The B2B Software as a Service (SaaS) industry is growing more competitive by the minute. If you are looking to increase your SaaS conversions, you have to build a well-structured and reliable sales funnel that optimizes the customer journey.
Your sales funnel should be measurable so you can easily pinpoint and reinforce weak touchpoints to avoid customers dropping off and not completing a purchase. Having a preplanned sales funnel approach as part of your pitch deck can also help you reel in investors and buyers a lot faster!
What is a sales funnel?
Building a sales funnel means mapping your customer’s experience from start to finish. A well-designed sales funnel can turn a regular site visitor or a lead into a paying customer. It is a selling process where the customer goes through multiple stages.
Sales funnel frameworks
Each industry follows different sales funnel processes, and for SaaS, there is no one-size-fits-all approach. One of the most popular approaches, however, is based on the AIDA framework:
- Awareness - the process of building your online presence and making sure your content reaches your leads.
- Interest - capturing the attention of your sales leads and generating interest in your products or services. This is the stage where your marketing efforts inspire the potential buyer into researching your offerings.
- Desire - the stage when your leads realize they want to use your software, and they start seeing it as a potential solution to their problems.
- Action - moving your leads towards finalizing the purchase through calls to action (CTA).
Although the abbreviation omits it, the AIDA framework sometimes includes “Retention” as the last stage of the customer journey (AIDAR). The SaaS marketing and sales efforts are heavily focused on customer retention. Persuading existing customers to purchase again from your SaaS company is a lot cheaper than generating new sales leads, and it also helps you maintain a predictable revenue stream. Following a SaaS financial model template can help you project your future revenue expectations and plan each step in your sales funnel.
Retention equals brand loyalty, which is why SaaS companies have to make sure that they are motivating existing customers to renew their contracts, upgrade to a more expensive package, or refer your software to other people.
Retention is not always the last step in your sales funnel. The AARRR framework, which follows five steps to conversion, is a good example of this:
- Acquisition - acquiring visitors from different channels (website visits, social media posts, app store, ads, etc.)
- Activation - the transformation of visitors to users by trying out your products/services (newsletter sign-ups, contact form leads, free trials, etc.)
- Retention - encouraging existing users to return for more. This is where you target them with email campaigns, provide good customer support, offer discounts, etc.
- Referral - having satisfied users recommend your product/software to others fueled by loyalty programs.
- Revenue - satisfied users become customers by purchasing your products/services.
Ultimately, the stages that you will be implementing in your sales funnel will depend on the type of SaaS applications you are offering your prospective clients (CRM, web hosting, e-commerce, project management, email marketing, accounting and invoicing services, etc.)
Building a sales funnel
The simplest way to build a sales funnel that fits your SaaS business needs is to divide the process into three parts:
- Top of the funnel
The top of the funnel represents the awareness stage when you focus your marketing efforts on generating leads. Your goal is to attract people who can benefit from your software and get their contact information by having them download a guide, subscribe to your newsletter, sign up for a free trial, etc. To get their information, you need to convince them that you are an expert in your field and offer value to them.
You can do this by:
- Creating SEO-friendly content such as blog posts, articles, infographics, videos, podcasts, and landing pages that answer your prospects’ questions and educate them.
- Designing lead magnets such as guides, checklists, whitepapers, etc. Lead magnets are often offered on your landing pages and your prospects can access them in exchange for personal contact information.
- Engaging in social media marketing where you promote your content and lead magnets through organic posts and paid ads. The goal is to drive traffic towards conversion touchpoints.
- Middle of the funnel
Just because a lead has given you their contact information, that does not mean that they transitioned to the middle of the funnel. The middle of the funnel is when your leads are actively researching and evaluating solutions for their needs. Given the big competition in the SaaS market, this is the point when you have to convince your potential buyers that your solution is what they need.
Types of content that work in this stage include:
- Free trials
- Product demos
- Video courses
- Case studies
- Phone or online calls (Zoom, Skype, Meets, Teams)
To attract the right people you have to know your perfect prospect. Who are the people that are most likely to benefit from your software? What keywords are they most likely to research? What triggers them to purchase? You can even use an AI to optimize your pitch for every prospect by having it analyze their behavioral traits and preferences.
After you get to know your prospects, it is important to segment them and use different targeting techniques for different types of buyer personas. A great way to segment your prospects effectively is to use technographics in your sales process. Technographic data combines technology and demographics and shows you which prospects are most likely to convert based on the type of technology and tools they are using. That way you can know ahead of time when they started using a particular product or software and when their contract should be renewed, making it easier for you to personalize their customer journey.
- Bottom of the funnel
The bottom of the funnel (BOFU) is where your lead takes action. High-performing sales teams know that this is the stage when they should reinforce the purchasing intent with appealing pricing pages, special offers and discounts, product comparisons, and customer testimonials and reviews.
Reaching the bottom of the sales funnel is not the end though. A purchase has to be followed by user-friendly onboarding materials and walkthroughs, upsells for free products, and referral programs. Maintaining the interest and trust of your purchasing customers and motivating them to buy again from you is especially important for SaaS companies using the software subscription model. You need to keep your existing customers engaged so they do not switch your company for a new one after the end of their contract.
The good thing about the SaaS sales funnel is that it is largely automated. You can attract a large number of potential leads and nurture a good relationship with all of them without having to do it face-to-face. Remember, there is no such thing as the perfect SaaS sales funnel structure. You should optimize each touchpoint, customize your messaging, and design the customer journey in a way that helps leads move from one stage to the other without any obstacles.