may engage with your content, sign up for a newsletter or download a free resource.
3. Consideration — Prospects research your solution, comparing it to your competitors, and ideally, the desire for your solution builds. Prospects may engage with a demo or a sales call at this stage.
4. Action — The final step is encouraging the prospect to become a paying client.
How to build a sales funnel that delivers results
A sales funnel is an important element of your overall marketing strategy and tends to be most effective when it is developed as a collaboration between sales and marketing teams if your SaaS has distinct sales and marketing roles. We recommend tasking your marketing lead to map out how the funnel connects and aligns with other aspects of your marketing plan.
While building a sales funnel isn’t rocket science, it’s easy to miss key steps. Here are our top tips for creating a funnel that is effective:
1. Deeply understand your future clients: You’ll have heard this many times before when working on marketing or proposition development. The first step to a successful funnel is to define who you want to convert to a client of your SaaS. This depth of thinking should already be built into the design and development of your SaaS so the software clearly solves a pressing issue for your target clients.
2. Clarify your value proposition: A compelling value proposition is the basic premise of a successful SaaS. Before working on your funnel, ensure you can articulate what makes your software special and how it will help your future clients.
3. Add value and demonstrate expertise: A great way to add value to potential clients is through creating engaging and helpful content, such as blog posts, videos, webinars, and eBooks, that help to solve the problems that, ultimately, your SaaS is the main solution for. This content is typically free and helps to build trust and your brand’s reputation. You can use paid advertising to drive traffic to your value-adding content or alternatively build up an audience over time with more organic methods, such as posts on social media channels, search-engine-optimised blog content, guest appearances on podcasts, etc.
4. Give prospects an incentive to share their details: Leveraging the interest created by your free content, create lead generation forms on your website that encourage potential clients to give their contact details and consent for you to contact them in response to receiving something valuable, such as a free trial or more valuable content. Make sure you are briefed on data handling legislation, such as GDPR, when collecting, storing and using personal data.
5. Get the right back-end technology: A solid CRM system is a worthwhile investment to manage your leads and track the sales funnel’s performance.
6. Nurture your audience: Nurture the leads you collect by sending helpful email sequences that provide value, answer questions, highlight why your software is the best solution to their challenges and personalise the emails based on their interactions.
7. Segment your list: The more you target your emails to the needs, interest level and lifestyle of your prospects, the more success you are likely to have with converting them to paying clients.
8. Track metrics: Track the key metrics on interactions with your emails and conversions so you can constantly improve your automated nurture sequences. Done well, over time, this can support you in generating consistent sales for your SaaS.
9. Compelling incentives and offers: Free trials, discounts, promotions — use them strategically to nudge leads closer to becoming customers. Limited-time discounts and free trials can be effective ways of capturing attention and creating some urgency around taking action. Client reviews and testimonials also help to build trust and the confidence to buy.
10. Clear pricing: Transparently outlining your pricing and payment models can remove friction in the buying process as prospects reach the action stage of your funnel. The most popular pricing models for SaaS businesses include:
● The freemium model which offers a free limited version of the product. Customers who enjoy their initial access are encouraged to upgrade to a paid premium version with more features. Having a good experience with the free version reduces friction around the upsale.
● A trial offer providing a free trial for a set time, allowing users to test drive the SaaS before committing to paying for it.
● Pay-as-you-go models that charge users based on how much time, data or functionality they use. This can be a helpful model for clients who only need the service at certain points in the year. However, it can be problematic for SaaS businesses that seek to have a steady monthly or quarterly revenue.
● The subscription model charging a monthly or yearly fee. It’s a popular model amongst SaaS owners due to the regular recurring revenue it provides.
11. Take a proactive approach to customer loyalty: Ensure your onboarding process is seamless. Keep engaging with your clients post-purchase with valuable content and feature updates. This positive experience will increase the chances that they recommend you. You may also consider an affiliate programme or other rewards to incentivise customer referrals.
Optimising your sales funnel
Creating your funnel is not a once-and-done exercise, and it will require tweaks and optimisation to maximise sales over time. The starting point for this optimisation process is defining and tracking the key metrics that tell you what is and isn’t working, such as:
● Click through rates
● Leads generated
● Conversion rates
● Return on your marketing spend
● Customer churn rate, i.e. how many clients you are losing in a specific time period
● Customer lifetime value.
With these metrics, you can make data-driven adjustments to the funnel and track the impact. You can run tests on different messaging, deals, and plans to see what resonates with your audience over time.
Conclusion
An effective sales funnel that attracts, converts, and helps to retain customers is critical for most SaaS businesses. The most successful SaaS businesses will evolve their funnel in line with the market, competition and customer needs. Experimentation is key to staying ahead of the competition.
Building an effective sales funnel and optimising it takes work, and it’s work that pays off when you are converting leads on repeat and generating a stable and growing profit.
Keep in touch
To follow our work at Icarus Media Digital, check out our blog and social media channels:
