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Working to acquire, qualify, and convert leads is a critical part of SaaS business success, whether you’re a startup or an established enterprise. Trying to balance multiple efforts for marketing, sales, and retention can be extremely challenging. It’s most helpful to organize your efforts using a well-constructed SaaS sales conversion funnel. When marketing a subscription business, you face even more challenges, like balancing retention and acquisition efforts, identifying new features that your customers are interested in, and working to maximize customer lifetime value.
Your SaaS funnel is a model that visualizes important stages along the customer journey. With data assigned to each stage and the right tools in place, your SaaS conversion funnel can be measured, tracked and optimized.
To make the most of the data in your SaaS funnel, start with a 14-day free trial of Baremetrics.
What is a SaaS conversion funnel?
In sales and marketing, the “funnel” refers to the process of qualifying leads and converting them to customers. You pour in leads at the widest part at the top of the sales funnel. As you work on converting them through the sales process, the funnel narrows. The bottom of the funnel is where your hottest qualified leads pour into your business as customers.
The traditional sales funnel is broken down into a few stages as leads engage with your brand:
- Awareness: This is where your prospects become aware of your product and your brand. They’re just learning who you are, what you do, and that they have a problem you can solve.
- Discovery: This is the phase where prospective leads are doing some initial research, narrowing down the products and services that can help them solve their issue.
- Evaluation: In this phase, prospects are conducting more serious evaluations, weighing the pros and cons of making a purchase, as well as comparing you to your competitors.
- Intent: This is the final phase of the funnel before a purchase is made. Logic, numbers, and value-driven communication are the keys to making that final persuasive push.
- Purchase: This is where leads have ultimately decided that your brand meets their needs. They then join the ranks of your paying customers! Your work isn’t done, though: You still need to help them through the welcome and onboarding phase.
For your SaaS business, you have one key additional stages you need to consider: retention. Unlike other retail businesses, you don’t just want your customers to make a one-time purchase. You have to continue persuading them of your continued value each month. In this phase, you can also use the insights you gather in Baremetrics about the customer and their behavior to upsell with features that meet their specific needs (and, in turn, increase your average revenue per user).
The retention phase is absolutely critical for SaaS companies, as your main focus should always be maintaining and improving your monthly recurring revenue (MRR) and reducing customer churn. As a SaaS business, you should dedicate a portion of your marketing dollars and sales efforts specifically to customer retention and loyalty efforts to make your new paying customers loyal brand advocates.
How to Track your SaaS Funnel
Tracking your SaaS funnel starts by understanding the different lead stages in your specific SaaS business. Understanding what actions trigger customers to take the next step in the sales process will let you assign value to those actions.
Start by adding monitoring and analytics tools to your website so you can see where users are spending time and which content helps drive conversions. Within a tool like Google Analytics, you can set up goals and conversion actions on your site. Whenever a user completes one of those actions, such as a button click or a form fill, you’ll be able to see that within the dashboard, and understand the percentage of users taking that desired action—this is your conversion rate for that stage of the SaaS funnel.
Next, you need to assign a value to your conversion actions. Based on insights from your data, your sales and marketing teams will be able to understand which actions lead to the most purchases and concentrate their efforts accordingly. This information can then be used to assign a dollar value to each lead’s action, giving you a clearer picture of the true value of each stage of the funnel.
Finally, make sure you also always have a clear picture of the value of your existing customers, letting you closely monitor the ever-important retention stage of the funnel. Metrics such as average subscription length and customer lifetime value are most helpful here, and they’ll help you determine not only your sales goals but also help with pricing optimization. Baremetrics tracks customer actions through people insights, and then helps divide customers into segments that help you understand what customers need in the retention stage on the funnel.
With these values in hand, you can calculate important value metrics such as customer acquisition cost (CAC), churn rate, customer lifetime value (LTV), and average revenue per customer (ARPC), which all give you the clearest picture of your SaaS business funnel.
Baremetrics integrates seamlessly into your SaaS conversion tracking process and does the work of calculating key metrics for you. Start tracking your SaaS conversion funnel with a 14-day free trial of Baremetrics.
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How to Optimize Your SaaS Funnel
To optimize your SaaS funnel, you need to look at the data you’ve gathered about conversions and customer needs. Understand which points are most successful, where customers are dropping off, and adjust your marketing and sales efforts accordingly.
You might build a content marketing strategy centered on a key conversion tool, like a free trial, that connects leads from social media, email marketing, and SEO campaigns back to your top-converting articles and landing pages.
Carefully consider the content that help users understand your product at each stage of your sales cycle, especially in the stages with the highest conversion rates. You can then adjust your marketing strategy accordingly. Include strong CTAs at every conversion stage with trackable links, so you can automate tracking those conversions with SaaS conversion tools in Google Analytics and your payment processing system, which then can easily integrate with Baremetrics.
How Baremetrics Can Help
Manually calculating and tracking your key metrics along your SaaS funnel can be time consuming and doesn’t always offer the most current information. Using Baremetrics lets you easily visualize all the key metrics in your SaaS funnel, both holistically across your full customer base and on an individual basis. All transactions are automatically added, and KPIs are updated live. This powerful automation also includes forecasting tools, which let your marketers and sales team understand what they need to do to meet their goals.
Ready to see how you can optimize your SaaS funnel with the most current data? A 14-day free trial of Baremetrics will set you on a path to conversion funnel success.