The Software-as-a-Service (SaaS) sector has undergone rapid evolution, emerging as a pivotal force in the global business arena.
By leveraging its agile, subscription-based model, SaaS empowers enterprises to seamlessly access and utilize software applications via the Internet, obviating the complexities of traditional infrastructures and on-premises installations. This cost-efficient, scalable, and adaptable paradigm shift has catalyzed a proliferation of SaaS entities worldwide, catering to diverse industries and addressing myriad business requisites.
In this post, I’ll dissect prevalent missteps that plague SaaS ventures, elucidating why they falter. For those ensnared by these pitfalls, redemption awaits through strategic course correction.
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Mistake 1: Lack of market research
The first big mistake I see is lack of market research. Too many SaaS founders just go ahead and start building the product and building all these features that they think is perfect, but they haven’t even asked their target audience what they actually want. This is destined to fail. If you do not do this, you’re in danger of having a product that nobody actually wants. So you’ve wasted hundreds or tens of thousands of dollars on building this thing that’s completely worthless. Here are some ways that you can do market research to avoid these issues.
Tip 1: Do a market survey
Number one would be to do a market survey so you can use a tool like surveymonkey.com to create your survey, asking a bunch of different questions.
Things like what features would you like? What price point would you be interested in? What complaints do you have about your current provider? Those are really good bits of information, information that you can be gathering. And then you want to put some budget into actually getting people to fill out the survey. People are unlikely to do it for free, so you could do something quite cheap, like a £5 Amazon voucher. If you invested £500, you’re going to get 100 people responding to your survey, which is really, really valuable. I can almost guarantee that the results of the survey are going to surprise you. There’s going to be features in there that pop up that you thought wasn’t that important, but it turns out everybody really cares about this feature or the pricing is going to be another interesting insight. You thought the pricing was about here, but it turns out people are willing to spend a lot more. So there’s loads of really amazing insights you can get to create a great.
Tip 2: Conduct interviews
Another tip is to conduct interviews. So hand pick people that you think are going to be able to give you really good feedback on your product that you’re developing. So that could be beta testers, it could be people that you know in the space. It could be people that you used to work with in your old company, take them out for lunch buy them a drink or just do a Zoom call and just ask them a bunch of questions about the product.
Again, you might have to incentivize them to do this if you don’t already have a close relationship. But hopefully there should be people in your market that you know that are willing to help you out with this and this should unlock some really awesome insights for you. One thing I did in my business that really helped me scale was I took one of my ex clients out for lunch and he just gave me so much really insightful information about what his industry would want from an agency like mine. So I recommend you do that market research piece.
Tip 3: Do a waitlist campaign
My final piece of advice on market research is to do a waitlist campaign. If you’re unsure about whether you should be developing this product at all, or maybe even a feature that you’re thinking of developing or like an integration, potentially do a waitlist campaign. You create a landing page on your website and you drive ad traffic to it and organic traffic and you say, would you be interested in this feature? Would you be interested in this product? If so, sign up to this waitlist and if you get crickets and nobody signs up, then you know it’s potentially a bad idea. But if you get loads of people signing up, then you think, right, this is it. This is the right product, the right feature. Let’s go for it. That’s a very low cost way of testing something out rather than developing the whole thing and seeing how it goes.
Mistake 2: Under investing in marketing
The second common issue I see with SaaS businesses failing is under investing in marketing.
They raise some funding and they just spend all of their funding on developing the product, creating new features, trying to build new integrations. And actually you’ve already had a brilliant product. You should have just started marketing a long time ago.
I often see SaaS companies over investing in sales and under investing in marketing. Lots of founders think that I just need lots of cold calls and cold emails and that’s how I’ll make sales quickly. But ultimately, your salespeople will run out of steam if there isn’t the right marketing to support them. If there’s no brand awareness happening, no ads, no marketing funnel, then those salespeople are going to run out of people to call and it’s just not going to work anymore.
In terms of how much you should be investing in marketing, I recommend you put between 5% and 9% of your total revenue back into your marketing. This can be invested in things like in house marketing, hires, external marketing agencies, ad spend and content creation this should be enough budget to ramp up your brand awareness and really get those leads flowing through the business.
Mistake 3: Not creating a marketing funnel
Mistake number three that I see SaaS companies making is not creating a marketing funnel. Too many SaaS businesses just try and skip to the bottom of the funnel and they say, hey, you’ve never heard of us before, but book a demo today, do a free trial. It just doesn’t work anymore.
You need to create a funnel that people flow through your content and then eventually book the demo. Do the free trial. People need to know you, like you and trust you before they’re willing to engage with your brand and jump on any kind of sales call. Statistically, they need to have seen seven different pieces of your content over four different marketing channels before they are ready to jump on a call. What most SaaS companies are missing is the top of the funnel and the middle of the funnel content. The bottom of the funnel often looks after itself.
Tip 1: Creating free educational content
For the top of the funnel, you need to be creating free educational content. You’re not trying to sell yourself, you’re not asking for people to give you their email address. You are just trying to help people. So youtube videos is a great one, or videos on social media.
Tip 2: Writing blog articles
Writing blog articles is another good one. There’s also blog articles and building out a LinkedIn personal brand where you’re helping people, offering free advice, commenting on other people’s posts. Those are great ways to get attention. And it doesn’t appear like you’re selling to them, but people become aware of you, and that means that they’re in the top of the funnel, they’re in that awareness stage. So once you’ve got people in the top of the funnel and they’re aware of you, you now need to push them to the middle of the funnel where they’re going to show expressions of interest in your brand.
Tip 3: Create lead magnet
An expression of interest can be shown typically in a lead magnet. We’re not going to ask you for any money, but we’re going to ask for your name and your email address. Classic examples are webinars, ebooks, scorecards.
Those campaigns can work really, really well to push people further down the funnel because they’re slightly committing to you. They’re not booking a sales call, they’re not giving you any money, but they’re willing to give you their name and their email address, and they’re willing to invest their time into your brand, which is the most important thing of all, so they’re willing to listen to your webinar, read your ebook, engage with your scorecard. Those are great things.
Tip 4: Create case studies
You can now nurture people down to the bottom of the funnel. A key piece of content to really push people to the bottom of the funnel is case studies. I see so many businesses overlooking these, not having the time to create them.
You should be creating awesome case studies for every successful customer that you have. My favorite structure for a case study is to start with the brief. This is the client. This is the problem they have before they met you. Then you go onto the solution. This is how we solve this problem for this client.
Tip 5: Retargeting ads
And then finally you talk about the results that this client got from working with you. And those sorts of campaigns are brilliant to just get people onto that sales call. A great way to accelerate people further down the funnel is to do retargeting ads.
So retargeting ads work really well on LinkedIn and also meta. So whenever someone comes onto your website or engages with one of your lead magnets, the next time they come onto their social platforms, they’re then going to start to see the next set of ads designed to push people down the funnel.
Mistake 4: Not generating demand from within
The fourth mistake that I see with SaaS companies that fail is that they are not generating demand from within.
The most successful SaaS businesses that I’ve seen scale fast are the ones that hire an external marketing agency like Rocket to take over their LinkedIn ads. Their website updates, their lead magnet campaigns, and at the same time, their founders are creating content internally. Things like hosting webinars, hosting podcasts, attending events, and then you’ve also got the sales team aligning across both of those channels as well. So you’ve got all three angles going at it at the same time, and that is how you get big results. SaaS companies fail when they just hire a marketing agency and just let them look after lead Gen. They don’t do any stuff themselves in house.
The reason for that is because you in house as the founder, you are the subject matter experts. You’ve got more knowledge than any agency that you hire will ever have. An agency can really help you accelerate that growth, but you really need to get your subject matter expertise out there in front of as many people as possible, and that’s how you’re really going to start to get results.
So I recommend all the founders of the business work really hard to build up their LinkedIn personal brand. I also recommend that you do a monthly webinar and at least a bi weekly podcast. Also, a weekly newsletter as well. And all of those things you can’t really outsource with someone else because you really need to get your subject matter expertise in there. Do that yourself. Do the minimal amount of work in terms of you’re the person that’s going to be hosting the webinar, hosting the podcast, but leave the other stuff to an external agency, like the editing, the uploading, the marketing it, the creating ads, all of those things to boost it so you can just move on to the next episode or writing the next piece of content.
Mistake 5: Only doing ads to the bottom of the funnel
The fifth mistake that I see very often is only doing ads to the bottom of the funnel. People get ads wrong all of the time. They only do ads to say, do a free trial, book a demo.
Whereas that’s not really the right philosophy. That’s going to get your funnel flowing. You want to also be creating ads that point to the top and the middle of the funnel.
So those things like webinars, ebooks, scorecards, videos that I mentioned earlier, you should be creating ads to drive traffic to them. A lot of people have objections to that because those are not the campaigns that are going to get an ROI. But you want to be thinking differently.
You want to be thinking, if I just get people into the top of the funnel, I create great content. They will flow down the funnel and eventually I will get an ROI. So you need to think a little bit more long term. You can also create ads pointing to your case studies and your testimonials. These are not even lead magnets. It’s just letting people know that you’re a great company and eventually they will go on to work with you.
Conclusion
In the competitive world of SaaS, success is far from guaranteed. By avoiding these five critical mistakes — neglecting customer needs, poor pricing strategy, inadequate marketing, ignoring data, and failing to iterate — you can significantly improve your chances of building a thriving SaaS business.
By learning from these common pitfalls and implementing best practices, you can steer your SaaS venture towards sustainable growth and long-term success.