SaaS marketing 101: marketing for growth and survival

Main illustration: Adam Avery

There’s one thing all wilderness survivors have in common: they didn’t get eaten by a bear.

The only way to make sure your customers see your message is to understand their behaviors and mindset.

There’s a strong parallel between surviving in the wild and starting a business. You’ll either find customers and get them to pay you, or your business will fail and your idea will die.

Looking at your business in this stark way will put you in the right mindset. It’s fun to dream about what you’ll do when you have millions of dollars of revenue and profits, but if you can’t get those first few customers to pay you, then you’ll never have the chance to sell to customer No. 1,000 or 10,000.

So how do you build demand? How do you find customers? How do you avoid being eaten by a bear? There’s no easy answer, but the key to success lies in creating a repeatable process for generating demand.

What is demand generation?

You’ve definitely heard “demand generation” thrown around as a startup buzzword before, but let’s be clear in our definition before we start. Demand generation is the creation of systems that build awareness of, and a market for, your products with target customers.

We can break this down into a few different elements to make it clearer:

  • Products: the actual things you sell.
  • Customers: people who buy your products.
  • Systems: a combination of people, processes and technology that can run over and over again.
  • Awareness: knowledge of your existence and what you do.
  • Demand: interest in what you do and the value it creates.

The specific demand generation system you build varies based on what type of product you sell and the customers you hope to attract. However, there are common themes to keep in mind as you sketch these out for yourself.

1. Start with a point of view

Your business exists to solve a problem. It might have begun as a problem statement like “Email is too expensive” or “Catching a cab is too hard.” It might also have started with loudly chanting words like “AI” or “blockchain” while dancing around a fire. Regardless, you need a reason that your company exists besides a desire to make a lot of money.

We won’t dig into this too deeply here, but you should read this post from Des where he clarifies how to sharpen your company’s point of view.

2. Determine your positioning

Ask yourself who your product is for, which is another way of asking who your customer actually is. When you know this, you should then clearly define what your business actually does for the customer, what value is generated for them and how your way is better than the old way they might have done it.

Here’s an example for a fictional company:

“The new Artificial Intelligence shovel, by, helps onion farmers dig holes faster, so they can plant more and sell more with less back pain than traditional shovels.”

Breaking this down using our questions, we get:

  • What is the product? An artificially intelligent shovel.
  • Who is the customer? Onion farmers.
  • What value is generated for them? Time saved through faster planting.
  • How is it better than the old way? Less back pain than traditional shovels.

3. Understand your customer

The best marketing in the world is irrelevant if nobody sees it. The only way to make sure your customers see your message is to understand their behaviors and mindset. Research can be fast and almost free, so doing your homework up front can save a lot of extra work later.

The more specific you are about your target customer, the easier it is to understand how to reach them and what message should be used to do so. For our shovel company, for example, onion farmers are a smaller audience with different behaviors than do-it-yourself homeowners. That means their needs and habits are more specific, which gives you a huge advantage by narrowing the range of answers for the next questions you need to ask:

  • How do my target customers buy products like this today?
  • Where do my target customers congregate to be with people like them?
  • Where do my target customers get their information personally?
  • Where do my target customers get their information professionally?
  • Who do my target customers look up to?
  • Who do my target customers trust?
  • What time of year is most important and relevant to my target customers?

The more specific you can be, the better. If every onion farmer in the world visits the annual OnionCon, then you should note that down along with who spoke there over the past few years. If they’re all listening to OnionPod, you need to note that and listen through the archives to discover what topics they discuss.

4. Generate ways to reach your audience

Use conservative assumptions and apply them with rigor to every tactic you’re considering.

This one is simple: Dream up all the ways you could reach your audience and write each idea on a giant list. There’s no harm in dreaming up ideas, big or small, at this stage, because we’ll assess them for feasibility later.

Here are a few ways we could reach our onion farmers:

  • Buying OnionCon or OnionPod sponsor slots.
  • Facebook advertising based on interest in onions.
  • Google ad targeting for the word “shovel”.
  • Sending sample shovels to all the speakers at OnionCon.

Once you’ve got those, the cold hard reality is next: the numbers.

5. Win on paper

As cheap, fast and easy as it is to dream up ideas, it’s the same for making simple models to help prioritize and determine if they’re worth pursuing. Doing so involves some thinking about the different paths and steps people might take to buy your product, followed by basic math.

These are our “funnels” and they are informed by every aspect of how the customer might convert, from where they’ll find you to the scale of the channel you’re using.

Here’s an example for our idea to sponsor an episode of OnionPod, which charges $1,000 to place an advertisement:

  • 25,000 listeners of OnionPod.
  • 2% of listeners (500 people) visit your website because of the ad.
  • 2% of those visitors (10 people) buy a shovel.
  • $100 per shovel sold amounts to $1,000 in sales.

From here, subtract all the costs you might incur to create that shovel (manufacturing, storage, etc.) and you’ve got a rough idea of whether the tactic is a profitable idea worth pursuing. It also provides a great opportunity to think about ways to optimize.

To do that, you should theorize the outcomes that could change if you improve a specific component of your tactic. Maybe you can create a better advertisement and get 5% of OnionPod’s listeners to your website, or maybe you should just charge more for the shovel to make each sale more profitable. As you adjust these factors in your model you’ll quickly learn if the math works (or not).

Remember to use conservative assumptions and apply them with rigor to every tactic you’re considering. Don’t believe your own spin, either; this is a business, not a religion.

When the funnel is in place you should rank each idea by two factors: difficulty (cost, time to execute, feasibility) and impact (revenue, profit, customers acquired). At different stages of your company’s growth you’ll optimize for different things: maybe now it’s customer acquisition, but later it’s going to be profitability.

You only need one thing to work

Big companies need many demand generation systems with different characteristics of profitability and acquisition to work together for growth. You don’t need such a complicated system (yet), so focus on finding just one that works.

When you find something where the math adds up, run that tactic as frequently as you can. Each time you execute on it, you’ll remove waste and increase impact.

That first demand generation channel, when working properly, will help you survive, protecting you from the bears long enough to think about the next big idea. When your first system is maximized, or you need to grow even faster, you can refer back to your long list of ideas and add a new test to the mix.

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