Software as a service (SaaS), the distribution of software over the internet to users, is becoming the fastest growing software distribution model. As business consumers adopt cloud-based software to manage key business functions, the market for Sass services continues to grow at a meteoric pace. Along with its Cloud cousins, infrastructure as a service (IaaS) and platform as a service (PaaS), the market for third p[arty provided software is predicted to surpass $112.8 billion by 2019 , outpacing traditional software product delivery by a multiple of five. In 2019, it is forecasted that the cloud software delivery model will likely account for $1 of every $4.59 spent on software.
This significant growth pattern has SaaS providers salivating over the potential growth in profits and market share. Unlike tangible products, marketing an unfamiliar intangible which is delivered from the cloud can be a formidable marketing challenge. Add to the mix the insane pace of product upgrades, ease of market entry and short sales cycle and the challenge to capture, maintain and sustain growth can be daunting, even to the most experienced marketing professionals. “SaaS sales, is all about rapid sales” say Peter Cohen, managing partner of SaaS Marketing Strategy Advisors.
The path to profitability requires a strategy to uniquely differentiate your solution to customers, focus on retaining current customers and to provide an unrelenting commitment to service, not software. The approach to selling customers is more of a “free trial offer” than one of free golf outings, major league sports tickets and comforting resort retreats. While “free” may be the initial hook, it becomes critical to covert, covert, convert.
According to Gartner, 80% of all future SaaS revenue will come from just 20% of current customers. A study by Bain & Company found that focusing just five percent of your marketing efforts on retention can generate an increase in profitability by 75%. It’s essential to create marketing content that is directed specifically to addressing each client’s unique needs.
A proper marketing strategy includes elements that seek to gain market share, focus on customer retention, successfully monetizes services, and one that contains an attainable plan for sustained growth over the long term. Lincoln Murphy, a Customer Success Consultant offers, “When creating your SaaS marketing plan, you must understand that your business model of choice is a fully-integrated architecture where all aspects of the business — product, support, revenue model, and marketing — are tightly-coupled.”
“At Junction Creative Solutions (Junction), we have a growing list of SaaS clients who are benefiting from our understanding and insights of the frantic SaaS marketplace”, says Julie Gareleck, Founder and CEO. “Our experience has led us to become uniquely qualified to develop successful growth oriented, customer centric strategies that can lead our clients to long term sustainable growth.”
Gareleck comments, “Consumer behavior is continually changing, with a sharp decrease in brand loyalty. General industry growth will offer an opportunity for SaaS companies to engage more customers but the value of the software has to be sticky. It has to satisfy a business need or solve a business challenge. In the absence of a strategy, sustained growth can prove challenging.”
Contact julie@junction-creative.com to learn more about our success stories with SaaS based companies!