In 1923, Australian archaeologist, philologist and European prehistory specialist, Gordon Childe, coined the term Neolithic Revolution, which described the wide-scale change of many human cultures from hunting-gathering to farming.

People realized that agriculture was much more productive than hunting and gathering, and gradually changed their lifestyles.

With the proliferation of the Internet and web-based marketing practices, the world of commerce is going through a similar change.

More and more SaaS firm leaders realize that pre-Internet client-acquisition practices don’t work any longer, and they have to bring their marketing into the 21st century too.

But not only marketing practices have changed over the year, but buying practices too.

Buyer confidence has reached an all-time low and skepticism and cynicism an all-time high. Just read three key findings of what the Yankelovich Partners’ study has to report about marketing practices…

  • 53% of consumers say marketing doesn’t help them to become smarter shoppers.
  • 69% of consumers are looking for solutions to block marketing messages out of their lives.
  • 33% of consumers say they are willing to endure lower standard of living in a marketing-free society.

Buyers are crying out demanding change in marketing.

They know that with the Internet, they are less dependent on salespeople than ever. You can buy even your car without talking to a salesperson. In a few years, you can buy a house without talking to a real estate agent.

With this in mind, it’s pretty easy to imagine that SaaS buyers do their best to avoid personal interaction with salespeople.

But the dilemma is that if you want to stay in business, you have to sell. The function is here to stay but the approach has changed rather dramatically.

One thing is sure, SaaS marketers can no longer bombard their prospects with aggressive and idiotic sales pitches.

This is why in this article, we dive deep into some key points of inbound marketing, and see how SaaS companies can adjust their marketing approaches to specific buyer actions.

But before we go deeper into crafting a strategy, we have to ask a key question…

What Is Strategy Anyhow?

The word strategy originates from the Greek military word στρατηγία a.k.a. stratēgia, and it means the art of the military leader”, “the art of the general”. It deals with the planning of movements of armies on the battlefield before the battle.

It starts out as a divergent process and then pivots and becomes convergent, focusing on the best approaches.

For instance, on a dull mac-and-brolly day, you’re outside getting wetter than an otter in the washing machine, and, quite understandably, you want to stop being rained on. That’s your objective.

The divergent part of strategy is to figure out what possible options you have to stop being rained on. Options can range from a cardboard box through an umbrella to a raincoat.

Then the convergent part is to select the best option.

Then whatever option you choose, you can start developing the appropriate steps to execute your selected strategy.

In On War, Carl von Clausewitz wrote, “Subordinating the political point of view to the military would be absurd, for it is policy that has created war…Policy is the guiding intelligence, and war only the instrument, not vice-versa.”

This translates into business in a SaaS firm roughly,

“Subordinating the business point of view to technology would be absurd, for it is business policy that has created the required technology…Business is the guiding intelligence, and technology only the instrument, not vice-versa.”

Paraphrasing Michael Gerber in E-Myth…

“Just because you know how to write software doesn’t mean you know how to run a business that profitably sells software.”

Do yourself a favour and read Clausewitz’s On War, Sun Tzu’s The Art of War and Michael Porter’s Competitive Strategy (This book was voted the 9th most influential management book of the 20th century in a poll of the Fellows of the Academy of Management).

Strategy has three major components

  1. The diagnosis defines or explains the nature of the challenge: E.g.: “We need more clients for our SaaS services.”
  2. The guidelines define the boundaries within which the problem must be solved: E.g.: “We never waste our time on responding to RFPs.”
  3. Required high level actions: E.g.: 1) Tighten up target market and perfect client profile; 2) Beef up lead generation; 3) Beef up lead conversion.

And now, with the breakneck speed of a somnolent sloth, we can…

Identify Expensive Problems

First, identify the expensive problems your software solves.

I know many strategy documents recommend that first you identify your target market, but there is a problem.

If I sell running shoes, the expensive problem I solve is that my shoes better protect runners against shin splints, ankle injuries or even the dreaded green lurgy than pedestrian, garden-variety running shoes.

But if I don’t clarify the problem first, I may pick quadriplegics as my target market.

Considering their situation, my shoes wouldn’t make a dickybird of difference to them.

For instance, CRM helps salespeople to better communicate with each other and their prospects. But if you consider that…

  • Salespeople spend on average only 11% of their time actively selling to customers. (Proudfoot Productivity Report, 2006)

…then you can justify the price of your software by the dollar value of the improvement in salespeople’s performance.

But if the expensive problem you solve is that the sales force can better communicate, you can’t offer this CRM to businesses that don’t use field sales forces.

For salespeople at Wal-Mart or other retail stores, your CRM is as useless as a cat flap on the elephant house.

But the situation is different if you match the expensive problem to the target market.

While your competitors are busy defending their costs and prices, you can lead the charge with performance improvements and potential revenue increase.

That’s more powerful than defending your prices.

Now make a list of your target market’s problems that your software solves. Then next to every problem, on a finger scale (a scale of 1 (low) to 10 (high)), write down how expensive that problem is.

And remember, the value of a problem is highly contextual.

If I want to wash my car, a bottle of water doesn’t represent a big value to me.

But if I’m about to die of thirst in the middle of the Sahara Desert, then the same bottle of water has a dramatically different value. It means life to me.

Remember the two Carls…

Communist zealot and lifetime social bum (he never worked in his whole life), Karl Marx said, “The relative values of commodities are determined by the respective quantities or amounts of labour worked up, realized and fixed in them.”

But we know that he was a raving idiot. I used to live under the regime which he and his mass murderer pal, Vlad Lenin (not to be confused with Vlad the Impaler, another sweetheart of a dude), created, so you can cut me a little slack for the harsh words.

It still puzzles me why the western world regards Marx as one of the greatest economists the world has ever seen. Maybe because the western world is full of Marxist intellectualises who’ve never actually experienced Marxism besides reading about it in academic text books and teaching it in Ivy League universities.

Carl Menger, the founder of Austrian Economics, said, “Value is judgement economizing men make about the importance of the goods at their disposal for the maintenance of their lives and well-being. Hence, value does not exist outside the conscience of men.”

Once you have the extensive problems, you can start pairing them with specific features that your SaaS offers.

And then you can…

Identify Your Target Market

Let’s start with how the market perceives you. Your firm can fall into one of four categories.

 

We know from positioning that the narrower your market focus is, the more intense and effective your value proposition can be and the higher chance you have to plop yourself into the “business improvement experts” quadrant.

Let’s look at CRM, for instance.

Think of the top 10 CRM software.

Now think of the top 10 dental CRM software. None of them is on the general CRM top 10 list.

The same goes for car mechanic shops, coffin carvers, personal training studios or funeral homes.

Each business model has its own idiosyncrasy, so each requires very special features in its CRM.

This is why they use specialist software and are willing to pay more for them than general CRM costs.

iOS developers emphasize that they’re iOS developers, not general developers.

There are three key areas to consider along three paths…

 

 

 

 

 

 

 

 

Perfect Buyer

Perfect buyer is the character of the person with whom you interact throughout the project. Yes, you sell SaaS, but you still have to interact with someone in the company.

[1] Technology adoption life cycle.
[2] Leading edge products do their work effectively at a certain cost. Cutting edge products to their work a bit more effectively but a significantly higher cost. The Aston Martin DBS does 0 to 60 mph in 4 seconds for $225,000. The Bugatti Veyron does it in 2.5 seconds, but for 1.7 million. A 60% performance improvement at a 650% higher cost. The Aston is leading edge. The Bugatti is cutting edge. Leading edge solutions can do 70-90% of what cutting edge solutions can do, but cost only 25-50% of what cutting edge solutions cost.
[3] Business indicators that executives track by in the boardroom, as opposed to technical indicators which techies track in the server room.

Now you know what problem you solve and to whom, so can build a road and a vehicle to take your solution to your target market.

To build a road, you have to know where the road starts and where it goes.

So, you have to know where your target market lives.

It’s like fishing really. You know what you want to catch and you select the bait and the location accordingly.

If you want to catch pike you go to the local river and bait your hook with a hunk of pig’s liver.

But if you fish in sea, pig’s liver gets you some sharks.

So, we have two ingredients to the fishing equation:

  1. The location where to fish.
  2. The bait to use to attract the right fish.

And we select both the location and the bait according to what we want to catch. That is, we create a “Perfect Fish Profile”.

Let’s Find the Location

The location helps you to build a passage, perhaps not necessarily to Bangkok, but to where your target market is.

As a SaaS provider, you may live 100% in the digital world, your target market may not.

Many industries are required to keep extensive hard copy documentation on their work. Yes, every business can benefit from a good CRM, but this is a vital point to consider.

So, what locations to look for?

Let’s start with…

  • Professional associations
  • Printed trade publications

You can kick me in the shins for bringing two very non-digital sources, but there is a method to my madness.

Do a few talks at professional associations and write a few articles in trade publication, and no amount of your competitions’ blog posts, tweets or other social media “likes” can catch up with you. Not even if your competitors are tortoises that can live beyond 150 years.

Yes, some say that people are far too busy to attend association meetings anymore and they read electronically.

Maybe.

All I’m saying is that you do a few talks at a professional association to 50-100 people each and they add more to your credibility and reputation than 100 years of daily blogging and tweeting combined.

Credit: Wikipedia

Why?

As Peter Steiner’s cartoon, first published in The New Yorker on 5 July 1993, says…

“On the Internet, nobody knows you’re a dog.”

But when you are accepted to talk at professional associations or to get published in printed trade publications, you can’t fool people. It’s real and you can’t hide behind a keyboard.

After that, you can discover opportunities to get on podcasts.

The reasons why these channels are so effective is because they allow your audience to get to experience you as a person, not just reading your thoughts on screen.

This human connection creates credibility.

Oh, and after a few talks, published articles and some guest podcast appearances, you have so much to write about on your social media channels that you can melt your keyboard writing it.

And then we arrive at…

Developing Your Sales Funnel

Danny Cox writes in Leadership When the Heat Is On (Mighty Manager), “Once you grab the tail of the tiger, you’d better know what to do next pretty quickly.”

So, now we have all we need to start generation high-calibre sales leads.

After 18 years of working with sixty odd software SMEs, the problem I see is that they offer demos too quickly. People accept the demos because they cost nothing, but a large percentage of them just let the demos lapse because they haven’t been properly prepared for them.

Also, my observation is that most SaaS companies want to collect contact information far too fast.

But if you try to prod buyers to move faster, you can scare them off. However, if you prod them to slow down just a tiny bit, they stay. Subconsciously they also conclude that you’re not desperate for their money and that going through the seller’s sales process is more important than grabbing buyers’ money ASAP.

I suggest my clients that they try the following sequence…

  1. An ungated article that relates one of the expensive problems of the target market. The call to action ask readers to watch a video.
  2. Ungated video on the website related to another expensive problem, related to the previous one. Call to action…
  3. Register for this white paper and workbook to self-diagnose the above expensive problem.
  4. Etc.

Make sure you ask people to give you their emails only once. I find it really irritating when I have to repeatedly register for content although I’m on the company’s email list.

After at least seven touch points, you can start gradually bringing in your CRM software. Don’t make the trill the call to action just hint it.

In your pieces, talk about certain features of the software as though the reader were already a user. Every time you refer to these features, you raise your reader’s interest.

And at the end of the trial, present your three options. Not four and not two, but three. There is a good psychological reason for that.

If you’re in for some hard-core brain cell gymnastics, you can read the psychological studies mentioned in the article too, but I think Jeremy’s explanation is more than sufficient.

To set up your lead nurturing process, you can also compare notes with this document.

And now, based on what you have developed, you can put together your content calendar. It walks you through how to put together an editorial calendar in Google Calendar.

So, let’s recap…

  1. Identify expensive problems related to your offer
  2. Identify your target market with that expensive problem
  3. Develop your perfect client profile
    1. Perfect buyer
    2. Perfect company
    3. Perfect project
  4. Find the location where perfect buyers congregate
  5. Build your sales funnel from first contact to signed contract

Yes, you’re right. I missed the buyer persona bit.

Buyer persona plays a role when you sell your services through consultative selling one by one.

But when you sell a subscription service, you can’t narrow it down to a description that fits one single person.

If your buyer person says your subscriber is a 32-year-old guy who loves operas, riding his Harley and cooking, how do you handle a woman who is in her 40s and an avid ultra-Marathon runner.

The only commonality is that they both are dentists.

This is why I’ve dropped the persona. It’s not relevant in the SaaS context.

To go full circle and complete your SaaS marketing strategy, see what Nelson Phillips has to say about the 7 Types of Content your B2B Company Needs to be Writing.

It will give you further guidelines about what to write for you sales funnel.