What we have found is that each of these lead sources tends to saturate over time, and produce less leads for more dollars invested. As a result, SaaS companies will need to be constantly evaluating new lead sources that they can layer in on top of the old to keep growing.
Since the conversion rates and costs per lead vary quite considerably, it is important to also measure the overall ROI by lead source.
Growing leads fast enough to feed the front end of the funnel is one of the perennial challenges for any SaaS company, and is likely to be one of the greatest limiting factors to growth. If you are facing that situation, the most powerful advice we can give you is to start investing in Inbound Marketing techniques (see Get Found using Inbound Marketing). This will take time to ramp up, but if you can do it well, will lead to far lower lead costs, and greater scaling than other paid techniques. Additionally the typical SaaS buyer is clearly web-savvy, and therefore very likely to embrace inbound marketing content and touchless selling techniques.
For Entrepreneurs.comInvestment in marketing automation tools is expected to reach $25 billion by the year 2023
Companies with longer contracts (2+ years) reported the lowest annual unit churn
80% of venture capital investments take place in the enterprise
More than 1/2 of SAAS companies increased their spending on customer retention last year
Growth rate accelerates in the expansion stage ($2.5M – $10M ARR)
The median annual unit churn for SAAS companies was 10% in 2016
A 1% increase in pricing strategy yields an average 11% increase in profit