Don’t talk techie to SaaS buyers

No matter how wonderful your proprietary algorithms, the priceless virtues of your state-of-the-art platform, or the brilliance of whatever other sophisticated technologies you’ve got under the hood of your software-as-a service (SaaS) solution, here’s an unpleasant truth:  Lots of your customers don’t really care.

Most of your them only want to know what your solution does, not how it works.

In fact, sometimes all that techie talk just goes right over their heads.  They’re experts in whatever field they’re in, but they don’t necessarily have a technical background. 

Limited IT input

After all, one of the key attractions of SaaS is that it usually requires no technical background.  The buyer isn’t responsible for on-premises hosting, deployment, on-going maintenance, or periodic upgrades, so the folks in IT with a technical background play only a limited role in evaluating solutions.

When IT does have a role in evaluating SaaS solutions, it’s usually in a secondary, review capacity, not in the lead.  They need to ensure that the solution adheres to certain standards for security, reliability, and performance, and that it can be integrated with other applications. 

And if those issues are likely to come up at some point in the purchase process, you’ll certainly need some marketing material that addresses them.

But that kind of technical detail usually won’t have much impact on the people who take the lead in the evaluation and purchase process.  These folks typically have responsibility for a particular business function:

  • It’s a sales manager that needs to manage deals in the pipeline
  • It’s a recruiter that needs to track applicants
  • It’s an accounts payable manager that needs to process invoices, and so on.

Speak in the decision-makers’ language

Don’t talk techie to your buyers.  Instead, you need to talk to them in the language of a sales manager, a recruiter, or an AP manager.  (See “Your customer has a day job.”)

If they’re in a particular industry, you need to speak the language of their industry.  Hospital administrators talk about patients, real estate managers talk about properties, and commercial bankers talk about borrowers. 

You need to show that you understand the unique needs of their particular industry.  They’re the ones buying and using your solution.

Talking techie to them is a waste of time.  In fact, it may get you routed to IT, a place you don’t want to be.  An executive selling SaaS solutions to healthcare companies told me recently that when their sales people get passed to IT, he knows the opportunity is heading toward a dead-end.

Focus on business goals

Instead of hearing about your super fantastic technology, the people buying your solution want to hear about how you can help them reach their business goals.  What can it do to:

  • Boost revenues
  • Cut costs
  • Satisfy customers
  • Retain employees
  • Or attain other business goals.  

Of course, your technology is behind all of that.  It’s what makes your solution go.

But the primary evaluators and decision-makers don’t always need to look under the hood.  Talk to them about what your solution does, not how it works.



Do your customers know what you’re selling?

Sometimes marketing pros focus on the wrong things.  

When there’s a problem attracting prospective customers, marketers usually look first at their lead generation programs.  They ask questions like:

  • Is our email campaign targeting the right people? 
  • Is our website visible to search engines?  
  • Are we participating in the right events? 
  • Are our social media campaigns working?”

And sometimes they will, indeed, find that certain lead gen programs aren’t working.  

Or they’ll find bottlenecks or gaps in the process and they’re losing prospects somewhere in the evaluation and purchase journey.

A message problem, not a program problem

But oftentimes the problem is more fundamental.  The problem is not with any particular program;  the problem is with the message.

The prospective customer simply doesn’t know what the vendor is selling.

They come to the website, read the email, or see them at an event… but they can’t figure out what problem the vendor’s solution might solve for them.

They might find a long list of features and even an extended discussion on how the solution is built.  But they won’t get an easy answer to a couple of simple questions:

What is this solution, and what problem does it solve for my business?

How does this happen?

Most companies start out with good answers to these fundamental questions.  In fact, often the solution has been built with the precise intention to solve a particular problem.

One client of mine, for example, started life as a landlord, struggling to manage all the details of managing rental property.  They couldn’t find a cost-effective solution, so they decided to build their own.  Buildium has now been adopted by more than 12,000 other property managers.  And it’s clear what problem they solve for their customers.

But too often this original simple idea – “let’s build a solution to a solve an urgent problem” – gets lost.  Or at least it gets covered over by lots of technical details.  

The messages about the product no longer focus on “what it does.”  Instead, they’re all about “how it works.”  A prospective customer needs to work too hard to understand what the solution is and why they might need it. 

And anything that makes the prospect work too hard is usually a bad thing.  These folks don’t have a lot of time to spend trying to figure out whether a particular solution is something they can use.  They have day jobs.  (See “Your prospect has a day job.”)

Fixing the problem

The good news is that this problem is fixable.  In fact, when clients call me to ask me to help them acquire customers, I first look at their messages:  Is it clear what they sell and why someone should buy it from them?

Sometimes a few tweaks can help, but sometimes a complete overhaul is in order.

There are a few different ways to develop a clearer, more effective message that better describes the solution:

  • Have an outsider look at they messages, especially someone with an expert eye who’s seen a lot of them.  (Drop me a note if you’d like to talk.)
  • Ask existing customers to explain why they bought the solution and why they find it useful.  
  • Listen to the most effective sales person present the solution to a prospect.  Often they’ve developed a simpler, more compelling message than the “official” version.
  • See how direct competitors present themselves.  While it’s important to distinguish a solution from competitors, it’s worth seeing which elements are working for them.

Create a messaging guide

And once you’ve crafted a concise, clear and compelling value proposition and messages – something your prospective customers will quickly grasp – it’s important to write it down.  

I often do this in the form of a “Value Proposition and Messages Guide.”  (See “To deliver a consistent message, you need a script.”)  This is something that you can cut and paste from liberally as they prepare websites, email, white papers, or any other marketing material.

When marketing professionals are struggling to generate more leads, qualify more opportunities, and nudge people toward a purchase, sometimes the problem is in the programs. They’re not run well or they’re poorly targeted.

But often the problem isn’t with the programs; the problem is with the message.  Prospective customers simply can’t figure out what exactly you sell and why they ought to buy it. 

Copyright ©2016 SaaS Marketing Strategy Advisors, Inc.  All rights reserved.

Your prospect has a day job

Just because you may be spending all your time to market and sell your solution, doesn’t mean your prospect is spending all their time evaluating it.

These prospects have other things do to.  In most cases, the person looking at your software-as-a-service (SaaS) solution isn’t assigned full time to evaluate and buy new software for the business.

Instead, they’re accountants working in Finance, recruiters working in HR, or sales managers trying to hit their quota. Or if you sell into a particular vertical market, they might be property managers dealing with tenants, consultants working with clients, or dentists treating patients.

Evaluation is an on-again, off-again process

Rarely do they have days or weeks to pore over every feature and function.  And their research is often interrupted, so they can only focus intermittently.  One minute they’re carefully considering your solution, and the next minute there’s something more pressing that’s grabbed their attention.  

Even when they sign up for a free trial, most prospects will only spend a couple of hours actually trying out the product.

It’s not that they don’t care.  They know the solution may be critical to their business and that making a bad choice will be painful.  The problem is that they simply don’t have a lot of uninterrupted time to do a thorough evaluation and make a purchase.

With so little time, in fact, they often end up doing nothing.  When I talk to “lost prospects,” many of them aren’t really “lost” at all.  They’re just “on hold” and haven’t made any decision at all yet.  

I’ve learned a few lessons on how marketers can reach busy prospects like these.

Stay in front of prospects over a long period

Because your prospects can only focus on your solution in a bit of time here and a bit of time there – and you’re not really sure when exactly when that bit of time will be – you need to stay in front of them over a long period.  When they’re ready to refocus on finding a solution, you want to be top-of-mind.

By the way, when I talk about staying in front of your prospects, I’m not saying deluge them with spam.  Educational material on best practices or industry trends will usually make a better impression than a stream of promotions.  And of course, offer an easy way to opt out.  (See “Content:  More isn’t always better.“)

Provide a clear path for them to take the next step  

In your communications, make it easy for the prospect to signal that they’re ready to take the next step.  Provide a form, put up a “Chat Now” box, or post a toll-free phone number.  Lead scoring and other techniques can help you know when prospects are ready, but sometimes they’ll just tell you themselves.

Do it cost-effectively

To make this “stay in front of them for a long time” approach work, you need to keep your costs under control.  SaaS companies need to pay close attention to the cost of acquiring customers.  Staying in contact via email, newsletters, and webinars might be more cost-effective than other means.  Save the more expensive outbound calls for prospects who have already signaled that they’re ready to talk directly with someone.

Be ready when they’re ready

When prospects do signal that they’re ready to talk about a purchase, make sure you’re ready too.  Someone should be available to quickly answer the email, pick up the phone, or respond to the “Tell me more” form.  The window of opportunity is open for only a short while.  (See “SaaS buyers are quick to buy.“)  If you drop the ball here and ignore prospects that are eager for attention, that’s frustrating for them and a lost sales opportunity for you.

Selling solutions to busy people is a challenge, and for most SaaS solutions, you’re always selling to busy people.  I’ve found, in fact, that when a prospect does have lots of time on their hands, they’re usually not very a good prospect.





To deliver a consistent message, you need a script

Here’s the easiest way to waste your marketing budget:  spend money to promote your message… before you know what your message is. 

Until you’ve developed a compelling and consistent value proposition, there’s no sense in broadcasting anything out to the world.

Unfortunately, I see this all the time: a beautifully designed website, a well-produced video, or a clever email campaign that doesn’t clearly convey the company’s message.  They make the prospective customer work way too hard to figure out what’s being sold and why they might buy it.

And to make matters worse, often each of these marketing deliverable tells a different story.  It’s tough enough to make an impression on a prospect; it’s almost impossible if you deliver a different message every time you get in front of them.

Without a consistent and compelling message, none of your marketing programs has any impact.  The money spent on search engine optimization, paid search, email campaigns, webinars, events or whatever else you do to promote your company is wasted.  And in the software-as-a-service (SaaS) world, wasting the sales and marketing budget is a quick ticket to failure.  (See “Bad leads cost you money“).

What should someone buy your product?

Here’s the good news:  the problem is fixable.   But it does require work.

For one thing, you need to think hard about what your value proposition really is.  Who should buy your solution and why?

Hint:  it is not just a list of features, no matter how long or technologically sophisticated.  

The value proposition needs to clearly specify:

  • The target market:  The target audience should know “Is this solution designed for me?”
  • The key features and benefits.  “Does this solve my problem?  Why would I spend money on it?”
  • The advantages over alternatives.  “Why should I buy this solution from you?”

Write it down!

But once you’ve thought through a compelling value proposition, you’re not finished yet.  There’s an important second step:  Write it down.

You should prepare a written document.  When I work with clients, I call it a “Value Proposition and Messages” document.  Sometimes they call it a “Messaging Bible.”  It comprehensively addresses all the key issues:  target market, key features, benefits, and advantages.  And it’s all in a single place.  

Depending on your market and solution, the full “Value Proposition and Messages” document could run more than a dozen pages.  However, it should also include a one-page “boilerplate” description and a concise one paragraph version that can be added on to press releases or email signature lines.

Required reading

Before anyone prepares any marketing material – website copy, white papers, videos, whatever – they should first consult this document.  That way, they’ll know exactly what messages they are expected to convey.  They won’t be making it up as they go along.  

Of course, the value proposition can be adjusted over time as conditions in the market change.  But it’s not something you want to be constantly tinkering with.  Get the messages right, and then use them over and over and over.  Consistency is a good thing.  

Working from a single written document makes it easier to be consistent from one marketing deliverable to another.  Everyone is working from the same script.  The website, videos, and webinars, all sound like they’re from the same company, promoting the same solution.  Wherever and whenever a prospective customer sees you, they get the same message every time.


Nothing simple about SaaS benchmark metrics

There are lots of simple questions about SaaS that don’t have simple answers.  Here are a few I hear all the time:

  • How much should I spend on sales and marketing to acquire customers?
  • How many leads do I need to attract?
  • What’s the right leads-to-paying customer yield?
  • What’s an acceptable level of attrition?

There are certainly plenty of surveys and published benchmarks on SaaS metrics that try to provide guidance.  Just do a Google search on “SaaS conversion funnel.”  

And some of the rules-of-thumb you’ll find can be helpful.  For example, it’s tough to make the SaaS business model work when attrition exceeds 10 percent.

Use caution with rules of thumb

But you should be careful not to take these SaaS benchmarks as gospel.  Just because they apply to some SaaS businesses doesn’t necessarily mean they apply to yours. 

Though some survey may show, for example, that 50 percent of leads should convert into paying customers, it’s easy to imagine a scenario where a business could succeed with only a 20 percent conversion, or at the other extreme, a scenario that requires an 80 percent conversion.  

Focus on CAC/LTV and payback period

Ultimately all that matters is this:  Can you earn back more than you spend to acquire a customer, and how long does it take to do that?  

It’s all about the average customer acquisition cost (CAC)/long term value (LTV) ratio and the payback period.  (I’ve written about this in “Acquiring customers ain’t cheap” and elsewhere.  David Skok and others have also written about the topic at length.)

Realistically, a successful SaaS business cannot afford a CAC/LTV ratio that’s greater than 1.  You cannot invest $1 in sales and marketing expenses and get 75 cents in return.  If you put one dollar in and three dollars come out, that’s good.  One dollar in and ten dollars out is even better.  In any case, the LTV must exceed the CAC, eventually.  

The payback period tells you more precisely how long “eventually” is.  The longer the payback period, the deeper your pockets need to be to sustain the business.  SaaS companies that can recover their customer acquisition costs in less than one year, for example, need less capital than those that require three years.

No single “right” answer

Working within those guidelines however, there are plenty of ways for a SaaS business to succeed.  A company with a high subscription price and long subscriptions can afford a high customer acquisition cost.  It could succeed despite low conversion rates and high attrition.  For them, a lead-to-paying customer yield of 10 percent and attrition of 20 percent, for example, may be sustainable.  Obviously, there’s an opportunity to operate more efficiency, but a high LTV can cover a lot of sins.

At the other end of the spectrum, a company with lower subscription prices and shorter subscription terms needs to be much more efficient with its customer acquisition spending.   To succeed, it may need to hit a lead-to-paying customer yield of 40 percent and attrition below 5 percent.  For them, operating at optimum efficiency is critical for survival.

By the way, if your company finds itself at either of these extremes – or somewhere in the middle – give me a call.  I may be able to help you get more from your investment in sales and marketing.

I wish there were simple answers to some of the basic questions… but there really aren’t.  There’s no “right” level of spending to acquire customers, no “right” leads-to-paying customer yield, and no “right” level of attrition.  It all depends on your particular business and your particular market.


Content: More isn’t always better

When it comes to content marketing, more isn’t necessarily better.  If one blog post per month is good, it doesn’t always follow that two posts will be really good.  In fact, it might be worse.

Don’t get me wrong, I’ve seen content marketing work.  It can be especially effective for software-as-a-service (SaaS) companies that need to keep customer acquisition costs under control. 

If you provide good content – blog posts, newsletters, white papers, webinars, infographics, etc. – prospective customers are more likely to find you.  And that’s usually a lot less expensive than you trying to find them.

Quality vs. quantity

But effective content marketing work doesn’t mean pushing out a deluge of content.  

For one thing, producing good content isn’t easy.  I mean “good” in the sense of “useful to the intended reader.”  You want them to find value in the material.  Prospective customers should be impressed with your expertise, not your word count.    

Some folks can crank out useful content day in and day out, but unless you’re Dear Abby, it might be better to give yourself more time to pull together your thoughts before publishing.

Over-burdening your audience

Also think about content from your readers’ perspective.  Even if you do have the skill and bandwidth to crank out lots of content, do they have the bandwidth to read it?  

Remember, in the SaaS world, the person you’re targeting is usually a very busy person.  Besides evaluating solutions for their business, they have another full time job.  While they’re thinking about HR software, they’re also running the HR department.  While they’re considering marketing automation software, they’re running marketing campaigns.  Or while they’re evaluating, financial management solutions, they running Finance.  It’s not like they have all day to read, watch or listen to everything you push out during the course of a day or a week.  

A few thoughtful pieces are far more valuable to your prospective customers than a non-stop barrage.  There is big difference between helpful content and spam.


Looking for customers in all the wrong places

When asked why he robbed banks, Willie Sutton explained “because that’s where the money is.”

Not that marketers are bank robbers, but the same idea applies to finding prospective customers.  If you want to get their attention, you need to go where they are.

If you’re at the wrong place, it’s unlikely prospects will see you.

This idea certainly sounds logical.  In fact, it may sound blatantly obvious.

So why do so many companies ignore it?  Why do they spend time and money on marketing activity that doesn’t get them in front of prospects?  

It’s not that they have money to burn, especially if they’re software-as-a-service (SaaS) companies.  For these companies, spending too much on customer acquisition costs is a ticket to failure.

Infatuation with shiny new objects

One reason I’ve seen companies spend money to be in the wrong place at the wrong time:  an infatuation with novelty.  They’re mesmerized by new marketing tactics and channels.  

Right now, most of the new and novel techniques are intended to generate visibility online.  Companies are spending a ton of money, for example, on search engine marketing and social media marketing.  I’ve seen companies posting multiple blogs post per week, regularly updating their Facebook pages, pushing out a steady stream of tweets, and doing lots of whatever you’re supposed to do with Pinterest.

I won’t dismiss these things out of hand, and neither should you.  But if your customers aren’t paying attention to these social media channels, most of your work there is wasted. 

If a prospective customer is looking for a SaaS solution that’s critical to their enterprise, something they’ll be spending thousands of dollars on, are they really going to be looking for it on Facebook?

There are some products and markets where a social media campaign is a perfect way to get in front of prospects.  But they’re not always a good fit for enterprise SaaS solutions.     

And by the way, while marketers are fixated on new tactics, they’re probably overlooking some tactics that may be old, but may be much more effective for them.  I’ve worked with clients that have found that participation in well-selected trade shows or USPS mailings- yes, snail mail – can attract lots of qualified opportunities.

Don’t know where the prospects are

Here’s another reason companies look for prospects in all the wrong places:  They just don’t know the right places.

Marketers can make all kinds of guesses about their prospects’ thought processes.  And some of these guesses are fairly sophisticated and involve deep demographic and behavioral analysis and the development of detailed “buyer personas.”

But sometimes all this analysis doesn’t give much guidance on precisely where you might find these prospects.  When they’re considering a new solution, where do they go, what do they look at, and who do they talk to?

When I work with clients to build an effective customer acquisition program, I often talk with prospects and I simply ask these questions. 

Sometimes they’ll talk about searching online, but often they’ll mention a particular trade show or publication.  And sometimes I hear of totally unexpected sources.  I’ve worked with a client whose customers have found them through state-mandated licensing classes.  Another client found that one particular independent newsletter writer was virtually required reading for people in their market.

Once we figure out where these prospects go when they’re looking for a solution, it’s a lot easier – and less expensive – to get in front of them. 

Why Drive-by Marketing Doesn’t Work

So you’ve just shipped your new software-as-a-service (SaaS) solution, and for sure you’re eager to tell the world:  get out a press announcement, roll-out a search engine marketing campaign, sign-up for industry events, and whatever else you can think of.

Here’s some advice:  Slow down.

As tough as it is to resist the urge to do something, hold off a bit before going full blast with all this marketing activity.

And if you’ve already started, hang on and take a deep breath.  You may have already found that all this activity isn’t delivering the results you were expecting.  The hodgepodge of tactics and the drive-by approach is taking up lots of time and costing money, but at the end it’s not generating much business.

When SaaS companies find themselves in this bad spot, there’s usually two culprits to blame:  

  1. A poor message
  2. No plan.

The prospect doesn’t really care how your solution works

I’m sure you can do a great job explaining how your SaaS solution works and what each of its functions do.

But the prospective customer has other issues on their mind, such as:

  • Who is this for?
  • What problem does it solve for me?
  • Why is it better than alternatives?

It doesn’t really matter how well you execute on a search engine marketing plan, direct mail, or other tactics.  Without a well-thought-through value proposition and messages that answer these questions, the prospective customers won’t respond.  They really don’t care.

Activity without a plan doesn’t move you forward

Just because you’re scrambling to execute on all kinds of marketing activities doesn’t mean you’re making any meaningful progress in the right direction. 

Effective customer acquisition requires a well-structured plan.  It needs to walk through each step of the evaluation and purchase process:

  • Build visibility and generate leads
  • Convert leads into qualified prospects
  • Close prospects into paying customers
  • On-board customers
  • Retain and upsell

Drive-by marketing is unlikely to get prospects through this entire process.  Instead you’re likely to be stymied by bottlenecks and gaps.  Perhaps you’ll generate a huge volume of leads, but find yourself with no mechanism to convert them to prospects, or you’ll close a steady inflow of new customers, but have no way to make them successful and retain them.

You can experiment with a whole range of marketing tactics.  There are no hard and fast rules about what might work for your particular audience.  But without a compelling value proposition and a well-structured customer acquisition plan, you may be just wasting time and money.

Competing in a crowded market

First a confession.  Every once in awhile I get a call from a SaaS company looking for help with their value proposition or customer acquisition plan, and my first thought is “Are you kidding?!” 

The company tells me that they’ve developed a wonderful solution with a boatload of impressive features.  But… they’re selling into a market that’s already crowded with other vendors. 

Just what the world needs – another HR or CRM or email marketing or <fill in the blank> solution.

Finding an unmet need, a hole waiting to be filled

But on second thought, I think maybe it’s not so bleak after all.  Maybe we can make the case that the world does, in fact, need another solution.  

The challenge is to figure out a way to present this new solution as something different and better than the other choices that are already out there.  We need to determine if there’s an important unmet need in the market that this new solution can fill.

Sometimes being late is an advantage

By the way, sometimes there’s an advantage to being a late-comer to the market.  

The early entrants have already done much of the missionary work educating the market.  Customers are already familiar with the category.

Having had more experience with other solutions, the customers may better understand their needs and preferences. It’s easier to determine what’s really important to them

A late-comer can also learn from the experience of the established vendors and avoid their mistakes.

Tough to differentiate on features or price

Sometimes, companies’ first inclination is to try to differentiate themselves on features.  “Our solution has this function and the others don’t.”  

Unfortunately that’s hard to pull off.  For one, getting prospects to carefully evaluate all their choices feature-by-feature can be tough. 

Besides, since SaaS companies can develop and deliver new functions fairly quickly, it’s hard to sustain this advantage for very long.

Others will consider positioning themselves as the “lowest price” solution.  There are ways to make this approach work, but it can present challenges, especially when competing against larger, more established vendors that have deeper pockets and can match the low prices.

Lots of options to look different and better

But there’s no reason for SaaS companies to limit their differentiation options to just features or pricing.  

They could, for example, decide to position themselves as the vendor providing the best support or expert guidance.  

Or they could highlight the fact that they specialize in a specific industry or market, and they better understand the needs of those particular users.  

Or they might consider making a virtue of their smaller size and claim that they are more attentive to each user.

Or… whatever other benefit that might be valuable to the prospective customer.  (Contact me if you need help figuring that out.)

If you’re competing in a crowded market, trying to stand out from the rest isn’t easy… but it’s usually not impossible.


Why your prospects are ignoring you

Trying to connect with someone while they’re scanning their Twitter feed, replying to texts, and staring at a full inbox, while desperately trying to meet deadlines for whatever deliverables are on their long to-do list isn’t easy.  But if you’re the poor marketing person trying to reach prospective customers, that’s exactly what you’re up against.   

And that’s especially true if you’re marketing a software-as-a-service (SaaS) solution.  That’s because the person evaluating the solution is often the same person that will be using the solution.  

The evaluator is the buyer

If you sell an HR solution, you’re trying to reach the HR manager.  If you sell a sales automation solution, your audience is the sales executive.  If it’s a marketing automation solution, it’s the marketing professional.

When that’s the situation you face, here’s the challenge:  All of these folks are busy.  They all have a full time job.  As much as you’d like to think otherwise, these folks have other things to do besides evaluating your solution.  

Gone are the days when an expert from IT may have taken the lead in finding and evaluating software solutions.  It’s a lot different for most SaaS solutions; no one has that dedicated assignment.

If you’re the marketing person, what that means is that you need to work extra hard to grab a slice of your prospective customer’s attention. 

Here are a few idea to help:

Easy to grasp message: Whatever it is that your solution does, you need to articulate the value clearly and concisely.  If you force the prospect to work too hard to figure out how you can help them, they simply won’t bother.   

Create urgency.  The prospective buyer needs to feel a sense of urgency about the problem that your solution addresses.  They need to know that every month, every week, every day that they put off solving the problem, their business suffers… badly.  Evaluating and purchasing a solution is not something they can afford to put off for long.

Talk business benefits, not technology:  Remember that your SaaS buyer typically is in sales, marketing, finance, HR, or some other non-IT role.  They care about solving business problems: closing more business, optimizing marketing programs, improving cash flow, filling open positions, or whatever it is in their job description.  

When you talk to them about your solution, you need to talk to them about business benefits, not just features and functions.  They care more about what your solution does and how it can help their business;  they don’t care so much about how it works.  

Be consistent:  To get through to these busy buyers, repetition works.  They usually need to hear your message over and over before it has an impact. 

If you’ve crafted an effective value proposition – something that is easy to grasp, creates a sense of urgency, and addresses business benefits – tell the same story everywhere.  The prospective customer should see it on your website, at events, in sales presentations, on webinars, in papers, and anywhere else you’re promoting your solution. 

Resist the urge to constantly tweak the message.  You may be sick of hearing yourself say the same words every time, but that’s what it takes to get through to your prospective customer.

Bad leads cost you money; they don’t make you money

I know this is hard to believe, but sales people occasionally complain about marketing.  And they usually moan about two things in particular:

  • Not enough leads
  • Poor quality leads

I’ve seen this a lot, so I can tell you how lots of marketing people react.   They focus on fixing the first item – generate more leads –  but pretty much ignore the second – improve the quality.

Why?  Usually because it’s just easier and faster to crank up the lead volume:  spend more on pay-per-click, add a couple more events to the calendar, or push out more direct mail.   Voila!  More leads.

At some companies, in fact, the marketing team’s compensation scheme may be tilted to encourage this.  They pick up a bonus for hitting some target number of leads.

A “suspect” is not a “lead”

Of course, if you’ve been through this kind of thing before, it’s easy to see the fly in the ointment here.

The fact is that lots of these “leads” are not really “leads” at all.  Many are really just “suspects” or “contacts.”  They’re names of people that may be interested in buying at some point in the future… but not yet.  You know very little about them and they’re not at all ready for a direct conversation with a sales person.

So what happens when we pass these “suspects” along to a sales person who then tries to get in touch with them?  Usually two bad things:

For one, the prospects are bothered and annoyed.  They don’t pick up the phone, reply to an email, or give a call back.  Why would they?  I know when I get a phone call that starts with “I see you were just on our pricing page,” that’s doesn’t make me feel warm and fuzzy.

Yes, I know there’s all kinds of research that says you need to connect with a prospect within 5 minutes of their inquiry, and that may work when it’s an inquiry from a qualified prospect.  But does downloading a white paper or signing up for a webinar really count as an inquiry from a qualified prospect?

How to waste an expensive resource      

Here’s the other bad thing that happens when you chase down these unqualified prospects: you end up squandering one of your most valuable and expensive resources – sales people.

According to a survey conducted by Pacific Crest Securities, in software-as-a-service (SaaS) companies that sell through field or inside sales teams, sales expenses account for the largest portion of customer acquisition costs (CAC). 


CAC Composition: Sales vs. Marketing Cost % of CAC

Source:  2015 Pacific Crest Private SaaS Company Survey, October 16, 2022

“> Source:  2015 Pacific Crest Private SaaS Company Survey, October 16, 2022

Source:  2015 Pacific Crest Private SaaS Company Survey, October 16, 2022


For SaaS companies that need to keep customer acquisition costs under control – and by the way that basically means all SaaS companies – wasting sales resources is not a ticket to success.

Tossing “suspects” or “contacts” from the marketing team over to the sales team just causes more problems.  Where sales people were once complaining about sitting on their hands, without enough prospects to call, now they’re complaining about wasting time trying to chase down people who aren’t ready to talk to them. 

Cultivate “suspects” into “leads”

Many of these “suspects” need more time to educate themselves.  They’re still at the beginning of their evaluation process and need to better understand the options available to them.  That takes time.  Remember, these are busy folks and often get interrupted by other priorities.

Using sales professionals to chase these suspects is too expensive.  Instead, SaaS companies should be cultivating them, nurturing them until they are ready. 

So what’s this “cultivation” all about?  It’s really just a cost-effective way to stay on a prospect’s radar screen.  When the prospect does focus again on whatever the problem is that you solve, they’ll have you and your solution at the top of their mind.

White papers, newsletters, webinars can all be effective cultivation tools.  (You should see what works best for your particular prospects.)  

The key is to find some way of staying in touch that’s relatively inexpensive, educates the prospect, and most importantly doesn’t require an expensive sales person. 

And whatever method you use, it should provide an easy way for the prospect to signal that they’re ready for the next step… a way for them to raise their hand and indicate that they are now ready for a direct conversation. (Contact me if you need help with this.)

I doubt I have the key to everlasting peace, harmony, and love between sales and marketing.  But if you’re in marketing and you hear complaints from the sales folks about leads, here’s an idea: 

Think first about the quality of leads, before you think about the quantity… not the other way around. 

Simply tossing more suspects or contacts into the pipeline, without a way to cultivate and qualify them, wastes time and resources.  And it won’t make you any more popular with sales.

Your toughest competitor… inertia

It’s possible that the competition for your technologically sophisticated, software-as-a service (SaaS) solution is some other vendor’s technologically sophisticated SaaS solution.  

Some markets are jam-packed with vendors peddling SaaS solutions, all scratching each others’ eyes out to win deals. 

But while your battling tooth and nail with other SaaS vendors, don’t forget about the other competitor in the picture:  inertia.

In many cases, in fact, inertia may be your toughest competitor.

A high tolerance for “good enough”

Your target customer has probably been stumbling along for quite awhile, somehow managing to get by with a mediocre solution.  Depending on the department and the function, it probably consists of some combination of a spreadsheet, email, Word docs, and paper forms.  Sometimes Quickbooks or sticky notes are in the mix, too.

Of course, you know that that home-grown solution is less than optimal.  It’s awkward to use, prone to error, and inefficient. 

In fact, the prospect probably knows that too.  They’re quite aware that the system they’re using now is really just barely good enough.  

But most companies have a high tolerance for “good enough.”

Only urgent problems get attention

Folks at the companies you’re trying to sell to are busy, they have lots of other priorities, and they can only focus on things that need urgent attention.  If the problem you solve is way down on their list of priorities, you and your solution aren’t likely to get attention any time soon.  So the prospect customer puts off any decision to evaluate alternatives, replace the current system, and purchase something new.

It’s not that they’re buying a solution from some other vendor.  They’re simply not buying anything at all.

Delays really hurt SaaS companies

Delays like this are a particularly acute problem for SaaS companies.  

SaaS companies have incurred lots of costs up-front to get a prospective customer’s attention.  Adwords, events, inside sales, or whatever other tactics you use to attract prospects cost money.  To recover that investment in sales and marketing, companies need to convert those prospects into paying customers.  That’s how the SaaS model works.

When the prospects have no sense of urgency, no immediate need to buy, the sales cycle gets longer, and the SaaS companies collect no revenue.  That’s a problem.

And the longer the sales cycle runs, the longer the delay before there’s a purchase, and the bigger the problem.

Companies need much deeper pockets to fund a six-month sales cycle vs. a six-day sales cycle.

Subscription deferred is actually revenue lost

But wait, it’s actually worse than that.  Under a subscription model, revenue that’s deferred is actually revenue that’s lost.  

In the traditional license model, if a deal gets pushed out from January to April, the license fee is still received in full, albeit one quarter later.

But in the SaaS subscription model, if a purchase decision moves from January to April, that’s three month’s worth of subscription revenue that’s lost.  When those three months have passed, they’re passed.  It’s not possible to recover the subscription revenue for that quarter.     

What’s a marketer to do?

It’s not enough to trot our your impressive roster of features, benefits, and advantages. 

The first task is convince the prospect that they have a problem and that their existing system is not, in fact, good enough.  They need to see that every month, every week, every day that they ignore it, and try to get by with their existing solution, is badly hurting their business.

You need to point out, for example, that:

  • Their paper-based recruiting system is losing them great candidates and costing them hours per week. 
  • Their accounting solution is losing track of thousands of dollars and exposing them to liability.
  • Their customer support solution built with email and Word is infuriating customers.
  • Their inventory management system cobbled together with Excel and paper documentation is costing them lots of money in overstocks and shortages.

 Until they see that they have a problem – an urgent problem – they don’t care about your solution.