MarketingSaaS FoundersHow to Personalize Your SaaS Marketing Strategy

Thomas Smale6 months ago270639 min

Brennan Dunn, a former marketing consultant and founder of RightMessage, wrote the book on personalization for online marketing. Back in 2008, when he was running a consulting firm in Virginia, he was “bitten by the SaaS bug” (as he says) from spending time with friends like Amy Hoy, founder of 30×500 Academy. Fast forward to 2011, and Dunn founded Planscope, a project management and reporting software for consultants that helps its customers close 2-3x more client projects. In founding Planscope, he realized that to gain customers he had to attract people to their site through marketing. Enter: content marketing. Dunn began blogging about all things consulting and this eventually grew into Double Your Freelancing, a community of more than 50,000 freelancers and agencies.

In 2015, Dunn successfully sold Planscope (editor’s note: FE International served as sole advisor on the deal) when the two businesses became too much to handle at once. Then, about a year and a half later, Dunn began thinking about building another software company focused on personalization, which would allow him to utilize his experience in consulting and SaaS. This is the platform which is today known as RightMessage, which helps online businesses personalize their marketing messaging via calls-to action, testimonials and understanding who the page visitor is.

Dunn shares his insights on how online businesses can specifically incorporate personalization into their marketing strategy to increase conversion and customer lifetime value. With a wealth of experience to draw from, he breaks down segmentation, targeting, communicating the right message to your customer and testing for the best results, all in the pursuit of an optimized sales and marketing funnel.

On the basis of having worked with 50,000 freelancers, what do most people get wrong when it comes to marketing?

People aren’t proactive enough and do not do things that won’t scale upfront—direct sales, cold outreach, things like that. People just expect to put up a marketing site, maybe do a little light blogging and get results. When starting software online, the best thing you can do is to have a lot of dialogues. Whereas the sales stage is a monologue, you will learn a lot more through dialogue than you will from monologues. With anything I do now, before I have a webpage or site up, I have conversations again and again and again to find out the objections people have, where people are getting hung up, confused, the language they use, and so on.

Do you count the data more if they’re paying you or do you count free users the same?

I’m not one for going to business pitch events because those are people who have no stake in what you’re building. I don’t give a lot of credence to feedback from people who aren’t actually customers. When I started validating, if you will, RightMessage, I did that by selling consulting engagements that would end up achieving the same thing that RightMessage now does. So I was selling the idea, but I was asking for a lot of money to implement it on a one-off basis. I did that again and again before I decided to actually make this something bigger than just consulting. Whether you’re doing preorders or testing it through something easier like consulting, if someone isn’t committed to it financially, I don’t put much stock into what they’re saying.

Do you listen to a person who’s a potential perfect fit but not yet a paying customer?

Advice from people who aren’t at least a demographic or market fit isn’t great. If it’s someone I’m trying to sell, even if I don’t have a product in their industry or  the right market, their advice is valuable. If I think about people who didn’t accept my offer, and they were the right profile of our ideal customer, we can learn through that too.

If it’s someone who has the pain points that I’m looking to fix, they’re the ones living and breathing the problem that I’m looking to solve, so I want to make sure there’s some sort of agreement about our hypothesis with what we think we’re solving and what they’re looking to have solved.

How can SaaS marketers better improve and personalize their marketing?

If you’re selling software that helps with say, project management, I think the mistake that a lot of people make is they think it’s their job to help people just with project management (or invoicing, accounting, or whatever it may be). The more holistic approach is to ask who can benefit from this product—do they know they need better project management? Meet them where they are now and go and prepare them to be a customer. Ask, “Who is our profile customer?” “Where do they exist online and how can I reach them?” and don’t then go and try to sell them project management software; educate potential customers toward realizing that they have a problem that a, say, project management software—your project management software— can help address. A lot of my consulting peers would wait until the customer thought they needed a new website or a new app, or something like that, but the ones that were doing well instead were the ones out there doing a business seminar teaching people how to grow their businesses. That would then establish the need for their consulting services. Meet people where they are now through educational content, give a lot away, and use this content to push somebody down the conveyer belt towards being ready to be a customer of yours. If you’re only targeting people who know they need software like yours, you’re only reaching a very small part of the ocean of people who could likely benefit from what you have to offer but might not know that they need what you have to offer.

At what stage do you start reaching out to the target market and personalizing that message, rather than make it generally applicable to their demographic?

Regarding personalization specifically, the way to look at it is each person as an individual, just as you would do talking on the phone to them one-on-one. I don’t think it’s ever too early to think, “What can I learn about this person and how can I better present my message to appeal to them?” Some businesses are naturally conducive to this, like a marketplace where you have two sides and each need to be spoken to differently. Or if you have different industries that need software you produce, and one industry wants social proof from others like them and so on. Early on, you’re not going to know enough about all the different personas that could buy from you to know how to speak to them individually and that’s why if you start with things that don’t scale, namely offline conversations, you’ll find you pick up common themes from people in different industries. “This is the language they use, this is what they need, this is what they want,” and then you can compile this into something that can be used at scale with your marketing.

So you’re effectively personalizing based on their interests rather than their personality and such?

The two dimensions are typically either “what do they need?”, and “who are they?” Some combination of both is what we are always doing offline; any decent salesperson amends it based on who they’re speaking with. So on your website too, you need to be thinking about, who are the different types of people that I’ve already engaged with individually that might now be engaging with me on my website?

Are there any questions you found to be the most useful in product research of that kind?

Let’s say you have a newsletter or email course as part of your marketing. A very simple question is “who are you and what are you hoping to get out of reading the newsletter or joining this email course?” By having that be the postscript of an email, you will get back a lot of raw data. Double Your Freelancing had 15,000 email replies to that question. Over time you start to see the different types of people that are coming through and then you can distill that down into something a little more structured. If they come through to you sayin they want education, for instance, on best practices for using a CRM to manage their sales and marketing process—with a company like HubSpot, they go to the website, visit the resource library and subscribe to various guides, courses and tools. In the confirmation email it might say “Tell me a little bit about the company you’re marketing and why you’re interested in hearing from us.” You might get a user who is new to marketing, or an entrepreneur looking to optimize their sales funnel and doesn’t have any software to help them do so—making them a potential client for HubSpot in a few months’ time. You develop different profiles over time. The idea is not to get people to reply with a few sentences; instead, you want to somehow automatically profile people. Maybe that’s through a survey or a link in an email where they can click to categorize themselves, and then the next time they engage with you—whether through email, automated emails or on your website—you can identify the space and the stage of the lifecycle they’re in, so you know how they’re engaging with you and therefore, how you can help them see that they’re in the right place where you can help them. Depending on the data you’re getting back, you can start to determine how to speak to people who categorize themselves as X, Y and Z.

It sounds like a lot of the personalization you’re talking about is through automated, or drip, emails. Is there any situation where the data you collect means you will communicate with them in a different way? Do you make an effort to communicate with them on the medium that they prefer? Whether that’s through Facebook message, phone, in person, email, etc.

“You want to somehow automatically profile people; maybe that’s through a survey or a link in an email where they can click to categorize themselves, and then the next time they engage with you—whether through email, automated emails or on your website—you can identify the space and the stage of the lifecycle they’re in.”

Yep that’s a great example. That’s more of a preferences thing: would you prefer to hear from us in this way versus that way. I usually stick to the content of the message versus the medium through which it’s delivered.

This ties into the need. If, to take the example of HubSpot, someone has a business they started a year ago and they need more sophisticated content management software, they’re basically self-segmenting into the “communicate more with me, quickly” category. This is opposed to somebody who is early stage and perhaps hasn’t launched the business yet, but that could be a multi- year educational drip campaign. It reminds me of a consulting client who was a real estate agent who had us build a product that when he sold a house, it would automatically follow up on a calendar entry to call the client in a few months, in a year to congratulate them on the anniversary, and he has us build this because he said that the average homeowner is going to sell that house in 5 years, so if you can keep that real estate agent top of mind, then when they go to sell in a few years, well, who are they going to use? So in the case of HubSpot, maybe they’re not yet ready for a CMS but you know that if they’re just starting a SaaS business right now they might be ready in 1-2 years, you can find less frequent but longer term messages for them. Conversely, your email marketing could be a little heavier for those people who are ready to sign up.

How do you track the effectiveness of your messaging? Do you iterate from there? Are you tracking a specific type of conversion or action?

With software like RightMessage, we are A/B testing our personalization. We have the control and the experiment, so the easiest thing to do is send everyone the same message and reserve one subset for more specific, focused messages and see which one does better. When we do our personalization tests we’re looking for soft conversions like increasing engagement or getting more people to the pricing page, along with hard conversions like opt-ins, signups and purchases. I look for both, and obviously soft conversions have higher volume—since they’re pretty much the beginning of the funnel— but ultimately, unlike with normal A/B testing, where you have a perfectly good headline that you want to test against another perfectly good headline that you think might be better and it takes a lot of data to see if that works, with personalization typically you have a headline that’s trying to speak to literally everyone and then you change it to a headline that’s focused on someone specific, and unless you’ve completely botched the copy, more often than not, people want more specific targeted messaging. Typically the results are pretty immediate, unlike with A/B testing where you’re asking if changing blue to red will make an impact. With personalization testing, you’re seeing if “Hey SaaS business owner, are you looking for an easy to use CRM?” will that do better than “Try our CRM Software.”

Are there any specific numbers or metrics you aim for to know if something is successful? If you have a segment that you’ve personalized, what sort of CTR or conversion are you looking for?

Typically what we look for is the averages we’re seeing, which is anywhere from a 20- 40% increase on whatever KPI we care about. We’ve had everyone from single digits to, a case study where if Capterra sends them traffic, they change their headline to say how they’re the number one rated scheduling software by Capterra, that’s increased their conversions 289%, and everything in between. We’ve had people who have halved their cost per lead by personalizing based on the ad that people click.

In terms of averages, 20-40% is what we are picking up on our reporting engine. In any case, it comes down to: do you understand the audience and do you understand writing good copy? If you can’t do either of those, personalizing isn’t going to help you much. Do you know how to speak to people differently who run project management software differently than people who run time tracking software?

Some personalization strategies are life-cycle based. This means that anonymous sees one thing, subscribers see another thing, customers see yet another thing. Here, you’re not doing an A/B test, you’re saying if they’re already on your list then don’t ask them to opt-in, get them to do this instead. This is not as easily testable because you’re not doing a comparison in that sense.

For SaaS companies specifically, are there specific metrics or results that you think are important at each stage of the funnel?

The big thing we’re seeing from SaaS companies is that a lot of them have the model with a blog that they update and they email it to their list. Baremetrics is a good example of this; every time they have a new article, they email it out to their list which is made up of subscribers, customers, etc. Subscribers are going to see that article and be incentivized to start a free trial. If they’re anonymous, get them to opt-in to something. Once they’re on your list, then you get them to start that free trial, but not before. Maybe give subscribers the option to pay annually, or upgrade to your next tier, etc.

That’s more lifecycle based, where you have stages of anonymous, subscriber, free trial, free user, paying user, annual user, etc. Depending on where they are in the funnel, incentivize them to do something relevant.

So you can effectively use personalization to push them down the sales funnel?

Well you get a lot of SaaS blogs with competing calls to action. If they’re already on your list, why are you trying to get them on your list if they’re already there? If they’re already a customer, why are you trying to get them to sign up? This is what a lot of people are using personalization software to fix, because at some point it becomes a tech struggle.

Once you have someone as a customer are you still using personalization to improve metrics like LTV and lower churn or does the journey end once you’ve converted them?

Once you’ve converted them, specifically for SaaS, all you can do is push them to upgrade or pay annually or something of the sort. What we have seen a lot of SaaS companies do is have people go back to their homepage, their marketing site, and then click login and log in that way, but when they’re going back to their marketing site, they’re being hit with a giant call to action to make an account but they already have an account, so this isn’t sensible. What a lot of people are doing instead is to redirect the user to go to the marketing site and then into the app. Change the home section on your page to be a link to, say your learning center for people who are already customers. That makes people more successful, which lowers churn, or if you want to incentivize them by saying “upgrade to an annual plan and save 30%” that’s another option there too. You can change the marketing site to one tailored to clients.

Have you found anything to work with people who are leaving your site?

When they’re top of the funnel, not on your list and you know nothing about them, we encourage marketers to look at behavioral cues. You can tell a lot from the site that referred traffic to you. If Neil Patel sends you traffic, you can probably safely assume that that person is a marketer, so speak to them as a marketer. You can look at data like that and say, “Oh they’re coming from this and this site is generally read by XYZ person. HelpSpot is a great example of this, because they have a ton of landing pages based on which industry the referring site is in. So if someone organically lands on the HelpSpot software for transportation landing page, and then they leave that landing page and go over to the homepage or pricing page, you can continue the conversation assuming this is a transportation company. You can display pricing for transportation companies on the pricing page, or logos for transportation companies on the homepage, or testimonials from transportation companies on the signup page.

Now you look like a niche website. It effectively helps you be niche on the fly. Marketers coming through to your site? Show social proof from other marketers signing up. Did they land on a specific page that might indicate which role they fit or which industry they’re in? Did they come from a certain domain? Did they click on an ad targeting people to a specific industry? Looking at these aspects and making holistic changes, not just on a single landing page, is working really well.

What is the best way to track conversions?

If you’re doing it without a software like ours, I advise people to write a cookie that signifies what segment visitors are in and if and when they convert, track that conversion. What we do out of the box to make it easy is define segments like healthcare, finance or retail and define how people get into these segments, and then if they convert by opting into an email list or signing up for a free trial, remember what segments they belong to when they converted. This gives you two datapoints: which segments are converting really well—so if retail companies have a really high conversion rate, those are the ones you’re going to go into and focus your marketing on. If you have certain segments where conversion is really low, figure out what disconnect is happening. Maybe they’re seeing social proof or language that doesn’t resonate, makes them question if the product will help them. Go in and focus your personalization efforts so that when those people come back to the site in the future, they’re seeing a much more relevant, targeted experience. The data you get from segmented conversion tracking shows you who you get more of now and where you’re dropping the ball and how to fix the segments that aren’t performing well.

Is there one struggle you see SaaS companies habitually endure?

“How do I get leads and customers” is a big question. I think the disconnect is thinking that people are aware they have a problem, know this problem can be solved, and know it can be solved by software like yours. There are people who fit that profile but they’re few. Savvy SaaS companies like the HubSpots of the world cast a wide net, not to sell to a wide net, but to bring them into the fold and then over time, teach them how to become their ideal customer. Doing that well separates the scrappy SaaS company that’s always trying to figure out what to do to run ads to people who need their product, versus those with a much more comprehensive, long-term strategy for acquiring customers. This isn’t just producing content for the sake of producing content. It means having specific funnels where the person entering the funnel probably believes XYZ and fits this profile, and we want them to get to this point so that they’re ready to buy from us, and looking for what you can do to get them to get to this point in an automated way so they are ready to buy from you. It’s having a concentrated focus on meeting people where they are now and leading them towards becoming your customer.

Thomas Smale

Thomas is Editor in Chief at SaaS Mag and Founder of FE International, the leading M&A advisory firm for online businesses. He is a serial online business entrepreneur and expert. In his early 20s, he began building and selling small online companies. This turned into a full-time career when he founded FE International in 2010, growing the business with zero funds from ground up and consistently doubling annual revenue, as well as the average deal size. Thomas specializes in advising in the M&A of SaaS, e-commerce, affiliate and content businesses. He has consulted hundreds of internet entrepreneurs on exit strategy, growth and business development.

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