The Complete Guide to Lead Generation for the SaaS Startup

The Complete Guide to Lead Generation for the SaaS Startup

27 minute read

If you’re a software marketer, lead generation is probably the most important consideration. Your sales and marketing pipelines live (and die) by it. Whether you have a sales team or not, you still need to generate leads.

Essentially, there are three pillars to an effective B2B SaaS Lead Generation strategy.

Strategy – Here you ask yourself high level questions such as “Who is your ideal customer?”, “What problems you can solve for them?” and “How do you decide what’s a lead?”

Conversion Funnel – Here you map out your process for capturing and following up on your leads. What steps they will go through from being unaware of your solution, to becoming paying customers, and even to becoming evangelists for your product.

Traffic – Here you decide which promotional channels you’re going to use, and how you’re going to drive people to your website.

SaaS Lead Generation presents a unique challenge. You’re not selling a tangible product, so you need to be very strategic about how you communicate your brand’s value.

Another thing. Your prospects no longer go to your sales team to learn about your product. They now spend as little as 17% of their time with your sales team before they make a purchasing decision.

All of this means you need a solid lead generation strategy, engaging your prospects across in their buying journey. This way, you’ll be top of mind when they’re ready to buy.

By the way, we are going to be here for a while. If you’d rather read this later, grab your copy of The Complete Guide to Lead Generation for the SaaS Startup …It’s on us. We’re going to ask for your email, just so we can keep in touch.

Table of Contents:

  1. What’s in a Lead?
  2. What’s Lead Generation?
  3. Lead Generation Process
  4. Lead Generation Strategy
  5. Customer Acquisition Channels
  6. Marketing Technology
  7. Marketing and Sales Alignment
  8. Account Based Marketing
  9. Agile Marketing
  10. What Should You Track in SaaS Lead Generation?
  11. Improve Lead Generation Performance

That being said…

1. What’s in a Lead?

A “lead” can mean many different things to many different B2B software marketers. The best way to think of a lead is simply someone who’s shown an interest in your product.

Leads can come from your online marketing efforts (a free whitepaper for example), or your offline activities (a trade show for example).

You can further divide your leads into:

MQL’s (Marketing Qualified Leads) – These have responded to one of your communications, such as filling out a contact form for an offer. But they haven’t gone much further than that. You’ll need to nurture these leads until they’re ready to buy.

SQL’s (Sales Qualified Leads) – These leads have gone further, and have shown an interest in becoming a paying customer. For example filling out a form to ask a question about your product.

PQL’s (Product Qualified Leads) – You may think of these as SQL’s who’ve signed up to your free trial. Like SQL’s they’ve shown an interest in becoming paying customers. If you offer a freemium product, they become PQL’s when they ask about features only available to paying customers.

2. What’s Lead Generation?

“Lead generation”, in a nutshell, is the process of introducing your product to strangers, and converting these strangers into interested prospects (and hopefully into raving fans).

Lead generation includes both inbound and outbound tactics. A good lead generation strategy will use inbound tactics to support your outbound activities.

Here’s what this looks like:

Source: Moz.com

“Interruption Marketing” refers to the fact that outbound tactics involve interrupting someone to get their attention. These tactics have their place in the marketing mix. B2B Software Marketing leans towards earning attention organically.

In SaaS terms, lead generation is the process of driving visitors to your website, and capturing their information (usually an email address). Since they’re willingly providing their information, they’ve now become a lead.

Not every lead is ready to buy. Since they’ve shown some interest in your product, it’s a good idea to nurture these leads, nudging them along to becoming paying customers.

3. Lead Generation Process

Since we’ve referred to lead generation as a process, what does this process actually look like?

Generally speaking, there are three steps in SaaS Lead Generation:

Attraction – This is about attracting visitors to your website, specifically visitors who don’t know you or your product. This is done with pay-per-click ads, content marketing, social media and other means.

Engagement – Once a visitor is on your website, you want to keep them there as long as possible, so you can capture their information, usually an email address. A lead magnet is one of the most effective ways to do that. It offers valuable information to your target audience. This can be something like an ebook or a whitepaper.

Conversion – To get your website visitors to act on your offer, you need some kind of CTA or call-to-action, usually a button that leads to a landing page.

The landing page will usually elaborate on your offer, and present a contact form to capture your leads’ details.

Source: HubSpot

That’s the process in a nutshell. The difficulty, however, is in the details.

4. Build a Lead Generation Strategy

Determine your objectives

Ok, we’ve said that the lead generation process itself is fairly straightforward. The challenge begins when you start implementing.

Like a ship sailing out of port, you need to know where you’re heading, so you can focus your efforts.

A great framework is the S.M.A.R.T model. Your objectives should be:

Specific – Clear enough for everyone to understand.

Measurable – How do you know you’ve reached your goals? What benchmarks do you use? You should have metrics and KPIs in place to help you make those decisions.

RealisticDo you have the resources to meet these objectives? To maintain a sense of focus and achievement, large objectives can be broken down into smaller ones.

Time Bound – What time frame are you looking at to reach those objectives?

Here are some questions you can ask yourself to help you figure out your objectives:

  • How much website traffic do you want to achieve over the next three months?
  • How many leads do you want to generate from that traffic, at what conversion rate?
  • How many social media followers do you want to generate, and what level of engagement?
  • What email open rates would you like to achieve?
  • Are these objectives in line with your overall business objectives?
  • What KPI’s should you set to help you meet these objectives? What benchmarks should you use? What milestones should you set?

Figure out who your ideal customer is

Before you can start your lead generation campaign, it makes sense to figure out who your ideal customer is. In other words who might actually need your solutions. This is usually called your customer avatar, or buyer persona, a semi fictionalised representation of your ideal customer.

This is based on market research, and what you know about your existing customers.

Don’t focus too much on what your SaaS product does, rather think of what benefits it brings to your ideal customer, what problems it solves for them.

Your prospects generally find themselves in one of three stages of buying:

  • Awareness of a problem
  • Consideration of a solution
  • Decision on a solution

Some would argue there’s a fourth phase of buying, when your prospect’s not even aware of a problem. These type of prospects, however, require more effort to educate.

An effective SaaS campaign targets your prospects at every stage of the buyer journey.

Here are some of the ways you can target your audience:

Geography – Not common in the SaaS industry

Industry – Effective if your software solves a specific industry problem

Accounts – Effective if your software addresses a narrow niche.

Demographics — Age, gender, income, where they live

Job Title – Think of how your product addresses the challenges, needs and interests of different roles in your target market.

The main point is to obtain as much information as possible at every stage of the buyer journey,

You don’t have to limit yourself to one buyer persona either. Your software product can address the needs of several buyer personas, offering solutions to the same need from different angles ; The Marketing Director, for example, might have different needs to the CFO.

Figure out where your ideal customer is

One of the keys to generating quality leads is positioning yourself where your target customer is, online or offline. Find out where they are and position yourself there.

LinkedIn Groups are a great place to start. Most industries and professions have a presence on LinkedIn, and your positive contribution to the discussion will be noticed.

Your positioning can also include targeted PR campaigns online and offline. Podcasts and guest blogs can form part of your content marketing plan.

Build a Content Marketing Plan

There are two main points to address in a coherent SaaS lead generation strategy:

  • How to attract visitors to your website
  • What lead magnets to offer your audience

There are several promotional channels and content types at your disposal to help you put a roadmap together. Content pieces include blog articles, podcasts, videos, case studies and whitepapers.

This roadmap should closely match your prospect’s buyer journey, the thought process they go through when they’re considering purchasing your type of solution.

You can take advantage of the content gap currently in the SaaS industry to position your SaaS business as a thought leader. You should aim to educate with your content, not sell.

5. Customer Acquisition Channels

Content Marketing

We’ve just mentioned how content should form part of your lead generation strategy.

SaaS businesses are using content marketing to build their brand, attract visitors to their website, and generate leads:

Source: Ascend2

The great thing about content is its compounding power of return. The value of content increases over time. As long as it remains relevant, it will continue to generate leads.

Contrast that with pay-per-click advertising which, although it has its place in the marketing mix, will only generate leads for as long as you keep paying for them.

Think of content as an asset you own, and advertising as an asset you rent. Both will generate leads, but content will provide a much higher ROI in the long term.

Another great thing about content is its versatility. You create your content once and repurpose it for your blogs and social media. You can also tailor your content to align with your lead magnets, and increase conversion.

Specific types of content for SaaS marketing include blog articles, whitepapers, case studies, podcasts, videos and newsletters.

While content creation is a key ingredient in your SaaS lead generation strategy, it’s important not to overlook content distribution. It’s no use investing in content creation if your audience doesn’t see it.

Email Marketing

Automated email (drip) campaigns are vital to the SaaS industry. There’s probably no other industry that relies on it more. Many of your SaaS leads will come from your email campaigns.

Drip campaigns are also a powerful way to segment and target your subscribers, according to their activity. For example, you could target:

  • Subscribers in a specific geography
  • Subscribers who’ve taken a specific action, for example viewing your pricing page
  • Subscribers who haven’t opened their last X number of emails
  • Subscribers who’ve opened but haven’t clicked

Another benefit of email marketing is the high ROI:

Source: SmartInsights.com

A SaaS drip campaign starts with an introduction, followed by a value proposition, an offer, and follow up messages.

Your campaigns can last from a few weeks to a few months. For example, you can email every day in the first week, every other day in the second week, then weekly, then monthly.

With an effective email drip campaign you dramatically improve the odds of converting your leads into paying customers.

Social Media Marketing

Social media platforms are a great way to distribute your content and generate leads. It’s now very easy to include calls-to-action (CTAs) in your social media posts, and drive traffic to your landing pages. It’s also a great place to connect and engage with your prospects in a more personal way.

Source: Foundation Inc

Social media is where your prospects are, so it’s a great place to reach out to them.

Search Engine Marketing (SEM/SEO)

Where content is king, SEO is queen. SEO helps your content get found in the search engines like Google and Bing. By aligning your content with the keywords and search intent of your target audience, you help the search engines deliver this content to your audience.

There’s a misconception that SEO is free. It is technically “free”, because there’s no upfront cost, but don’t forget about the “time cost”: you’ll still need to invest significant time and expertise to produce the content.

There are two aspects to SEO you need to be aware of. Together, they work to improve your SEO results:

On-Page SEO – This is entirely within your control. You produce content that people want to consume and share. You research your keywords, include them in titles, link to internal pages on your website, and optimise factors like page load time and usability.

Off-Page SEO – Gone are the days when swapping links was enough to get your site noticed by Google. These days, off page SEO is about attracting high quality links from authority websites. You can only do that when you produce content that people willingly consume and share.

The social media platforms are an important element in off page SEO. Social influencers play a key role in attracting quality inbound links.

SEO is a great investment in your long term lead generation efforts that will pay dividends over many years.

Product Demos/Trials

Free trials are an important source of leads in the SaaS industry for the simple fact they give your prospects an opportunity to test drive your software at no risk to themselves.

Further, if these leads don’t buy immediately, you can nurture them with additional content that nudges them towards buying.

Product trials are particularly effective when your prospects are tech aware. This kind of audience is often keen to trial the product themselves, rather than speaking to sales reps. And, because trials are typically self-service, they don’t add to your marketing costs.

A word of caution…It’s important to ensure your customers have a positive experience during their trial. It’s worth considering an onboarding process, or extra support, depending on the complexity of your product. You should consider a combination of emails, webinars or calls.

Obviously, prospects who’ve signed up to your free trial are showing intent. So, they’re Product Qualified Leads, and it’s worth tracking them closely.

You should aim to strike a balance between demonstrating value and not overwhelming your prospects, while still being cost effective. With monitoring and optimisation of your product trials, you can generate a constant source of highly qualified leads.

Referral marketing

There is growing evidence that referral marketing is an effective way to generate leads, if done properly. These are low cost leads that close relatively quickly.

There’s an ongoing debate whether you should encourage referrals by providing incentives.

Some think you won’t generate many referrals without incentives. Others think that when you do offer incentives, you risk attracting low quality leads. It’s best to test these scenarios within your own SaaS business, and make your own decision.

You can launch your own referral program with the help of the many software platforms that are available. Or you can keep it simple with a landing page with the specific purpose of capturing these referrals.

To ensure the quality of your referrals, make sure to explain to your referrers what makes a good referral. It could be a job title, company size, or industry. If you are offering incentives, make sure to explain what those are, and how they’ll be delivered.

Make it as easy as possible for your sales and support reps to ask for referrals. For example, you can draft an email template for their use. Or they can simply be empowered to ask for referrals in their day to day interactions.

Pay Per Click (PPC) Marketing

Undoubtedly, inbound marketing methods like content marketing deliver a great ROI for your SaaS business.

However, pay-per-click marketing remains popular among B2B marketers for the simple fact that PPC is scalable. It can deliver targeted leads to your business in a very short period of time and, when done well, costs and results are predictable.

The challenge with PPC campaigns is they’re expensive. To maximise your ROI, you need to ensure your offer or ad is aligned with your landing page, and to ensure that your calls-to-action are crystal clear.

The best advice is to test which channels generate the best ROI for your business. There are variations between industries, but you can generate a significant number of qualified leads with PPC if you do it right.

Ultimately, the key is to balance your organic (inbound) channels with your ad campaigns to maximise ROI.

Remarketing

Remarketing, also called retargeting, addresses the fact that most website visitors won’t convert to your offer, whether it’s a whitepaper, a free trial or signing up to your product.

With a remarketing campaign you can re-engage those visitors that never took an action. Most of us have experienced this, being shown ads for products or services we visited on other websites. This happens when retargeting software installs a cookie (a small text file) in your web browser.

You can, of course (and probably should) use retargeting to re-engage those hard earned visitors. And you don’t have to limit yourself to your website visitors either. Your retargeting software can target subscribers who’ve opened an email for example, or attended a webinar.

Retargeting gives your SaaS brand another chance to establish trust and familiarity with your prospects.

Webinars

Attending a webinar requires a time commitment so you can be sure the leads from a webinar are of a high quality ; 77% of B2B marketers say they use webinars as part of their marketing mix, with 63% using webinars to nurture leads.

Your webinars can be even more effective if you co-host them with an industry expert, exposing your software to their audience.

Prospects are attracted to webinars because it gives them the opportunity to learn something they can use right away. Marketers are attracted to webinars because they give them the opportunity to demonstrate their products, and answer objections. Webinars also provide them with good feedback.

The challenge with using webinars for lead generation is that only about half of registrants will attend the webinar. However, a single webinar could also generate over 1,000 leads.

6. Marketing Technology

The most successful marketing teams have a documented system for capturing and storing their leads. This involves a combination of software and processes. A poll by HubSpot showed 46% using Google Docs, 41% using marketing automation software, and 37% using CRM software.

Lead generation software like HubSpot will help automate all of these tasks.

Other software platforms will provide a more narrow functionality – Lead Pages for landing pages, Hotjar for website visitor tracking, Salesforce for CRM, for example.

However you choose to build your marketing technology stack, you should “stack” your tools in a way that it integrates your customer interactions seamlessly across all of your marketing channels. Key components to a marketing tech stack include:

  • Data cleansing and mining tools
  • Content marketing tools
  • Social media tools
  • Marketing automation software
  • Analytics software
  • Webinar software

Building your marketing technology stack is a lot easier when you know what you’re aiming for.

7. Marketing and Sales Alignment

One of the major challenges in SaaS Lead Generation is aligning the expectations of the marketing and sales teams. Lead generation is the common ground between sales and marketing.

This is where both teams will need to agree on lead generation criteria, and agree on a lead handover process. They will also need to agree on their roles in nurturing these leads.

However, if you only have a limited number of leads, a formal handover process is not necessary.

8. Account Based Marketing

Account Based Marketing (ABM) is a strategic form of marketing, where you identify which prospect accounts you wish to target with personalised marketing.

In traditional B2B Marketing, marketing generates as many leads as the marketing budget allows, and it’s up to the sales team to qualify these leads further. As alluded to earlier, this often creates a disconnect between the sales and marketing teams.

With Account Based Marketing you essentially turn that model upside down. Instead of casting your net far and wide, you focus all your resources on a targeted set of key accounts.

Source: Neil Patel

In essence, in ABM you tailor your marketing messages to each individual account. This takes it far beyond the narrow confines of your target audience or segmented list. This is truly personalised messaging that addresses each account’s individual needs.

The time investment will of course be greater than in traditional marketing but the returns will be much higher as well. This is a very effective approach that bridges the gap between sales and marketing.

9. Agile Marketing

Agile Marketing is an approach that takes its inspiration from Agile Software Development. It aims to improve transparency and adaptability in the marketing team. If you want to get the most out of your limited resources, this might be the approach for you.

True to the philosophy of Agile Software Development, marketing teams work in short intensive bursts known as “sprints” to complete a project. The idea is to chunk the process down as much as possible, testing and adapting along the way. This is very much a data based approach that relies on the whole team working together.

Once each sprint is completed, the team measures the success of their project based on the data they’ve collected. They then tweak their approach to achieve better results in their next sprint.

A sprint typically lasts from two to six weeks, and, as stated earlier, team communication is essential. To keep communication going, and to keep meetings short, agile teams meet for 15 minutes at a time in “stand up meetings”.

Source: McKinsey

10. What Should You Track in SaaS Lead Generation?

Whatever your approach to lead generation, it’s sensible to track the performance of your activities.

Key Performance Indicators (KPI’s) will help you check the performance of your campaigns, and tell you when you’ve reached your goals. You’ll set your KPI’s according to your marketing and business goals. The following KPI’s will help you check the performance of your lead generation campaigns:

Lifetime Value (LTV)

LTV ($) = Average revenue per customer per (month/year) x nbr of (months/years)

This tells you how much a customer is worth to your SaaS business on average. You’ll know if you’re spending too much to acquire a new customer, or if you’re missing opportunities by not spending enough.

Customer Acquisition Cost (CAC)

Once you know your customer’s lifetime value, you also need to know how much it costs to acquire a new customer.

CAC ($) = Total sales and marketing costs / nbr of new customers

LTV:CAC Ratio

This is a measure used in many SaaS businesses to track growth. Industry benchmarks place this at 3:1. Too high, and you’re likely missing an opportunity to grow faster and gaining an edge over your competition.

Cost Per Lead (CPL)

This is probably the most important metric to track to help determine the ROI of your lead generation campaigns. It’s calculated as:

Cost Per Lead ($) = Total marketing costs / nbr of leads

You should track this across all your channels, and across individual channels. This way you can see which channels are most effective and adjust accordingly.

Source: HubSpot

Website Conversion Rates

The website conversion rate shows the percentage of website visitors that take a desired action on your site such as downloading a whitepaper, signing up for a free trial or completing a purchase. In other words the percentage that convert to leads.

Conversion rate (%) = Nbr of leads / nbr of website sessions

It’s much more useful to benchmark your conversion rates against your own performance over time, rather than relying on industry averages. That being said, it’s still useful to compare your performance to the industry average.

Although dated, the following data from Marketing Sherpa shows the SaaS industry average:

Source: Marketing Sherpa

Traffic to lead ratio – This tells you what percentage of organic, direct, social, search, referral and paid traffic to your website converts into new leads. Too high a number and you will need to audit your content or look at your site’s usability.

Click through rate (CTR) – This tells you the number of people who click on a link on a landing page or email. This is different from the conversion rate because it doesn’t tell you whether someone’s converted to your offer. Again, if you have a high CTR but a low conversion rate, you may have some issues with your content.

Landing page conversion rate – This is the conversion rate for a single page as opposed to the website as a whole.

Average session duration – This is the average time a visitor spends on your website. If this is low, it could mean your content is not matching your visitors’ expectations.

Bounce rate – This is the percentage of people who navigate away from your site immediately after viewing the page. Again, a high number indicates your content is not matching your visitors’ expectations.

11. Improve Lead Generation Performance

No matter how well your lead generation campaigns are performing, there’s always room for improvement. A wise lead generation strategy will include a process of continuous improvement. Here are some areas you can target to help you do that:

Lead Quality – The first question you’ll probably have is “Are the leads I’m generating any good?”. Ultimately, the success of your lead generation campaign is based on how well your leads convert to buying customers.

Ascend2 asked 260 marketing influencers whether improving the quality of their leads had any impact on their growth objectives. 95% responded that it had.

Factors measuring quality of leads were:

Source: Ascend2

The following strategies were employed to improve lead quality:

Source: Ascend2

Lead ScoringLead scoring is the process of prioritising the leads in your CRM. This helps your sales team focus on the more valuable leads. An effective scoring system will tag your leads on a numeric scale according to their behaviour and engagement.

This type of points scoring system is being phased out with the increasing use of artificial intelligence software.

Lead Nurturing – Lead nurturing is where you start building relationships with your prospects. The vast majority of leads won’t buy on first contact. It’s your job to guide them on their buyer journey, from first point of contact to purchase.

This is a powerful strategy for your SaaS business because it gives you the opportunity to build trust and credibility by showing you’re an expert in your niche.

Conversion Rate Optimisation (CRO) – You should constantly analyse your campaigns, looking for ways to improve click-through rates (CTRs) and conversion rates at every stage.

A/B and Multivariate Testing – A/B testing involves experimenting with one element of the asset/page. For example, the headline of a landing page, length of a form or image used in an ad. You’ll need a high number of impressions or views to ensure you have enough data to make an informed decision.

Multivariate testing, on the other hand, involves testing several elements of an asset/page at once. This won’t identify which change had an effect, but it allows you to make quicker decisions with less data.

Personalisation – Chances are you’ve already created several user profiles during your product development stage. You can map these to your buyer personas.

You can take personalisation a step further with marketing automation software.

Personalisation is one of the strategic differentiators in the SaaS industry.

Product Trials – Prospects who’ve signed up to your free trial or freemium offer have shown an active interest in your product.

You should treat these leads separately. Prepare messaging that guides them towards a purchase, such as:

  • Educational Emails: Teach them to use your product. Keep it focused on a couple of features at a time.
  • Case Studies: Share examples of how your product has helped other users.
  • Offers: Once your free trial prospects are used to consuming your educational content you should offer them discounts and other offers to encourage them to buy.

Qualify Leads – You could also qualify leads better as they enter your funnels. It could be as simple as adding a few extra boxes to your forms, such as job title, budget or company size.

The result will be higher quality leads for your business and your sales team. The danger is you’ll adversely affect conversion rates. One study has shown that each additional form field can cost you an up to 50% drop in conversion rate.

Track Lead Source – Tracking the source of your leads is another useful tool in your toolbox. This is possible with analytics software like Google Analytics. This information will help you focus your lead generation on the channels that are most profitable.

Conclusion

We’ve covered a lot of ground together. Essentially, lead generation is about communicating your brand’s value, and persuading your audience to engage with your brand.

In the SaaS industry there are no tangible products, so your prospects can only engage with your brand through your content and their experiences with your customer support and sales teams. You therefore need to cultivate a detailed understanding of your prospects’ challenges and aspirations.

In modern B2B Marketing, the marketing technology stack plays a key role in facilitating that process. With so many technologies to choose from, building an effective stack is challenging, and you will need to build it in a way that integrates all your marketing communications.

Tracking your lead generation activities is equally important. Modern analytics software provides valuable feedback to improve your efficiency.

If you feel you need expert help with your lead generation, we’re here to help.


William Alldred is the founder at Impellium. He is an AWAI Certified Copywriter specialising in web content and lead generation for B2B technology companies.