Marketing that Drives Cloud Business Success

Seize the Digital Advantage

CHALLENGE:

Software, platform, and infrastructure as a service (SaaS, PaaS and IaaS) are the platforms for most new B2B products. Lots has been written about the advantages to the customer to buy a cloud or SaaS offering, but why is marketing SaaS offerings different? What’s different about the SaaS/cloud business models?

Revenue comes from Lifetime Value (LTV), not the initial sale. First-year revenues can fall 75% or more in comparison to on-premise software. The bulk of vendor earnings comes in later years, augmented by selling add-on modules and cross-selling additional products*.  As a result reducing customer churn and maximizing lifetime value is vital for success.

Managing Customer Acquisition Costs – In 2012, the average SaaS based company spent $0.92 for every $1 of first year annual contract value, leaving little scope for profitable growth.** As a result, controlling the cost of attracting and acquiring new customers is much more critical to a successful SaaS business model than to on-premise software.

As a result, lowering customer acquisition costs, while increasing lifetime value are essential for a successful SaaS or cloud offering. Without addressing these, you are competing in a new market with old tools.

 

SOLUTION:

  • Shorten the sales process by making the initial purchase easier to understand, to evaluate, to justify and recommend.
  • Repackage your product(s) to lower the initial purchase price and simplify integration into your customer’s existing business processes.
  • Tune your value proposition and communications strategy to focus on increasing your product’s business value, while at the same time focusing on your prospect’s pain points and emphasizing the urgency of solving their problem.
  • Leverage the power of the web to generate lower cost and higher qualified by understanding and answering the questions your prospects have before they make the decision to purchase your product or offering.
  • Ensure that the leads marketing is generating are of the highest quality and that sales is taking appropriate timely action with the leads that marketing delivers.
  • Measure and manage your cloud business using customer acquisition cost (CAC), lifetime value (LTV) and customer churn as key performance indicators (KPIs).

How Boston CMO can help:

Differences in the business models between on-premise and cloud-based products have key implications for marketing organizations. We help enhance competitive advantage and increase offer value, via affordable, customized marketing solutions including any or all of the following:

  • Customer Personas  We help you understand target-customers’ needs through the lens of a SaaS offering purchase via our persona development process. We work with you to identify ways to shorten the purchase process and make your offering easier to understand, evaluate, justify and recommend.
  • Buyer’s Journey and Campaign Design -We work with you to map your buyers’ journey(s), by identifying the questions they need answered along their path to making the decision to purchase your products. We also consider the further support questions they will have to integrate your product into their business processes, so they are more likely to stay with you and renew when the time comes.

    We work with you to develop a content strategy and content that create winning marketing campaigns. We show you ways in which you can make each part of your campaign educational, helpful, timely, customized, and consistent–in other words, memorable!

  • Marketing and Sales Alignment – To ensure your marketing investments pay off, you need strong processes; assurance that sales people will follow-up on warm leads in a timely manner and rapid feedback when marketing-qualified leads need further nurturing before sales can convert them to orders. We work with you to develop the relationships and processes that drive the efficiency and effectiveness of your lead-generation machine.
  • Metrics and Reporting – We work with you to measure customer acquisition cost, lifetime value and customer churn – three key metrics for managing SaaS success. We help you to develop the metrics that tie to both your company’s business strategy and your marketing goals. 

To learn how HubSpot uses these metrics to grow their business, see our recent blog How HubSpot Used Customer Centric Metrics to Fix Their Growth Problem.

Related Article:  Boston CMO Buyer Persona Template

Related Article: Buyer’s Journey Development Guide

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