A Guide to the 5 Stages of a SaaS Customer Life Cycle
Think of the last time you made a high-ticket purchase. Something north of $200.
It’s pretty unlikely that you bought it impulsively.
Instead, you probably took your time.
You hopped on Google.
Read customer reviews.
Checked out some videos.
Maybe you even asked your friends and family about their opinions.
After all, you’re spending a lot of money.
So you don’t want to end up with buyer’s remorse.
What if I told you that whatever anxiety you may have had about your purchase, it’s 10 times higher for a SaaS buyer?
It’s true.
Not only are they looking to spend a substantial amount of money, they may also have their decision-making abilities scrutinized by their colleagues.
But once you understand the 5 stages of the SaaS customer life cycle accurately, you can:
- Create content that attracts and delights your target audience.
- Time your marketing messages perfectly to maximize engagement.
- Cut down on users canceling their subscriptions or contracts with you.
Ready to start racking up that user base and scaling your company?
Let’s get into it…
Life Cycle Marketing Stage #1 for Your SaaS Business Model: Awareness
The first stage of the SaaS customer life cycle is the awareness stage.
Here, the potential customer realizes his or her company faces a problem.
Maybe they need to simplify their accounting records.
Maybe they’re unhappy with their current CRM platform.
Whatever it may be, they are looking to find a solution.
From there, the customer starts doing some online research.
In fact, Gartner’s findings show that over 60% of the SaaS buying journey happens before reaching out to a company.
That means buyers are just using good, old-fashioned internet searches to find their next vendor. And maybe a little networking too.
So marketing activities during this stage should aim to increase online visibility and generate interest in your offering.
If you’ve been reading our blog for a while, then you probably have a good idea of where I’m going with this.
Content Marketing
Buyers want content that is insightful
That way, they learn something new from you and start to trust you.
“What kind of content?” you may ask.
Well, for one thing, blog articles.
Blog articles are rich in information, and with the right keywords, you’ll generate free traffic to your website.
Now, for keywords to work, they need to relate to the kinds of questions your customers would ask.
For example, a customer looking for new recruiting software might search for "best recruiting software" or “how can recruitment software help my business?”
Additionally, your buyer might also want to read about other businesses using your software.
For this, write case studies and customer success stories on your website.
Besides blog articles, case studies, and customer success stories, webinars also play a key role in the awareness stage of the SaaS customer life cycle.
Like blog articles, webinars are a form of thought leadership content.
More than that, webinars put a face to your brand, and they can even be interactive if you have a live Q&A or you poll attendees.
But that’s not all.
Recent research from GoToWebinar shows that 73% of B2B marketers and sales leaders think webinars produce the best leads.
Social Media
I would be remiss if I didn’t mention social media for the awareness stage.
According to MarketingProfs, 84% of B2B executives go to social media for purchasing decisions.
For the B2B SaaS space, LinkedIn is probably your best bet.
On social media, your job is to post interesting content. That means sharing industry insights, relevant news updates, and valuable tips.
You can also share your blog posts, upcoming webinars, and other content.
And every once in a while, you can get a little bit aggressive.
For example, cloud-based clinical research platform Medable occasionally shares posts promoting its certification classes.
Bottom line is, once you have compiled lots of great content, you’ll generate organic traffic from people in the awareness stage — then you can promote that same content on social media to generate even more brand awareness for your SaaS.
But creating content is just the start…
Life Cycle Marketing Stage #2 for Your SaaS Business Model: Consideration
Okay, so you’ve got great content.
You’ve got a killer blog, some eBooks, even some industry reports.
But your content is there to generate leads, isn’t it?
After all, you don’t want people to just consume your content and forget all about your brand.
Once a potential customer decides they like your content offer, they’ll need to make a decision.
“Should I stay or should I go?”
If they stay (want your content), that means they’re possibly considering you as a purchasing option.
Be careful though, it doesn’t mean they’re a sales-qualified lead…yet.
But it does mean you’re likely in their list of options.
This is where it’s imperative that your opt-in pages are looking good.
A couple things to keep in mind:
- Position the form field above the fold of the page.
- Write a value-packed headline.
- Use a simplistic design with no clutter.
- Address privacy concerns in the form field.
To learn more about crafting quality opt-in pages, check out these 9 examples from B2B companies.
With well-designed opt-in pages and minimal friction to opting in, you’ll generate a ton of SaaS leads.
And if you’re not already, you should definitely create a newsletter opt-in too.
This will help you with the next step in this life cycle marketing stage…
Lead Nurture
When someone provides you with their contact information in exchange for your free content, it’s time to really get serious.
They’re telling you, “Hey, that content you have, give me more please.”
So don’t disappoint.
For this, your goal is to deliver content that’s as personalized as possible.
People expect content that’s relevant to their tastes.
According to SmarterHQ, 72% of consumers only engage with marketing messages that address their specific interests.
And one great way you can do this is by creating email lists.
With different email lists, you only send content that you know your recipients are interested in.
Although it would be great to just simply ask users for their interests for every opt-in, that’s just not always possible. Moreover, it can even add some friction.
But your leads do give you some hints.
For example, if someone downloads your sales email templates, you can send similar content in the future.
And you can also create new lists based on what type of emails your subscribers usually engage with.
Actually, this is one of the segmentation strategies we use at AutoGrow.
We’ll create new “buckets,” as they’re called in ActiveCampaign, that consist of people opening up a specific type of content.
To illustrate, if I wrote an article about creating an email newsletter, I’d only send it out to subscribers who have engaged with similar content in the past.
By doing this, we nurture our leads in the most resonating way possible.
Life Cycle Marketing Stage #3 for Your SaaS Business Model: Demo/Trial
As soon as a SaaS buyer is convinced that your product might be a good fit for their company, they’ll do one of two things:
- Ask for a product demo
or
- Sign up for a trial
At this point, your potential customer is still on the fence.
But they’re very interested.
Product Demo
According to TrustRadius, 58% of B2B buyers find product demos to be a top source of information.
A skilled demo presenter will:
- Clearly demonstrate the value of the product.
- Speak with confidence and in an easy-to-understand manner.
- Allow the buyer to speak more often.
- Address any questions the buyer has.
- Produce instructions on next steps.
Now, if you look at some of the best SaaS sales funnels out there, most of them make sure that they have a big, vibrant demo CTA button displayed prominently throughout their website.
Doing so draws the attention of your website’s visitors, prompting them to take that next step.
Many companies, like Medable, display a CTA at the top right-hand corner of the webpage.
Others deploy a chabot on their website that asks users a few questions before booking a demo with a sales rep.
But besides your website, you should also try to get leads to book a demo in other customer touch points too — like email, case study pages, and webinars.
Use scheduling software like Calendly to make the booking as easy as possible.
You should also try scheduling a demo with your free trial users (if they haven’t done so already). Speaking of which…
Free Trial
If your lead doesn’t ask for a product demo, then they might just jump straight to signing up for a trial or a free account.
According to Userpilot, 86% of B2B SaaS brands offer a free trial.
And according to research from Recurly, the average free trial conversion rate for B2B subscription-based companies is 66%.
Now, that’s insanely high.
No wonder why so many SaaS brands offer free trials.
During this customer life cycle stage, the buyer just wants to test the waters.
They want to see how your product works and what benefits they can get from it.
Plus, they’ll need to make sure it’s easy to use and allows for any integrations they may require.
And I might mention that it’s important that you provide a self-service option for free trials. Don’t force buyers to contact you in order to test your product.
According to TrustRadius’s survey results, 55% of B2B tech buyers want self-service options when it comes to trials.
It’s all about easability.
Throughout the trial, assign a member of your sales team to each new user.
They should welcome them to the platform and occasionally send follow-up emails.
Because the goal is to make sure the buyer gets the most out of the trial.
And to do that, let’s look at the next stage of the SaaS customer life cycle…
Life Cycle Marketing Stage #4 for Your SaaS Business Model: User Onboarding
At this stage, you need to deliver an excellent onboarding experience.
As reported by Wyzowl, over 90% of consumers believe companies could improve their user onboarding.
So how do you properly onboard new users?
Two words: educational content.
“You mean like blog articles and e-books?”
No, that’s reserved for content marketing (as we looked at earlier).
I’m talking more about providing resources to help users maximize potential with your product ASAP.
In your first few onboarding emails, try to be as helpful as possible.
Be friendly and let users know they can reach out to your customer success team whenever they have questions.
But you can provide self-service options pretty easily — which is easier for the customer and for your team.
You could, like Trello, create a Getting Started guide.
Or, like Eventbrite, maybe you notify new users of your Help Center (or Resource Center).
Video tutorials are also another great educational resource for new users.
Calendly does this with their welcome drip campaign (at the bottom of the email).
If you properly onboard new users, they’ll be much more likely to become a paying customer once the trial is over.
And once they become a paying customer, it’s time for you to focus on the final stage of the SaaS customer life cycle…
Life Cycle Marketing Stage #5 for Your SaaS Business Model: Retention
Fortunately for you, SaaS brands experience some of the lowest customer churn rates among all industries — just 4.90%, as per Recurly.
Although that number sounds great, it’s not telling the whole story.
You see, ProfitWell finds that things like company age, average revenue per user, and contract longevity have a high impact on your churn rate.
So if your SaaS is still in its infancy, you might consider offering low-risk sign-ups to get more users in your brand ecosystem.
But between being relatively new and generating relatively low amounts of monthly revenue, your churn rates are probably higher than 4.90%.
The thing is, more established companies get away with asking for higher price points. And when buyers are spending more money, they’re more committed — and less likely to churn.
Identifying Who’s at Risk of Churn
There are a lot of factors to look at when it comes to identifying users who are at risk of churn.
But I’ll just give you a quick rundown on some of the more common signs to look out for:
- User hasn’t logged into the account for a while.
- User visits cancellation page.
- User doesn’t engage with emails or unsubscribes from them altogether.
- Decision-maker changes companies (use online tools for identifying this threat).
- Credit card is about to expire.
All in all, tracking usage is the best bet.
Because it’s an obvious sign of disconnection.
Once you consider an account as churn-risky, reach out to them quickly and meaningfully.
How Do You Reduce Churn?
It’s simple…you need to add value.
Your customers are your best source of information.
Provide short surveys that ask your customers what you could be doing better.
Not only will asking for feedback signal to your customers that you care about them, but it will also allow you to address the pain points that drive people away.
You could also work with your dev team to try and add new features at no additional cost.
Nothing earth-shattering, but cool, little features — like offering a template library users can utilize — can help keep things fresh and interesting.
Here are some other tactics that will help you retain SaaS users:
- Rewarding loyal customers with upgrades.
- Sending triggered emails based on milestones.
- Providing excellent customer service.
- Allowing a discount for yearly subscriptions.
- Reminding users their credit card is about to expire.
As you detect the causes for churn, you’re in position to create better value for your customers.
And when you do that, it’ll be tough for them to leave you.
In fact, it might even be time to start upselling your premium features.
Conclusion
Your marketing tactics at each stage of the SaaS customer life cycle must be unique.
No one-size-fits-all approach.
Because buyers are looking for specific things at each stage.
When you deliver the right content at the right moment, user engagement goes through the roof.
And just to recap, the 5 stages of the SaaS customer life cycle are:
- Awareness: Focus on generating organic traffic and social media.
- Consideration: Personalize your lead-nurturing campaigns.
- Demo/Trial: Show users product value during a demo presentation and during the trial period.
- Onboarding: Share resources like tutorials, FAQs, and guides.
- Retention: Provide value and reach out to users who are the most at risk of churn.
After today’s reading, you’re one step closer to creating the perfect SaaS sales funnel.
But before you go, let me ask you a question.
Which SaaS customer life cycle stage will challenge your marketing team the most?
Let me know in the comments below.
Keep AutoGrowin’, stay focused.
