SaaS Sales

How to Build & Optimise a SaaS Sales Funnel

Perry Steward
February 4, 2023
How to Build & Optimise a SaaS Sales Funnel

Do you get many leads for your SaaS business but only a few conversions? Or are you struggling to find leads in the first place? 

The answer to all such problems usually lies in your SaaS sales funnel.

An effective sales funnel will bring relevant leads to your business and help your team with a clear process and strategy to convert those leads.

It will also help you understand your customers better and define their journey, challenges, and decision-making process so you can take your business to the next level.

As the link-building and full-service SEO agency, we have closely worked with many SaaS companies and helped them refine their marketing funnel. In this guide, we’ll take you from the basics of a funnel to the revelation of our secret strategies that will help optimize your SaaS sales funnel.

What We'll Cover:

What is a sales funnel?

A sales funnel consists of multi-stage sales processes that start with building awareness and extend beyond the first purchase.

SaaS sales funnel

Let’s say a person wants to buy a project management tool. Will they automatically make a decision? Unless they have researched a lot or have a strong referral from an acquaintance, the buying decision won’t happen that quickly.

They will first get aware of all the project management tools in the market, say Asana, Trello, or SmartTask (awareness stage). Then, read comparison articles or go to each tool’s website and check what they offer (interaction stage).

After some research, they might make their final selection of choosing Trello (preference stage). So they enlist for a free trial of Trello, and after a satisfactory trial, they become a paying customer (conversion stage). 

But it does not end here! Trello must keep working hard and provide experiences to retain that customer (loyalty stage).

How is the SaaS sales funnel different?

A traditional sales funnel has more or less these stages: awareness, interaction, and conversion. Let’s take beauty products as an example. You’d want the prospect to know about your brand, read reviews or watch Instagram reels about your products and then purchase them.

A SaaS sales funnel, on the other hand, doesn’t stop at the initial purchase. Think about it. What if your team got excited because you onboarded an enterprise company that bought a monthly plan for 100 users? What if you didn’t nurture this user? What if they didn’t renew their subscription the next month?

That’d impact your monthly recurring revenue, wouldn’t it? 

That’s how the SaaS sales funnel differs from the traditional funnel. It places great importance on the loyalty stage, aka the customer retention phase. Otherwise, your customer lifetime value would be quite less, and you’d also see high churn rates.

Why do SaaS companies need a sales funnel?

Here are four reasons your SaaS company needs to have an effective sales funnel:

1. You can clearly see what’s working and what’s not working. For example, if you see that you aren’t able to convert leads from the awareness stage to the interaction stage, you might need to refine your current strategies.

2.  A sales funnel helps passively engage your prospects till they are ready to purchase.

3. You can understand your customer’s needs and expectations better. For example, if many prospects have trouble choosing a tool, you can create comparison guides and put them on your website.

4. A SaaS sales funnel focuses on the primary metric of free trial to paid conversions. This helps your team make strategies to improve this metric and base all other vanity metrics, like engagement, traffic, etc., around the primary metric.

What are the SaaS sales funnel stages?

While different SaaS companies will make modifications to their sales funnel depending on their target audience and their requirements, here are four main stages that most SaaS companies follow:

1. Awareness 

At this stage, your potential buyer is digging for information. They might not yet understand the full extent of their problem; thus, they are not actively looking for a solution.

They might come across an article or mention of your SaaS business in the media. This is how they become aware of your company. A reason why you should focus on driving traffic to your website and blog at this stage and portray your expertise in the domain.

It’s important to note here that the focus of this stage is not on hard selling. Instead, it’s about educating your customer, answering their questions, and becoming a trusting source of information.

 Here are some ways you can get more leads and increase brand awareness at this stage:

- Create content like how-to guides, blog posts, lead magnets, and explainer videos. For example, take this blog post by Trello.

screenshot  blog post by Trello

Image source

Not only does Trello provide a helpful guide, but when the potential user reads this guide, they also find benefits of using Trello to manage multiple projects.

- Use paid ads to promote your product, content, or service. For example, Trello could have a Google ad for when a user types in the keyword “project board”

- Optimize your SEO strategy to get more organic traffic. 

2. Engagement  

When your potential user signs up for your newsletter or provides an email address to download free resources such as ebooks, it shows that they have moved on to the engagement stage of the funnel.

Look how Trello has put up a lead magnet on its blog so interested readers can immediately subscribe to it.

screenshot  how Trello has put up a lead magnet on its blog

Image source

It shows that the lead is interested in your content and, thus, is coming back to consume more content. You can then send these leads content they might find valuable or even start educating them on the topics related to your product.

For example, if a lead showed interest in a teamwork ebook by Trello, Trello could further direct them to an article like “How to use Trello for better teamwork?”

It’s important that at this stage, you don’t just educate your leads with general topics but guide them toward your product pages or specific use cases. You can even send email marketing campaigns highlighting the pain points your SaaS tool solves and case studies of clients succeeding with your tool. 

Many SaaS companies gently nudge the leads towards tutorial articles for specific use cases so the prospect can familiarize themselves with the tool before subscribing to it.

3. Exploration

At this stage, the potential customer is actively researching a solution to their problem. To help them with their research, you can create comparison articles. Here’s one by Trello.

screenshot Trello

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Besides comparison articles, you should also focus on highlighting your product's benefits and how it differs from the others in the market. You can do this with case studies, testimonials, reviews, and success stories.

An interesting strategy Trello uses at this stage is publishing articles on how users can use Trello with their existing apps. 

screenshot Trello uses at this stage is publishing articles on how users can use Trello with their existing apps

Image source

Why does this help? 

Your leads might be using quite a few SaaS applications already. They might want to understand how they can integrate their tool pack with yours and achieve the most benefits. Creating such articles thus gives an added reason to the user to pick your tool over the others.

If you offer a free trial, this is the right stage to encourage your leads to opt for the same. It helps them try out the product and see the benefits for themselves. 

Leads may also contact your sales team if they have any questions or queries. This can be a golden opportunity for you to resolve their doubts and move them seamlessly to the next stage.

4. Conversion 

Now that your prospect has entered the final stage of the sales funnel and subscribed to your SaaS tool, you need to focus your efforts on retaining them. 

You can even measure key SaaS sales funnel metrics at this stage to find out conversion success.

The first step is to provide them with a good onboarding experience. This becomes even more important if your tool is complex or has many features. You don’t want your user to get confused and switch to another tool in the next month.

Here are four ways you can work on customer retention:

- Conduct customer satisfaction surveys at regular intervals to get feedback and insights that help improve your product or service. Here’s one by Slack that makes its customers feel exclusive because they mention that the survey is sent to only a chosen few.

screenshot of Slack Survey

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- Give exclusive offers to customers who complete a pre-defined time with your business—for example, offering a discount to those users who have completed a year with your tool.

- Create newsletters or email campaigns to educate users on product updates, new feature additions, use cases, helpful blog updates, and case studies that help them succeed with your product. Here’s an example by CoSchedule.

Screenshot CoSchedule

Image source

- Upsell to existing users so that they can get more value from your product.

How to build a SaaS sales funnel?

Now that you know everything about a SaaS sales funnel, let’s understand how to build one.

1. Identify your ideal customer profile

Identify your ideal customer profile

While you may want to cater to a large audience, finding those ideal customer segments that will use your product the most is important. After all, you don’t want to spend your money and resources running after those prospects that aren’t the right fit for your business.

Here are some questions you can ask to frame your ideal customer profile:

  • What core problem is our tool solving? Which kind of firms or individuals is trying to solve the same problem?
  • What are the characteristics of these firms or individuals?
  • What are their motivations and goals?
  • What is their buying process like? Which channels or platforms are they most active on?
  • In the case of a firm, who will be the decision-makers? What role will they have?

Creating an ideal customer profile will help your marketing team narrow down the marketing strategies that will be most relevant to them. For example, if you find that your ideal customers are the ones who are most active on LinkedIn, you can choose that social media platform to educate them about your product.

You can also create laser-focused content for them to effectively turn leads into paying customers.

2. Create the right sales messaging

A good business knows much about its product. A great business knows much about its product and customers.

After identifying your ideal customer profile, you can head on to create the right sales messaging for all funnel stages. 

This means using the nuanced language your customers prefer and the kind of content they actively engage in. For example, many B2B customers prefer getting information from the email. If your customer segment prefers the same, you can create effective email marketing campaigns encouraging prospects to subscribe to your tool.

Other important things to keep in mind while creating sales messaging:

  • Incorporate your value propositions into the messaging.
  • Create a brand voice and make sure you use the same across all mediums, be it while talking to a prospect or through the content you share on your website.
  • Communicate in simple and effective terms about the kind of service you are providing and how it can benefit your end user.
  • Avoid making use of jargon and professional language. Keep it simple and concise.
  • Conduct competitor research to determine their sales messaging at each stage and how you can make yours even better.

3. Build a lead generation campaign

Once you’re clear about your target audience and the kind of sales messaging you will be using, it’s time to start generating leads. You can follow one or both of these approaches to generate leads:

Inbound lead generation: This includes prospects reaching out to you. It could be through a phone call, email, or filling out a form to get in touch with your sales team. Most SaaS companies generate inbound leads with the help of SEO, content marketing, ad campaigns, referral programs, webinars, and so on.

Outbound lead generation: This means reaching out to your prospects via cold emails, phone calls, events, or account-based marketing. When you opt for this method, you’ll need an extensive sales team to find the ideal prospects, research them, get in touch with the key people, and ultimately convert them into paying customers.

Most SaaS companies prefer to use a combination of both these techniques.

How to optimize your SaaS sales funnel?

Below are six ways you can optimize your SaaS conversion funnel:

1. Generate awareness with TOFU content: If you’re struggling to find leads or your SaaS business is still new, you need to generate brand awareness before you push your product to people. TOFU (Top Of The Funnel) content helps you promote your product and its benefits so potential customers can get in touch with you. This could be blog posts, ebooks, guides, tutorials, and how-to guides.

One SaaS company that has been brilliant with TOFU content is Hootsuite.

screenshot  Hootsuite Platform

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2. Actively promote your product: Whether you want to increase your free trial to paid conversion rate or upsell to an existing customer, promoting your product is necessary. You can do this through your blogs, pop-ups, or email sequences. Here’s how Spotify shows a pop-up that asks users to upgrade to access premium features.

screenshot Spotify shows a pop-up that asks users to upgrade to access premium features

Image source

It’s important to note that you must promote your product smartly. Too much, and you’ll dissuade the customer/prospect from using your product.

3. Help your customers succeed: When it comes to SaaS, there’s a clear motto. If your customers win, you win. Why? Because at the end of the day, if your customer is not getting any value from being associated with you, they will not stay loyal. You must keep providing that value at every marketing funnel stage. This could mean helping users understand different product features and sharing articles or ebooks on utilizing your product to achieve a certain result. Here’s how Spotify shares an email to its premium users informing them of the different features.

screensot Spotify shows a pop-up that asks users to upgrade to access premium features.

4. Qualify leads: Not all of the leads you generate may be worth pursuing. A reason why you should have a process for figuring out your marketing qualified leads. You can check for the authority, intent, and kind of actions they took to become a lead. You can even use lead-scoring software to find out those leads you should spend time on. This will also help you get more conversions.

5. Optimize your content and back it with SEO: This is not just limited to creating compelling content but also refreshing old content, using keywords, aligning the content with the search intent, segmenting the content’s delivery, and making use of different content platforms. This helps you become an authority figure in your niche and make your brand more credible.

6. Encourage habituation: To retain your customers, you can encourage them to use your tool daily or even help them build habits around your tool. You can do this through push notifications to encourage daily use, allowing the users to see their results, and making the tool easy to use. Here’s how Canva sends a congratulatory email to its users when they reach a milestone.

screenshot  Canva sends a congratulatory email to its users when they reach a milestone

Final Thoughts

Building an effective SaaS sales funnel may take some time, but it is crucial to achieving success.

Once you define the funnel stages for your business, ensure you also create strategies to optimize each stage. You can use some of the above strategies as a reference or experiment and see what works for you.

You can even take the help of your different teams like sales, marketing, and customer success to help you understand your customers better and then create a sales funnel accordingly.

If you need help with the content and SEO part of the sales funnel, reach out to our experts at MADX.

Read more about SaaS:

SaaS SEO: The ultimate growth strategy

19 best SaaS marketing strategies for 2023

SaaS Marketing: The ultimate founder’s guide

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