5 SaaS Marketing Myths

With 150,000+ people jamming into Dreamforce earlier this year, I think it’s fair to say that this “SaaS thing” is for real.  Customers are definitely getting smarter about how to use software-as-a-service (SaaS) solutions, and vendors are getting smarter about how to sell them.

But even so, a few persistent myths on how to market SaaS solutions still linger.  Some ideas probably once made sense, but no longer apply.  Others never really made sense… but they seem to stick around anyway.

1.  SaaS is a differentiator

This certainly falls into the category of “It made sense at one time.” 

But touting that you’re “SaaS” in 2015… well, it’s just not that big a deal anymore.  (See "Customers Don't Really Care About SaaS.")

Of course, you want to say you’re a SaaS solution somewhere in your description, but highlighting “web-based” or “runs in the cloud” is not really necessary in the headline anymore. 

For one thing, it’s better to talk about the benefits of SaaS, not "SaaS" by itself:  rapid deployment, regular updates, fewer IT resources, etc.  

Moreover, in many markets, most of of your competitors are also marketing SaaS solutions.  In fact, prospective customers often just assume that any modern application is running in the cloud.  So saying you're "SaaS" just doesn’t make you stand out.  

2.  Free trials are essential

I remember talking to a group of aspiring SaaS entrepreneurs a few years ago, all of whom described their marketing plan like this:  “We’ll put up a free trial on our website.”

That idea didn’t make a lot of sense then, and it doesn’t make a lot of sense now.

Of course, free trials do work for lots of SaaS applications.  Bur not for all of them.  

Sometimes a free trial just isn’t the best way for the prospect to really see the value in your solution.  Maybe they don’t have time to put in the data that’s required, or maybe they don’t want to risk trying out an application across their entire organization.  (See "Free Trials Don't Always Make Sense.")

And of course, even if prospects do take advantage of the free trial, you still need to do work to convert the trialer into a buyer.  That usually doesn't happen by itself, especially for B2B applications.

Instead of defaulting to free trials, SaaS companies should think about alternatives, such as a money-back guarantee, a no-obligation contract, or maybe a “sand-box” where prospects can play with the app.  Heck, sometimes a good old-fashioned demo, conducted by a skilled sales support engineer, is the best way to show off your solution.  

3.  You can do marketing on the cheap

It’s absolutely true that marketing SaaS solutions comes with its own set of daunting challenges.  Among them is the “Wimpy” challenge, named for the character from the Popeye cartoon, whose signature line was “I’ll gladly pay you on Tuesday for a hamburger today.” 

That’s a decent description of how the SaaS business model works.  You get paid in the future for the sales & marketing expenses you make today.  It’s not at all unusual to take 2 or 3 years to recover the customer acquisition costs.  Which explains why it’s especially important for SaaS companies to be careful with their sales and marketing expenses.  

But that doesn’t mean SaaS marketing can be done on the cheap.  

Inbound marketing or content marketing, which puts “bait” in front of prospective customers will usually be more cost-effective than indiscriminate cold-calling, but good content isn’t free.  Even if you can push it out via social media or email for little cost, preparing compelling content - blog posts, papers, videos, email newsletters, whatever - requires time and/or money.  (See "Good Content Marketing Requires Good Content.")

And then of course, once you attract the attention of a prospect with your content, you need to cultivate and close that opportunity.  You may need an inside sales team, a channel partner, or even face-to-face meetings.   Again, none of those tactics are cheap, especially for B2B solutions.

4.  One clever “hack” is all it takes

I’m not a big fan of the term “marketing hack.”  Or at least, I don’t buy the idea that clever gimmicks will somehow unlock the secret of acquiring and retaining customers. 

Sure, I can appreciate a smart marketing tactic as much as the next guy, but looking for one, or even a handful of these tactics to do the job just isn’t a sound approach.

Acquiring and retaining customers is a long-term process.  Companies need to build visibility, attract leads, cultivate opportunities, close them into leads, and then on-board, retain, and upsell them. There’s plenty of room for clever, creative, even ingenious tactics, but marketing SaaS solutions, especially to enterprises, is a multi-step process.   

It requires a well-structured, end-to-end plan, and a lot of work to carefully execute it.  There’s a lot more to it than a few clever “hacks.”

5.  “Old” marketing tactics don’t fit SaaS

There’s plenty that’s new about SaaS technology and the SaaS business model, but that doesn’t necessarily mean that the way people evaluate and purchase solutions is new, too.

In fact, prospective customers in some markets still use “old” ways to find out about solutions.  They go to trade shows, get an unsolicited direct mail piece, or ask a colleague.  Just because these tactics may be “old” and they were established long before SaaS - even long before software - doesn’t mean they won’t work for SaaS solutions.  (See "Old Tactics Can Still Work for SaaS Marketing.")

Maybe they’re not as leading edge as social media, search engine marketing, or viral marketing campaigns, but don’t automatically rule them out of your marketing mix.  If that’s how your customers evaluate and buy solutions, do it.  (One way to know how customers evaluate and buy solutions… just ask them.) 

And don’t be afraid to try a new, or an old, tactic. If it works, do more.  If it doesn’t, try something else.  

I'm Peter Cohen, Managing Partner of SaaS Marketing Strategy Advisors.   I help software-as-a-service (SaaS) companies acquire and retain customers.  If you're not getting the results you want from your marketing efforts, contact me.  I've been working with SaaS companies for more than 10 years, so there's a good chance I've seen the kinds of challenges you're facing and can offer some useful guidance and practical recommendations.  You can find out more about me at SaaS Marketing Strategy Advisors.