Get ready to get SaaS-y about sales funnels đ¤Łđ¤Łđ¤Ł!
In this blog, weâll explain just what a SaaS sales funnel can do that no other sales and marketing approach can come close to.
Then, weâll give you the lowdown on how you can build a SaaS sales funnel that converts like a beast â and finish up with ten pro tips that most people out there donât know about!
Sounds good? Then letâs go!
Sales can be hard, labor-intensive work. As subscription products, SaaS apps only realize revenue slowly over time. That means itâs very hard to support a high up-front cost sales operation.
Plus, SaaS businesses tend to focus on growth as their main driver of revenue and profitability. The more expensive it is to acquire new users, the harder it is to grow.
These twin issues allude to two important metrics that weâll consider later: Customer Lifetime Value (CLV) and Customer Acquisition Cost (CAC). Successful, rapid growth in SaaS depends on optimizing the ratio between these metrics â and SaaS sales funnels have proven time and again to be the most efficient way of achieving that.
But letâs not get ahead of ourselves. A SaaS sales funnel is essential because:
The way you configure your sales funnel should vary based on the maturity of your SaaS product.
Most markets are commonly broken down into these five segments:
The stages in your funnel, the content you use, and the messaging youâll need to develop all depends on the mix of these segments in your audience.
Well, that dependsâŚyou should have âas many as you needââŚđ
OK, thatâs not particularly helpful, but it is true!
Thereâs no one-size-fits-all approach for building a SaaS sales funnel that will work for every business. Selling a video recording and messaging tool for Sendspark is a different exercise from selling a CRM solution with SalesForce - but theyâre both SaaS.
The classic âAIDAâ funnel has four stages: Attention, Interest, Desire, and Action.
Various alternative versions break one or more of these down into - for example, splitting âInterestâ into two sub-stages, one for âInterestâ itself and one for âEvaluationâ. Some versions add âAdvocacyâ at the end, as customers are turned into referrers.
What the AIDA model has in its favor is that itâs a very clear account of the mental states potential customers need to progress through to become customers:
What this means for your product depends on who your audience is. Thatâs why you need to build out customer personas based on the data you have about the characteristics of your current users and the data you collect from their interactions with your website and your app.
If your data shows that your audience is very price sensitive and that youâre in a very competitive market, you might want to elaborate on an âEvaluationâ stage to make sure youâre providing the right info to prospective buyers at the right time.
If you offer a free trial but your product has a steep learning curve, you may decide that a simple sign-up doesnât count as a purchase. Perhaps only when users have activated (ie used the tool and realized the value it offers) do you consider the âActionâ stage complete - and so onboarding activities would feature in your funnel, alongside marketing and sales.
So rather than specify a particular model, weâll keep it super simple and talk about the top, middle, and bottom of the funnel you decide to build.
The top of the funnel (TOFU) is marketing and lead generation. Youâre aiming to attract people who might have an interest in a problem that your service solves.
So the channels to use are organic search/SEO, organic social media, paid search and social media advertising, email marketing, attending trade shows, etc.
The best content types for TOFU are:
Make sure your marketing automation is tracking users who visit this content, so that you can keep tailoring what they see and build out your personas even more.
The transition from TOFU to the middle of the funnel (you guessed it...MOFUđ¤Ł) comes when the visitor engages back with you - usually by handing over contact details and permission to use them.
These transition points are critical to a successful SaaS sales funnel, and you should pay very close attention to the rates of leads making it over each threshold.
Of course, getting a leadâs contact details wonât always signify the transition from TOFU to MOFU.
The middle of the funnel is when a potential user is actively exploring and evaluating different solutions â it may take many visits to your site and many emails from your drip campaign to create that intent.
MOFU content will usually be on your website or some other owned media. Content types that work well at this stage include:
The video sales letters we wrote about in this earlier blog are a classic example of MOFU content. Theyâre all about showing why your solution is the right one for the viewer, helping them to compare the market and shortlist the options.
Can you guess what BOFU meansâŚ? đ¤¨
Right.
This is where you convert interest into action, by addressing final qualms, answering outstanding questions, minimizing the sense of risk that opting for your solution involves, and maximizing the promised return.
In traditional sales, youâd be doing a lot of this face-to-face, but whatâs so great about a SaaS sales funnel is that you can automate most if not all of it through workflows built into your website.
Youâll want:
Weâve used the simplest TOFU/MOFU/BOFU funnel format in our explanation here because we want to be clear: the shape of your SaaS sales funnel should be determined by the data you collect from leads and users and what they do in practice, not by a preconceived notion of the âbestâ structure.
And that brings us on to the best metrics to use for building and optimizing your SaaS sales funnel.
Vanity metrics will lead you in the wrong direction. If you want to build a scalable, optimized sales funnel, these are the high-level KPIs you need to track:
But beyond the top-level numbers, the trick to making a sales funnel work is optimizing each touchpoint right down at the micro-level. And thatâs what weâll look at in this final section.
Video in email drip campaigns is a great way to make your messaging stand out
So there you have it! Everything you need to know about SaaS sales funnels đ.
If you need even more on creating a SaaS sales funnel that harnesses the awesome power of video in messaging, then check out our recent blog on creating a video email that converts like crazy.
It dives deep into why you need to use video emails as part of your sales funnel and how you can make sure they provide maximum impact.
Sendspark makes it quick and easy to create videos that you can send via email, share on social, or embed on your website - and to analyze their performance. Sign up now if you want to start recording and sharing videos for free.