Software as a Service (SaaS) is a fast-evolving and vibrant industry that attracts many innovators and marketers worldwide. It’s also extremely competitive: at present there are around 5,000 companies in operation, trying to outpace each other and reach the top in terms of growth and profit.
There isn’t much room left for original solutions. Think about it. Every type of digital problem you or any other target audience experiences has the corresponding SaaS software to solve it.
Yes, it’s important to cater to the right market with a valid product that solves problems, but how can you establish a connection with your target audiences better than anybody else?
Being ahead of the marketing game largely helps. As a matter of fact, SaaS companies generally spend about 40% of their annual recurring revenue on marketing.
Hence, instead of trying to be unique and a “first” in SaaS, you’d be better off thinking of how to position your company in such a saturated environment. Staying up to date with marketing trends and changes in this fast-paced industry is one way for you to gain an advantage.
Marketing Trends for SaaS
1. Integrating Existing Solutions
In SaaS, how you fit your software into your market largely determines success or failure. And in marketing, there are two modes of distribution: horizontal and vertical.
Vertical marketing means you offer goods and services to a specific industry, trade, or profession. An example would be software that provides solutions for the healthcare industry or the hotel industry.
Meanwhile, horizontal marketing is industry-neutral, which means you can cater to a need or issue across many industries. If your accounting software can be used by retail and finance organizations, then that’s an example of a horizontal product.
Vertical marketing has been seen to exceed the growth of horizontal SaaS and enjoy more cost-effective customer acquisition measures than horizontal SaaS startups.
Want to go one step further with these two models?
On-top marketing is the answer. Whether your product is horizontally or vertically oriented, on-top marketing can apply.
The on-top marketing model enables you to enhance an already popular product. Again, it’s not about being the first to build a solution. It’s about enriching a service and gaining access to an existing customer base.
One SaaS company that has successfully done this is Veeva. They structured a vertical model for their pharmaceutical-focused CRM and other industry-specific services through the Salesforce platform. This enabled Veeva to gain the clients of an established brand without the need to market from scratch.
Indeed, their results speak to the power of integrating with existing platforms—annual revenues reach around $600 million.
2. Feature Marketing
SaaS companies constantly upgrade and modify their products. Often, more layers, features, and tools are added to products to make them stand out for potential users. And while this gives marketers more material to work with, it can also become a huge liability if treated the wrong way during campaigns.
With SaaS products, a new approach called Feature Marketing is the way to go. Why? Because it enables a more focused and informed marketing strategy for targeted audiences.
Feature Marketing is the move away from extreme Product Marketing. By breaking down SaaS marketing efforts into features, you can present an added value to potential customers more effectively. You don’t overwhelm audiences with so many features incorporated in one product. You guide them to the most important functions instead.
One example is MailChimp, a marketing automation service provider that uses effective Feature Marketing. The company creates fresh and robust campaigns for every new feature.
Corresponding feature landing pages are set up so that users get the new-feature drip campaign, rather than just the main campaign. But this new-feature campaign still leads you to their main product funnel, even though your entry point was something totally new.
3. Application of AI and ML
Since SaaS is an industry filled with computing solutions, it is inevitable that Artificial Intelligence (AI) and Machine Learning (ML) are both finding their place in SaaS companies.
SaaS marketing processes can be heavily influenced by AI and ML, as the very nature of cloud service makes SaaS quite open to automated means of operations.
In SaaS, companies always need up-to-date data. AI and ML can be used to automate retrieval as well as mass processing of data without requiring effort from human resource.
Possible areas of application for AI and ML include hyper-personalization, chatbots and assistants, drop off alerts, hands-off A/B testing, and predictive analytics.
If you’re closely involved in SaaS, you may have observed that some of these technologies are already prominent in most marketing strategies. As these enable sophisticated and streamlined marketing efforts, intelligent tech will only continue to fuel the SaaS industry in the near future.
4. Personalized Interaction
Providing targeted conversation not only gives SaaS an opportunity to engage qualified leads, it can support customer onboarding.
In relation to the aforementioned trend, one marketing tactic that can be enriched by AI and ML is customer interaction. For SaaS to be successful, you need to offer a blend of interactive live chats and chatbots that personalize interactions per site visitor.
It’s time to move away from those dull and uninspired lead forms, annoying pop-ups, and bland messages. The new tactic involves intelligent tech that analyzes and predicts behavior, so that you engage with customers the right way.
Aside from offering a human-like connection with potential customers, chatbots and live chats cater to the growing need for fast and immediate service.
Since customer service is a big factor in fostering trust and encouraging repeat purchases, SaaS companies need to guarantee an excellent provision of customer support.
With the right setup and testing, companies can do it more efficiently with AI and ML.
5. Transparent Thought Leadership
Establishing your brand as a thought leader through great content is the essence of inbound marketing. Fresh, insightful, and informative content gets users’ attention.
But aside from providing industry knowledge and updates, you can stand out further by being completely transparent. How? By sharing both good and bad about the industry and your company results.
This adds an endearing dimension to your content marketing efforts. It gives potential customers the idea that you are not just another faceless software company. By sharing your own brand journey, you add a humanizing aspect to your campaigns.
Buffer is one company that took this approach. By publishing articles like “We Made These 10 Social Media Mistakes So You Don’t Have To,” the social media management software offers a new angle on what it means to be an authority source.
It’s a cautionary style, but it still ties back to the main product that Buffer is offering.
SaaS is a dynamic and fast-paced industry, with trends that present opportunities for growth and success. For SaaS marketers, taking on the competition means finding new ways to strengthen marketing efforts.
These marketing trends highlight how the latest technologies can be used to create more segmented and personalized marketing strategies. Use these insights to review your current processes and enable more successful customer engagement and conversion.