$600 billion. That’s how much money Gartner forecasted would be spent on SaaS products in 2023 alone.
For SaaS businesses, the focus is often primarily on creating an exceptional product. Marketing often takes a backseat, leading to a series of common yet detrimental mistakes.
These missteps can hinder the potential success, irrespective of the product's quality or innovative features. With so much competition in the SaaS space, you need a quality product. But in today’s market,
Here are the five largest marketing blunders frequently observed among indie developers and SaaS founders. Knowledge of these pitfalls can equip you with the foresight to avoid them, fostering a more balanced approach to product development and marketing.
1. The Myth of the Field of Dreams
The famous quote "Build it and they will come" may ring true in the world of fiction, but unfortunately, this isn't the case for marketing your product.
No matter how great your product is, you won't make any sales if no one knows about it.
Word-of-mouth
Marketing is vital to generate buzz and awareness for new businesses without an existing audience or customer base. Therefore, neglecting marketing efforts or believing your product will sell itself is a massive mistake.
2. Overcapitalizing Development at the Expense of Marketing
While creating a top-quality product is essential, it doesn’t have to be perfect. Spending all of your time and resources on development may lead to a fine-tuned product, but that’s just half the race.
The second half is all about marketing and selling the product, and you can’t do that if you use up all of your resources in the first half.
Many startups make the mistake of pouring their entire budget into development, leaving little room for marketing efforts. As a general rule, you’ll want to reserve around 40-50% of your overall budget for marketing in your initial launch phase.
This will help generate sales, providing cash flow and support for a more sustainable business model.
Even the best product will not sell without
A quality product with excellent marketing is just good business.
3. Miscommunication: Losing Sight of Your Target Audience
It’s easy to get lost in technical jargon when you are passionate about your product.
However, remember that your target audience may not understand such language. Tailoring your marketing efforts toward your audience's understanding and using their preferred terminology will benefit all parties.
Use simple, everyday language to communicate. Explain how you understand their particular problem and how you can fix it using their wording, not yours. Using relatable stories and terms goes a long way in connecting with potential customers, boosting sales, and humanizing your company.
4. The Trap of Instantaneous Success or Failure
Marketing is an ongoing process that requires constant fine-tuning and adjustments.
It’s unrealistic to expect immediate success. Failure in the initial stages does not equate to a failed product.
Instead of getting discouraged by lackluster results, take feedback from your peers and potential customers, and use it to refine your marketing strategy (and product). This is also where using data-driven solutions comes into play.
Data plays an integral role in today’s business market. If you want to run a successful business, you’ll need to know how to gather and translate the data. Once you know how to interpret the information, you can hone your service and your promotional tactics to find success.
Here are some metrics you should track beyond just revenue and profit:
- Conversion rate - If 100 people visit your website, and only 1 makes a purchase, your conversion rate is 1%.
- Customer Acquisition Cost (CAC) - Taking from the example above, if you had to spend $100 on paid ads to get 100 people to your website, your CAC is $100 because it took $100 to make 1 sale.
- Churn rate - If 100 people subscribe to your product for a year, and 5 of those cancel, then your churn rate is 5%.
- Customer Lifetime Value (CLV) - This is the estimated revenue you can expect from a customer. For example, if you sell a $20/month service and your average user subscribes for 6 months, your LTV is $120. This is important because you may spend $40 to acquire a customer upfront, but LTV lets you know that on average, you’ll make $80 from that one sale.
5. Productive Procrastination - A Hidden Enemy
Many people dread the sales process, making marketing a task that is easy to put off. This can lead to
However, these tasks often precede actual marketing efforts, hindering your product's growth potential. The majority of customers won’t be swayed by minor details like dark mode. Instead, focus on actively promoting your product and its key features to attract potential customers.
Add in your features over time as people request them. It shows your customer base that you appreciate their feedback and are willing to implement changes when needed.
Learn From the Mistakes of Others For Long Term Success
Avoiding these common marketing pitfalls could be the determining factor between success and failure for your SaaS business.
Building an exceptional product is only half the battle. The other half lies in effectively marketing your product to the right audience using the right strategies.
Don't shy away from making necessary adjustments based on feedback and market research. Avoid the trap of overcapitalizing development at the expense of marketing and ensure communication with your target audience is clear and relatable.
Even if it appears productive, procrastination in marketing can significantly hinder your product's success. By being mindful of these