Five SaaS Paid Acquisition Ideas For 2020
Many bootstrapped SaaS founders are reluctant to invest in paid acquisition, believing it to be something that only the Unicorns can afford. This opinion was further reinforced in 2018 by a high profile tweet from Andrew Chen, general partner at Silicon Valley VC firm Andreessen Horowitz, claiming that many startups are dying from their addiction to paid marketing. While in certain cases this may be true it is also the case that many bootstrapped and angel backed startups are failing because they are not willing to experiment with paid acquisition at all. If that sounds familiar to you, here are some SaaS paid acquisition ideas for you to try in 2020.
What is paid acquisition anyway?
Put simply, paid acquisition channels are those which you have to pay for clicks, leads or other conversions. For a SaaS business the most commonly used paid channels are Google and Bing Search ads, Google display ads, YouTube ads and paid social ads on Facebook, Instagram, Messenger, LinkedIn, Twitter, Quora and Reddit. Also popular are paid directory listings on Capterra, Software Advice, GetApp and G2.
So whether you are bootstrapped or VC backed, startup or established company, here are five reasons for you to consider SaaS paid acquisition as part of your growth strategy in 2020.
Business Case #1: Idea Validation
It’s now been more than a decade since Tim Ferris published The Four Hour Work Week, the book that popularized the concept of setting up a dummy order page and running Google Search ads to gauge interest. Yet founders are still building SaaS products with little or no market validation (build it and they will come syndrome). Instead, start by thinking about what problem you are hoping to solve, and for whom? How would your prospects phrase their search for such a solution? A few hundred dollars spent on driving traffic to a landing page to capture their details and have a conversation could be money well spent to validate your idea before building it.
Business Case #2: Product/Market Fit Validation
How do you know if your SaaS product has product/market fit if no one yet knows about your product? Paid acquisition can be used to test landing pages that emphasis different messaging and features, and measure the effect on the number of free trial signups or demo requests from each page. Unbounce, LeadPages or Google Optimize can be used to give your tests statistical evidence and run A/B tests easily.
Business Case #3: Content and Keyword Validation
While paid acquisition can accelerate the growth of your SaaS product on its own, I would not recommend relying on a single channel or strategy for too long. Yes, paid is expensive but at least the results (good or bad) follow quickly. Imagine investing time and money in content marketing and SEO with no idea whether you are optimizing for the best converting search terms and topics. You don’t have to imagine it, as this is what most companies do! So it actually makes a lot of sense to run paid search ads for a while to work out what are likely to be the best performing keywords for your business. Once you know this, you can invest in content and SEO with confidence that you are not simply guessing what works or just following the competition.
Business Case #4: Growth Maximization
In an ideal world you will have a three or four marketing channels working well for you, driving traffic to your site. But what happens when they visit, leave and forget about you? This is when retargeting campaigns can help maximize the opportunities you have by showing relevant ads on the Google Display Network and across social media. Used wisely, retargeting can convert undecided visitors or at least get them to take the next action in your funnel. As you have already invested a lot of time and money to get visitors to your site, spending a few dollars more to seal the deal with retargeting is well worthwhile. And retargeting campaigns are almost always the lowest cost of acquisition of any type of paid campaign.
Business Case #5: Brand Defense
SaaS is more competitive than ever. For example, in MarTech alone there are now more than 7,000 SaaS products vying for the attention and budgets of marketers. So it’s understandable that companies will try and poach each others’ prospects and customers. One of the ways they do this is by bidding on your name in Google and Bing, and showing their ‘alternative’ ad for your product. Unless you are also bidding on your own product or company name it’s likely you are already losing clicks to your competitors. The good news is that a competitor will find it expensive to compete against you if you run your own brand ads, as Google Ads ‘quality score’ should already be working in your favour.
What you need to know before embarking on paid acquisition
If you want to use paid acquisition to grow your SaaS aggressively, you’ll need to have a good handle on your numbers, specifically deal velocity, CAC (cost of acquisition), LTV (lifetime value) and churn. Monitoring these KPIs as you begin and increase your investment in paid channels will be critical to understanding the effect on your business. Typically an angel or VC backed venture might spend the equivalent of the first year of revenue to acquire a customer. However, bootstrapped founders tend to be more conservative, spending the equivalent of 3 or 4 months of average revenue to acquire a customer.?
Attribution – how much is enough?
Attribution (knowing which customers came from which source) will help you to measure your return on investment and return on advertising spend. I only have one piece of advice regarding this: don’t expect it to be 100% accurate as this is still a fantasy. And due to growing privacy concerns, attribution is actually becoming harder to prove. Instead, try and discern the insights from the data you can collect instead of fretting about what you cannot record. As with many things in life, perfection is the enemy of good.
Don’t assume anything!
I hope this has given you some ideas for how you might use paid acquisition to grow your SaaS business. It’s very easy to make assumptions about a particular tactic or channel not being right for promoting your product but in my experience, you can no longer assume anything without testing and measuring it. Finally, just because you can’t get something to work it doesn’t mean it won’t work. Hire an expert to stand the best chance of succeeding. Dabbling in paid channel acquisition is like learning to play poker in Las Vegas – ultimately a brief and unrewarding experience!
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