SaaS Funnels
I originally wrote this as a LinkedIn posting but decided I did not want to play the LinkedIn game.
Always Talk to Customers
Over the last year I’ve been on both sides of the SaaS pipeline, first as Chief Revenue Officer, and on the the flip side, as a buyer of SaaS HR services in my role as a Chief Operating Officer.
The SaaS pipeline is the backbone of any SaaS business, shepherding potential customers from initial awareness to final purchase and beyond. The pipeline can be broken down into the following high level stages:
Lead Generation
This is the start of the process. Using various marketing techniques like Content Marketing, Search Engine Optimization (SEO), Paid Advertising, and Social Media posts to generate awareness and interest in the product. There are also thousands of Lead Generation agencies and services out there that promise to bring in qualified leads for you. Buyer beware.
Marketing Qualified Lead
This is the process of initial lead qualification. Any number of actions by the potential customer can indicate that they are valid and qualified leads, like downloading a white paper, or spending significant time on your page. Typically this might be done in a highly automated way and by people in the marketing function.
Sales Qualified Lead
When a MQL is passed to sales further qualification is needed. To reach SQL status the MQL needs to be qualified against specific criteria. A common one is BANT, which is an acronym for Budget, Authority, Need, and Timeline. SQLs promise a higher intent to purchase.
Conversion
This is the process of Sales engagement and further nurturing with a goal to turn the SQL into a paying customer. This may involve any number of usually consultative selling techniques such as sales presentations, product demos, business case development in collaboration with the potential customer.
Customer Success
Beyond conversion SaaS companies have a variety of functions and roles focused on helping customers get the most from their product. Further up selling is a goal of these teams.
In my role as CRO for a B2B SaaS software development tooling company I embarked on a process of understanding the customers self service on-boarding. I found that flow was not simple and linear, but complex with multiple branches. Even for developers who are often the most technical of buyers. Since the freemium model was a key part of the companies sales process this led to significant drop off in people willing to go through the flow. A revised and simple flow was needed to increase the number of people who tried the software.
On the flip side as a buyer of HR products I found that many companies threw unnecessary barriers into the process. When I request a product demo I don’t need an intermediary call before getting the the product demo. While this may be a documented and enforced part of the process companies should ask themselves if they are being wasteful of customer time. Of the three companies I talked to the one that did the product demo right away, had a single person who could answer all my questions, and was not overy pushy clearly stood out.
For SaaS companies this lead nurturing process is critical to their success. The process and steps should be reviewed periodically (every six months). It should not just be looked at from the inside as a sales funnel. Understanding how customers experience the process is critical to making things easy for them and ultimately raising customer sign ups and revenue.