Written by:

Matter Made

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Demand generation is a powerful tool to use in your B2B marketing strategy. It’s a full-funnel approach that engages customers and prospects at every stage.

Demand gen works by creating targeted interest to develop value for your brand. By providing essential information at the moment of need, demand generation strengthens relationships. This approach works at each stage of a prospect or customer relationship.

How Does Demand Generation Work?

A properly developed demand generation strategy uses multiple approaches. It uses strategic content, strategic messaging, data, and buyer personas to align customer needs with valuable insights.

Demand gen positions your brand as a provider of valued information at each stage. It’s the glue that connects you to your customers.

There are several key stages to demand generation. Below we will delve into each and show how it can transform your marketing strategy. The stages are:

  • Raising Brand Awareness
  • Developing Content
  • Nurturing Relationships for Sales
  • Retaining Customers

One important note: Demand generation is not lead generation. Lead generation is a narrower, focused strategy designed to collect qualified leads for sales teams to pursue. One example is collecting names and contact information on an online form.

Demand generation is a more comprehensive approach that nurtures relationships at each stage. While it uses many of the same tactics as lead generation, it’s a broader strategy.

Raising Brand Awareness

One of the most essential tasks marketers need to complete today is to develop brand awareness. Today’s customers want to relate to brands they frequent. They expect brands to know them, their needs, and interactions with your business.

Brand awareness leaves buyers with a lasting impression of your company. It fosters trust, confidence that the solutions your company provides are reliable, accurate, and impactful.

Brand awareness has multiple components, including:

  • A clear brand identity helps you differentiate your company from competitors. Your identity should provide customers with easy recall of who you are and what you’re about
  • A go-to-market strategy based on research that articulates what you’re going to sell and how. Demand marketing can be seen as a way to prove whether your assumptions are correct. It can also help to adjust based on data and results
  • Buyer personas articulate who you’re trying to reach and what characteristics they share. Identifying and developing brand personas lets you understand who you’re approaching and how
  • Thought leadership helps position your brand as an expert and authority within your space. You want people to think of your brand when they think about industry leaders
  • Strong reviews management, which includes encouraging customers to leave reviews and responding appropriately to customer feedback
  • Social media presence on the right platforms. Leveraging social media lets you set the tone and messaging for your brands. It’s a powerful way to communicate broadly

Developing Content

Your content strategy is at the core of your demand marketing approach. You want to develop content that addresses customer pain points and answers critical questions.

Content development should occur for each phase of the sales funnel. By identifying key needs at each phase, you’re able to position your brand as authoritative and valuable.

Content should answer the questions that buyers will have throughout the customer journey. The information should also be displayed in multiple formats. Today, for example, video is an increasingly important medium for gaining information and answering questions.

Among the content options are:

  • Blogs that educate your website visitors and drive SEO, with keyword-optimized content. Your blogs should be about topics of keen interest to customers and prospects.
  • Email marketing gives leads multiple opportunities during a campaign to engage with your brand. Email marketing can answer questions and speak directly to their needs while acknowledging actions already taken. If resources permit, this content can be personalized to provide more resonance
  • Conversion optimization which uses your website to gain information about prospects. At strategic points, visitors should be encouraged to seek more information. Gated content such as white papers, product guides, or videos allows you to secure contact information. Investing in website user experience (UX) tools can help to ensure visitors navigate your website to maximize leads
  • Paid advertising increases your presence and can be highly targeted based on desired customer demographics. Paid ads on both search engines and social media attract visitors and facilitate a larger prospect pool
  • Conversational marketing using chatbots and other technology lets you connect with visitors. Automated and live engagement lets you answer questions and add value to the visitor experience

Nurturing Relationships for Sales

Leads are critical and sales teams are eager to connect with prospects, especially those of high value. However, with demand marketing, there’s much more than a marketing-to-sales handoff.

Throughout the sales process, marketing tactics can deepen the relationship and assist in closing deals. Sales enablement tools include:

  • Case studies, with narratives from actual customers about the work you’ve done and solutions you’ve provided. Compelling case studies build trust and provide real-world examples of your brand’s impact
  • Testimonials are narratives provided by your customers, ideally, those who are similar to your target audiences. They are quick statements that reinforce your value and worth to a customer’s peer
  • FAQs and fact sheets offer details in easy-to-digest formats. FAQs typically use a question-and-answer format for commonly asked questions. Fact sheets are often more detailed with specifics about products and services

Retaining Customers

Retaining customers is essential for repeating business, advancing your brand’s reputation, and extending the customer relationship.

There are many ways you can provide services that focus on retention, including:

  • A knowledge base where customers can share solutions and insights and learn from each other
  • Customer support that includes ticketing tools and transparency to track inquiries and provide timely service
  • Incentive programs for customer referrals can generate new business while providing discounts for existing customers
  • Customer-only content such as first-to-know emails, special discounts, and promotions tell customers how valued they are

Demand generation marketing connects you to customers at every step of their journey. It’s the right way to engage, provide value and build credibility for deeper long-term relationships and more opportunities for business.

Demand generation is a full-funnel approach that’s designed to provide information at the moment of need.

Demand gen is critical to success today in B2B marketing. It’s a strategy that builds brand awareness and demand for your products and services. Today, demand generation uses multiple channels and approaches with decentralized information used across platforms.

Despite the power and efficacy of demand generation, there are many persistent misconceptions. Here’s a look at 7 myths about demand generation and why they’re inaccurate.

Misconception #1: Demand Generation and Lead Generation Are the Same Things

People incorrectly believe lead generation and demand generation are one in the same. However, they are very different in scope and practice.

Lead generation is a much more basic sales strategy that’s focused on a singular goal: obtaining more leads. It’s a basic approach that’s designed to collect contact information from customers who might be interested in your product or service.

Lead generation takes a blanket approach to market to the masses. One example: using blogs or webinars to entice readers to leave contact information on a web form.

This is not to diminish lead generation. There are effective ways to garner more leads. Many businesses, impatient with the time needed to deploy demand generation, turn to lead generation instead.

Demand generation is a more comprehensive approach to sales and marketing. With demand gen, you will attract, convert and keep customers.

Demand generation is about nurturing relationships at each stage, as opposed to lead generation, which is more transactional. Instead of passing leads on to a sales team for follow-up, demand gen looks to meet prospects and customers where they are.

With demand generation, you identify what a customers’ needs are and provide solutions, whether it’s content, free tools, or product guides. These solutions are dependent on where a customer is in their journey. They can be personalized using data gleaned from the customer relationship.

Misconception #2: Demand Gen Is a Top-of-the-Funnel Activity

It’s a common misconception that demand generation focuses exclusively on the top of the funnel. Generating demand, however, is not just about acquisition. It’s about engaging and re-engaging customers.

Demand generation takes the long view. It’s about obtaining new prospects and converting those prospects. It’s also about reinforcing your brand and continuing to provide value throughout the lifetime of a customer’s relationship.

Misconception #3: You Can Control the Buyer Journey

Demand generation marketing is not about controlling the buyer. In fact, today, the buyer has more control over the customer journey than ever before.

Why? First, the expectations are different. Customers want relationships with the brands they use. They expect brands to know the extent of the engagements, their preferences, and their needs.

In addition, buyers today have lots of information available, including independent product reviews, message boards, and social media channels. These forums give buyers far more insights into your products and services and the ability to do their own research.

With buyers having information and freedom, demand generation is the right choice. You cannot control the buyer but you can be prepared to meet them where they are.

Demand marketing focuses on having high-value information available at every stage of the buyer’s journey. Creating great content and using your CRM to manage buyer engagements results in better outcomes for buyers and your brand.

Misconception #4: Demand Generation Is a Singular Approach

Demand generation is not a singular strategy to use for your marketing. Instead, it’s the collection of multiple marketing initiatives, across multiple channels.

These activities are coordinated, integrated, and driven by shared data. They also are evolutionary and iterative. If one approach is not working, such as search engine display ads, demand gen allows for rapid pivots. You can shift out of one strategy and try another.

The key is to develop a strategy that engages prospects and customers across channels. Social media, web, SEO, email, video, and other channels all factor into engaging your target audience.

The reason for this approach is evident. Your buyers do not operate on one channel only. Your marketing should not, either.

Misconception #5: There Are No Targets in Demand Generation

With its multi-channel approach, demand generation sometimes suffers from an assumption that targets are not necessary.

The opposite is true. You should use targets for each challenge used. Targeting likely buyers on the right channel at the time of need is the smart move. It leads to higher levels of engagement and higher conversion rates.

Setting these targets requires some work. You need to know who your ideal customers are. You need to understand when they will be looking for solutions and where.

Misconception #6: Content Format Is Irrelevant

Not true: Walls of copy rich in information and stuffed with keywords is the way to go with content.

Remember, the buyer is in control of the relationship. And your brand will not be the only one creating content.

You need to cut through the clutter and noise. That means creating content in the format that your customers want. Increasingly, customers are interested in content in different formats – infographics, videos, and podcasts.

The good news is that often you can repurpose content. A Q&A video with a product manager can be converted into a blog post. A new product announcement can be used to create a graphic that explains key features and enhancements.

Misconception #7: You Need Channel Specialists to be Successful at Demand Generation

Channel specialists are certainly valuable. They know how to effectively manage one channel and bring expertise and experience to your business,

However, they are just that – a specialist who knows one channel, albeit well.

Demand gen requires the use of multiple experts who understand the big picture. You need a team that can work together on strategy messaging, execution, and measurement.

Matter Made helps B2B SaaS businesses grow. Our demand generation, go-to-market, growth marketing, and paid media services help brands attract more customers and convert more sales.

To learn more about how Matter Made can optimize your demand generation strategy, contact us today.

It's normal to ask if there is a difference between demand generation vs. lead generation. On the surface, they sound like two sides of the same coin—like calling your pipeline the Buyer's Journey vs. a Sales Funnel.

But demand gen and lead gen are different concepts.

Understanding that difference transforms the effectiveness of B2B SaaS marketing strategies. It re-focuses your efforts on what matters at the end of the day—the quality of the lead.

At the same time, you'll avoid wasting your limited time, resources, and talent on leads who will never—I repeat "never"—become paying customers.

When you're finished here, you'll know the difference and how/when to use both to get more out of your SaaS marketing.

Demand Generation vs. Lead Generation: The Definition

Demand Generation is the act of deploying marketing campaigns to create demand for a product or service. It uses data to determine when, where, and how to accomplish this effectively.

Lead Generation is the act of leveraging marketing to collect contact information from people who may be interested in your product or service now or in the future.

The Purpose

With demand generation, you create buzz. Get the right people excited and talking about a problem your SaaS fixes. You want them to want you and see you as the solution to their business problems. As demand progresses, you become the missing link to meeting their goals, something they can't do without.

While demand gen does generate leads through landing pages, its purpose is to play the long game. You want awareness and positioning that can only happen over time.

By doing so, demand generation expands your reach and becomes a magnet for your ideal customers.

Lead generation, on the other hand, focuses on capturing identifying information, like an email. This allows you to personalize and continually improve the effectiveness of your nurturing.

Through it, you achieve a higher and faster MQL-to-SQL and Lead-to-Close Ratio in the shorter term. You increase your ability to deliver the most relevant marketing messages and content.

Additionally, that data reveals the precise moment a lead meets qualified lead criteria. This makes it possible to time the hand-off to sales and Speed the Lead expertly.

In the long term, you're gathering both quantitative and qualitative data. This helps you understand which leads are worth your time and energy. What are the signs that a lead is ripe for a conversation with sales?

Now, take this information back to the demand generation side. Through it, you improve your demand generation targeting precision.

And it comes full circle.

You have a clearer understanding of who to target. As a result, you generate demand from the right people, refining your top-of-funnel.

In doing so, you generate higher quality leads. And the cycle begins again, leading to exponential outcomes.

So it's no wonder 78% of marketers say they plan to commit a higher percentage of the marketing budget to demand gen, or at least keep it the same. While the top priority is generating leads, they recognize demand gen is critical to meeting that KPI.

Timing

Demand Generation vs. Lead Generation isn't an either/or proposition. You need both to grow your company effectively, but timing matters.

You have to create the buzz first. Any lead generation efforts will trickle if you're not implementing strategies to generate that demand first.

You can break this timing down into three stages of awareness:

  • Stage 1. Non-aware. They don't even know they have a problem. Top-of-funnel (ToF)
  • Stage 2. Problem-aware. They know about the problem but not how to fix it. Middle-of-funnel (MoF)
  • Stage 3. Solution aware. They know solutions exist but aren't sure which is right for them. Bottom-of-funnel (BoF)

This all comes down to the right message, the right time. One way to achieve this timing is through educational content.

This serves two primary purposes.

  1. It generates awareness. Of the problem, then the solution.
  2. It builds authority. Why should people listen to you in the first place? Content builds your authority and expertise. At the end of the day, they have a reason to choose your brand over another.

You'll focus on creating demand by ensuring the right people see the right content at the right time. To this end, specific content formats work well at each stage.

  • Stage 1. Non-aware. Make it easy and "low-risk" to start learning about their problem. Become present where they are but don't push them. Use long-form guides, blog posts, etc.
  • Stage 2. Problem-aware. Get them to take action toward learning more in-depth information. At the same time, you build trust and authority. Offer white papers, eBooks.
  • Stage 3. Solution aware. Help them finalize their decision. Share case studies, free trials, and demos.

Timing matters. Throwing problem-aware and solution-aware content at non-aware people will bounce right off. Sadly, a lot of B2B companies are doing just that.

Only 2% of B2B companies create non-aware content at ToF. This represents a tremendous opportunity for those who do.

At any given time, many more people don't know they have a problem.

Creating Demand

The gurus can argue all day long about whether demand is created or products merely fill a void already there. Both are true to some extent.

The problem exists. It's real, and it's impactful.

But with so many moving pieces in the typical business, it's not always easy for your future customers to name it, let alone find a fix.

If people aren't talking about the problem, few are aware of how impactful it is. They don't know others share the same frustrations. So it doesn't cross their minds that there could be a better way.

You need to create that buzz. That's where demand comes from.

By doing so, you start a chain reaction.

More leads. Better leads. More Leads. Better leads. Higher and higher revenues. Exponential growth.

Time to Create that Demand

It's all about timing. It's time to take your business to its next growth stage—generate demand, so high-quality leads come to you.

Curious about the power of demand gen? See how Dropbox increased targeting engagement by 6.5X.

How to Track the ROI on Your Growth Marketing Campaign

The Next&Co Digital Media Wastage Report shows that 41% of the average company's marketing budget is wasted, with wastage being the highest among ecommerce, retail, and finance companies. 

Calculating your Return On Investment (ROI) is perhaps the most important thing you can do to keep your growth marketing spending on track. Knowing your ROI will help you:

  • Make value-conscious choices
  • Prove the value of your marketing to leadership
  • Justify your marketing budget for next year 
  • Choose which marketing channels to invest in 

This article will show you how to calculate your growth marketing ROI step-by-step.

Step #1. Set Up Ways To Track Your Marketing Success

You can't calculate marketing ROI without knowing what "return" you are getting. So the first step is to set up ways to track your marketing successes. 

Common ways to monitor your digital marketing campaigns include:

  • Google Search Console. Google Search Console helps you monitor your website's performance in search results. 
  • UTM links. You can use UTM codes to track how your website visitors browse on Google Analytics. 
  • Facebook Pixel. Facebook Pixel will help you track conversions from Facebook ads.
  • Social media marketing analytics platforms. Platforms like Buffer Analyze, Sprout Social, Hootsuite, and Zoho Social can help you analyze your social media marketing Key Performance Indicators (KPIs). 
  • Ecommerce analytics tools. Platforms like Hotjar, Kissmetrics, and Optimizely can help you analyze ecommerce KPIs. 
  • Customer Relationship Management (CRM) tools. CRM tools like HubSpot, Salesforce CRM, SAP CRM, and ZOHO CRM can help you analyze customer interactions.

It's best to set up these tools before you start publishing your marketing efforts.

Step #2. Gather Data

Next, sit back and start gathering data. It's best to monitor your marketing for several weeks or months if possible, as a longer data collection period will ensure your results aren't skewed by outliers.

Step #3. Calculate Your Marketing Costs

Then, calculate your costs. 

You'll need to take two types of costs into account:

  1. Direct costs

Direct costs are expenses that have a clear price tag and can be directly tied to your marketing and sales funnel. Marketing software, Paid-Per-Click (PPC) ad spending, equipment, marketing staff salaries, and freelancers are all direct costs. 

  1. Indirect costs

Indirect costs are expenses that aren't directly tied to your marketing but are still essential to make running the marketing department possible. Rent, electricity, and salaries from non-marketing staff (like receptionists or administrators) are all indirect costs. 

You may need to consult your accounting department to figure out your indirect costs. Once you have your figure, add it to your direct cost figure to get your total marketing spend. 

Step #4. Calculate Your Marking Returns

Now it's time to calculate your marketing returns, and there are several approaches you could take here. 

If you want to simplify things, you could take your entire net income figure for a given period and attribute 100% of it to marketing. 

Or, if you want to be more precise, you can go through your marketing channels one-by-one and calculate how much revenue your company earned as a result of it. This is easier with some channels than others. Some ad analytics, paid media, and referral marketing tools, for example, will help you calculate how much revenue your brand earned from ads. Sales from social media marketing and content marketing, on the other hand, are harder to attribute. 

Whatever method you choose, you should finish this stage with a clear figure.

Step #5. Execute the ROI Formula 

The final step in measuring digital marketing ROI is executing the following ROI formula:

ROI = (marketing revenue - cost of marketing) / cost of marketing

For example, if your total revenue figure was $45,400 and your total marketing costs were $12,300, your ROI would be 2.69.

If your ROI figure doesn't look right, make sure you have only included marketing returns and costs from a single, clearly defined period (like quarter one or 2022, for example). A common mistake marketers make is including a year's worth of an expense rather than just the cost in a set period. 

Other KPIs to Watch with Growth Marketing 

  • Customer Lifetime Value (CLV) = average order value x purchase frequency rate x average customer lifetime
  • Customer Acquisition Cost (CAC) = (cost of sales - cost of marketing) / number of new customers acquired
  • Conversion rate = (total conversions / total visitors) x 100
  • Cost-Per-Click (CPC) = total amount spent / total clicks
  • Open Rate  = (number of emails opened / number of messages sent) x 100
  • Average Transaction Value (ALV) = total sales / number of transactions

Tracking other KPIs and presenting them alongside your marketing ROI can give the ROI figure more context. It can also help you explain fluctuations in your ROI across multiple periods. 

Calculating Marketing ROI, Growth Marketing, and Matter Made

Measuring marketing ROI will help you quantify your growth marketing efforts, build a strong PLG funnel, and analyze your digital marketing campaign efficiently. Naturally, knowing your marketing ROI can help your growth marketing strategy succeed long-term.

Want to embrace growth marketing but don't know where to start? Let's talk. 

Why You Need to Implement a Growth Marketing Strategy

Budding SaaS brands leverage growth marketing by constantly trying innovative marketing strategies, measuring their efficacy, and scaling them up accordingly to get more paying customers that add to a strong user base.

In this article, let’s look at five reasons why a go-to-market strategy is a must-have for every budding business aiming for hyper-growth.

1. Growth Marketing Improves Your Brand Awareness

The biggest challenge growing businesses face is that only a tiny percentage of their target audience is aware of them. This increases the effort that a brand has to put in to convert leads into loyal customers.

Growth marketing focuses on getting your business on the front page of the internet in the following ways:

  1. It increases your ranking on search results through strategies like link building and PR mentions.
  2. It boosts your social media following by capitalizing on User-Generated Content (UGC) and increasing activity on social media platforms.
  3. It increases the dwell time of visitors to your website through content creation.

All the above advantages get you more qualified leads, boost your conversion rates, and improve your average customer lifetime value.

2. Growth Marketing Increases ROI

Traditional digital marketing tends to have a lower Return On Investment (ROI) as it shares a one-size-fits-all promotional message without considering the factors that make each of its viewers unique.

Growth marketing is just the opposite. It segments the audience based on various parameters such as age and location and shares customized messages by understanding their pain points and requirements.

This personalized approach pulls the prospect closer to your product or service as they can relate to the message on a deeper level. Consequently, your conversion rates and customer lifetime values increase, and your customer journey improves.

An indirect way growth marketing increases ROI is that some of its tactics (like email marketing) can be automated, saving you time and labor.

In the long run, through sustainable growth marketing tactics such as content marketing, the cost of acquiring customers decreases. 

It also becomes more effective, as you can target your approach for each funnel state (as we know some demand generation content works best at certain stages).

Source: Content Marketing Institute. A table showing the effectiveness of each marketing channel at each buyer stage.

3. Growth Marketing Makes Customer Acquisition Easier 

You have ‘acquired’ a customer when a prospect who doesn’t know your business exists eventually purchases from you. For that, they need to find you, connect with you, and trust that you will give them the value they are looking for.

Growth marketing facilitates each of those things.

Through a diverse set of strategies like content marketing, referral programs, and social media marketing, you can increase brand awareness which will make your audience trust your business.

Once they become a lead, you can nurture them through the sales funnel using strategies like email marketing. Drip marketing campaigns through email (or any platform) are a great way of delivering value through personalized content.

Furthermore, by leveraging UGC, social mentions, and testimonials, you can earn their trust by delivering a great customer experience. This will not only increase the rate of customer acquisition but will also keep the acquisition costs low and improve customer retention.

4. You Can Adapt Growth Marketing to Your Needs

Adaptability lies at the heart of effective growth marketing. This makes growth marketing platforms an excellent option for businesses of all sizes, regardless of their marketing budget.

Based on your current objectives, you can facilitate rapid business growth by investing in selective growth marketing strategies. 

For instance, if you want to position yourself as a thought leader, you can just focus on PR campaigns. Or, if you want to increase your conversion rates, you can invest in tactics such as programmatic ads.

However, to know what will work best for you, it can be hugely beneficial to take assistance from successful growth marketers who have a wide array of experience. As every business, including yours, is defined by many variables, it can be easy to make mistakes that you cannot afford.

This is where a growth hacking team like Matter Made can help you immensely. 

5. Growth Marketing is Scalable 

Unlike traditional marketing, you can selectively scale up your growth marketing efforts to give you specific results.

For instance, if you want to increase the number of visitors to your website, you can scale up your content efforts. If you want to get more followers on social media, increase your activity on corresponding social media platforms.

Furthermore, you can scale up any of your growth marketing experiments whenever you want to. 

Apart from being adaptive to your need of the hour, scalability is another reason why working with an experienced growth marketing manager is indispensable.

Need A Growth Strategy? Chat To Matter Made

Growth marketing helps you in the following ways:

  1. It increases your brand awareness
  2. It improves your marketing ROI by targeting potential customers that are more likely to convert
  3. It makes it easy for you to gain new customers while reducing CAC
  4. It adapts to your needs and constraints of the moment
  5. It scales in the way you want to and when you want to

Matter Made's growth marketing team has helped SaaS companies like Loom and Dropbox grow astronomically by creating and implementing various growth marketing strategies suited to their respective niches.

Our growth hackers can help you strategize and execute growth strategies for faster revenue growth, get you more customers through demand generation, and cement your position as an industry leader through paid media campaigns.

Interested? Let’s talk.

5 Reasons You Should Hire a Growth Marketing Agency

Google Trends data shows that searches for "growth marketing" have grown substantially over the past five years. This isn't too surprising — growth marketing is highly scalable, provides a strong Return On Investment (ROI), and helps brands grow sustainably long-term. 

Mastering growth marketing isn't always easy, so many companies choose to work with a growth marketing agency. This article will shed light on five reasons your brand should hire such an agency. 

#1. They Have Experience With Other Companies at Your Growth Stage

As brands grow, they often face a common set of growing pains related to marketing. For example, startups often lack the marketing bandwidth to run full-fledged campaigns on all digital platforms simultaneously. Or, new ecommerce businesses often struggle to get the engagement snowball rolling (getting your fifth follower is far easier than getting your 150th). 

Growth marketing agencies work with brands over long periods, so they know how to minimize growing pains and steer a brand through the chaos. 

Growth hackers have also implemented a wide range of strategies across many digital platforms, so they know what works and what doesn't. This knowledge is invaluable, as it will help you make smarter marketing choices straight away so you can yield returns quickly. 

Note: Read "How To Build a PLG Funnel Your Sales Team Can Use."

#2. They Can Plan Industry-Specific Long-Term Strategies

Compared to regular marketers, growth marketers view the sales funnel more holistically. Plus, they focus on metrics like Customer Lifetime Value (CLV) and retention rate over short-term revenue. 

The growth marketing sales funnel stages: awareness, consideration, action, adoption, and expansion and their corresponding lifecycle stages.

As a result, growth marketing strategies are like snowballs — they grow as they gain momentum. Growth marketing is really a long-term approach. 

While a traditional marketing agency can help you design a strategy weeks to months in advance, your growth team will think months to years ahead. Naturally, they can help you design marketing that is sustainable and provides long-term returns. 

Growth hackers are also excellent researchers. They can dive deep into your industry and learn what motivates your customers and how to market to them best. When you hire a growth marketing team, you get a holistic, industry-specific plan. 

#3. They Can Save You Money

The initial investment of hiring a growth hacking marketing agency often makes brand owners and managers nervous. However, if the brand invests wisely, it can spend less on an agency than it would if it tried to run a fully-fledged marketing strategy in-house. 

Growth marketing agencies can also get brands a better ROI. Agencies have a lot of in-house expertise, so they can optimize your marketing budget with smart investments and reduce marketing wastage. 

Research on 1,000 marketers by Rakuten Marketing shows that around 26% of marketing budgets were wasted in 2018, while a 2022 report on 41 companies spending $500,000 to $31 million on marketing estimates marketing wastage is 41%. So wastage is a major concern for many brands. 

#4. They Reduce Your Workload

Growth marketing agencies often employ marketers who specialize in Search Engine Optimization (SEO), paid media, content marketing, social media marketing, email marketing, referral marketing, video marketing, and other marketing niches. So, when you work with an agency, you get access to experts without having to expand your in-house marketing team. 

Working with a growth marketing company can also reduce your workload substantially. Marketers can either complete marketing tasks for you or help you automate them. 

You'll know whether you've hired a good agency if they're easy to work with. We recommend looking for an agency that communicates well, provides regular updates, consults you in the decision-making process, and works transparently. 

#5. They Can Help You Become Results-Driven

Growth marketing is generally more adaptive than traditional digital marketing (though that is changing as marketers get better access to marketing data). When they implement a strategy, growth hackers conduct frequent tests and experiments to assess how your audience is responding. Then, they optimize your marketing materials to obtain the best result. 

Naturally, hiring an agency can help you become more results and performance-driven. Performance marketing offers benefits like:

  • Higher ROI
  • More efficient marketing
  • Optimized campaign planning
  • Enhanced forecasting 
  • Faster speed to lead times
  • Greater customer retention

Working with a growth hacking consulting agency also means you don't need to design your marketing analytics infrastructure alone. Many new brands and startups with limited staff and busy schedules often struggle to dedicate time to building this infrastructure, so it's nice to get it off your to-do list.

Note: Read "3 RevOps HubSpot Automations Your Business Needs."

Performance Marketing and Growth Marketing Agencies

Growth marketing can improve your ROI, grow your customer base, and help you achieve rapid and sustainable growth. 

You can see the value of a growth agency by looking at a case study like that of Allocations. Matter Made helped Allocations develop marketing infrastructure and run campaigns on Google, Bing, and LinkedIn. As a result, Allocations increased its pipeline three times in the first 90 days

Want results from growth marketing? Let's talk. 

It's inevitable that some growth marketing strategies won't succeed. Failure could be due to poor planning, restrictive budgets, a lack of actionability, limited resources, or any number of the dozens of obvious reasons that are probably going through your head right now. 

What's not always obvious are the elements that make a growth marketing strategy succeed. This article will describe six growth marketing best practices you'll see among successful strategies and actionable ways to incorporate them into your strategy.

#1. A Focus on the Entire Sales Funnel

You've likely heard Aristotle's saying "the whole is greater than the sum of its parts" before. It's especially true for growth marketing strategies. 

Marketers working on unsuccessful strategies tend to focus on minor details like how an image looks. Meanwhile, those working on successful strategies look at the larger picture. Instead of pinning success on a single promotional tactic, they ensure each tactic contributes to the ultimate goal: converting leads into customers. 

One great way to keep your focus on the whole sales funnel is to ask yourself, "how will this turn leads into customers?"

Stages of the sales funnel: awareness, consideration, action, engage, and expand and their corresponding lifecycle stages.

Another great trick to try is customer journey mapping — it helps you understand how potential customers will respond to each tactic so you can be deliberate about each point of contact. 

Tip: Read "How To Build a PLG Funnel Your Sales Team Can Use" and "Speed To Lead: What Is It and How To Improve Yours."

#2. Customer Engagement Through Multiple Channels

An experienced growth marketing team knows that no two audience members have the same digital habits. Instead of focusing entirely on one channel, successful growth marketers take a multichannel approach to reach the widest audience possible.

As of 2022, the most popular channels for growth marketing are email marketing, Search Engine Optimization (SEO), content marketing, referral marketing, video marketing, social media marketing, and event-based marketing. 

Thankfully, you don't need to come up with fresh content for each of these. You can re-purpose images, GIFs, copy, topics, and keywords. For instance, you could take sections of a blog post and turn them into a social media post or marketing email. 

Tip: Use cross-promotion to direct traffic between channels during the lead nurturing process.

#3. A/B Testing

If you've read a lot of digital marketing content, you've likely seen the advice "make your campaign real-world data-driven" often. It's well-meaning (and effective), but non-data scientists often struggle to find actionable ways to use data. 

That's where A/B testing (or "split testing") comes in. 

With A/B testing, you publish two pieces of similar marketing with slight variations and compare their performance in the first few hours. Then, you use the winning variation to reach a wider audience.

For example, you could send out the same marketing email with different subject lines to see which line works better. Or you could A/B test:

  • Ad copy 
  • Video titles 
  • Call-To-Actions (CTAs)
  • Link placement 
  • Images
  • Titles and meta descriptions 

The great thing about A/B testing is that it's fast, budget-conscious, and beginner-friendly. You can likely conduct A/B tests with tools you already have, including email marketing and social media analytics tools. 

#4. Buyer Personas

When you know who you are promoting to, you're better equipped to figure out what marketing messages, tactics, and approaches will work best with them. Successful growth marketers use buyer personas to pinpoint their target audience. 

Buyer personas are fictional representations of audience members that identify characteristics like age, gender, location, income, education, occupation, values, desires, and goals. 

The best way to get accurate buyer personas is to conduct market research on your customers. In particular, you want to concentrate on pain points, motivations, and their decision-making processes — these will help you understand what drives them.

#5. KPIs

Successful growth marketing strategies have clearly defined success criteria in the form of Key Performance Indicators (KPIs). KPIs give you a clear direction from the start and keep your strategy on track. 

Here are some KPIs to try in your strategy:

  • Marketing Return on Investment (ROI)
  • Ad campaign ROI
  • Number of new customers 
  • Number of recurring customers
  • Cost-Per-Customer (CPC)
  • Customer churn rate
  • Conversion rate 
  • Total impressions and views 
  • Click-Through rate (CTR) 

#6. Decisiveness in the Tactics You Use (and the Tactics You Don’t)

An effective marketing strategy goes "all in" on the channels marketers choose to use. 

In practice, for example, this means that if you're going to invest in a paid media campaign, you dedicate the staff, resources, capital, and effort to producing the best ad campaign possible. 

At the same time, if you don't elect to use a tactic or channel, you just ignore it completely rather than put together a weak strategy. Invest all your resources into the channels you expect a strong return on. 

Matter Made Can Help You Implement Growth Marketing

Limited budgets, poor planning, sloppy execution, and a lack of foresight are common among ineffective growth marketing strategies. Meanwhile, successful marketing strategies share these six elements:

  • A focus on the sales funnel as a whole
  • Multichannel engagement
  • A/B testing
  • Clear buyer personas
  • KPIs
  • Decisiveness with their marketing efforts

Mastering growth marketing can take your business far. With Matter Made's help, Productboard increased MoM ENT lead growth by 99%, and Dropbox increased Target Engagement 6.5 times.

Want help from growth marketing experts? Let's talk.

In this breakdown of demand generation, we’ll define the practice, show its importance, and share tactics.

We’ll show you how to create effective demand generation strategies and show you the tools necessary for long-term success.

What Is Demand Generation?

In its simplest form, demand generation is the creation of consumer desire to purchase your product or service. Demand generation goes far beyond marketing. It bridges marketing, sales, and customer service and success to create demand and interest with your target market both pre- and post-purchase. It’s the process of relationship nurturing that builds interest for your business.

It’s about generating interest in your products and services across platforms and channels. Demand gen is a powerful way to create targeted interest and awareness of what you’re selling.

One of the great advantages of demand generation is the ability to measure results broadly and deeply. Demand gen is often mistakenly measured only on its lead impact, but it can also be measured in brand engagement metrics (traffic through to lead generation,) pipeline metrics such as conversion rates and velocity and/or business metrics like deal size, customer acquisition cost and annual recurring revenue.

Demand Generation vs. Lead Generation: What’s the difference?

 

Because demand generation marketing often is associated with securing leads, people often get thrown off by terminology. Demand generation reflects your business is about attracting audience interest by creating resources and messaging your customer's desire.

Demand generation differs from lead generation. What is lead generation? It uses nurturing – a process that converts readers to customers. Lead or leads generation converts viewers to customers after you’ve convinced them that you’re the thing they need.

Lead generation tactics include sign-up forms on websites that allow visitors to register for newsletters. Another common tactic is a call to action at the end of a blog post, inviting readers to a free consultation.

Another way to think about it is this: Lead generation allows you to convert, demand generation allows you to grow.


Why is Demand Generation an Important Component of Your B2B Marketing Strategy?

A McKinsey report notes the foundational shift in marketing today the “consumer decision journey.” Customers – B2B or B2C -- are in control, and their decisions at multiple stages can shape whether you make a sale.

On the B2B side, marketers need to recognize how deeply empowered customers are today. They have multiple choices for nearly everything they purchase, accessible at any time.

As customers compare and consider products, they will go through multiple rounds of evaluation and assessment. Marketers need to align their work to the buyer’s journey to know how to generate demand. That means measuring and growing brand awareness and customer attitudes. They also need to understand the needs and wants of their target customer.

In B2B marketing, demand generation is crucial. Demand generation serves several essential functions of your marketing operation. Specifically, demand generation helps your business:

  • Expand Market Reach and Market Share. A demand generation campaign delivers materials and messages designed to build trust in your brand, business, and products. This content needs to reflect not just what your company is, but also what it can do. What problems can it can solve for customers? An effective B2B demand generation campaign knows what customers’ pain points are and speaks directly about solutions to alleviate issues. By showing the value your brand brings to a B2B customer, you engender trust and, in time, market share.
  • Customer Reengagement and Relationship Nurturing. It’s far less expensive to re-engage a customer than to recruit a new one. It’s cost-effective to develop generation strategies that reconnect customers to your brand. Extending, advancing, and growing the relationship leads to more sales, more opportunities, and deeper ties to your company. Reconnection takes some creativity but may include strategies such as product updates or user satisfaction surveys. Resonant content and contacts that are relevant to where your customer is in their journey with your brand make sense. Building rapport extends the customer’s lifetime relationship with you and provides more revenue opportunities.
  • Larger Deals and ROI. With enhanced brand affinity and reputation, you’re likely to secure more and bigger orders from B2B customers. You’ll also have more chances to convert visitors and past customers into new or recurring business. By securing regular, repeat, and upgradeable customers, you’ll see a faster and larger ROI, too.

Top Benefits and Challenges of Demand Generation

As with any marketing strategy, there are advantages and disadvantages to demand generation. Here is a closer look at some of the key benefits and challenges marketers face.

Benefits of Demand Generation

There are considerable benefits to focusing on demand generation as part of your overall marketing strategy, including:

  • Increased Brand Interest. More than anything, demand generation is an opportunity to define and express your brand. Your demand generation strategies will drive brand awareness by showing what your brand values, stands for, represents, and offers. Demand gen builds excitement and helps customers identify companies they want to buy from. With demand generation, you can help customers see what you can do for them and add value to their businesses or lives
  • Improved Quality of Leads. Having many leads is a good thing. However, what’s more important is having quality leads that are more likely to lead to conversions to sales. With targeted content and campaigns, you’ll attract ideal customers to your website and products or services. In addition to more volume, you’ll get leads more inclined to purchase what you’re offering. In turn, better leads result in lower acquisitions costs per lead
  • Increased Customer Engagement. Customers, whether B2B or B2C, want relationships with the brands they use. With better demand generation, you begin to build those relationships earlier, sometimes even before a sale is made. You’ll be able to create, nurture and deepen relationships with relevant, high-value information catered to the buyer persona
  • Higher Retention Rate. You need customers to be sticky, returning time and again to your brand for the products and services they need. With stronger relationships, driven by relevant information and engagements, you’ll garner better customer retention rates. The ROI on your marketing will skyrocket given customers with longer lifetime values for your brand, too

Challenges of Demand Generation

Every marketing strategy comes with inherent challenges. Demand generation is no exception. Among the challenges (all surmountable) are:

  • Building an Audience. Every marketing campaign and every brand needs to start somewhere. With demand marketing, one challenge is to build an audience. Once you’ve created the campaign and the content, you need to send it to someone. Building an audience can take time, and leveraging social media to re-engage existing customers and attract new ones is necessary when starting out.
  • Developing the Content. In order to be effective, demand generation campaigns need good, quality content. Finding the right creators for content marketing can be a challenge. However, there are many freelance options that can help you find people. Creating blogs, social posts, graphics, emails, and other creatives is possible but may take time
  • Budget Constraints. Budget challenges are a part of any business and you may be wrestling with how to manage limited marketing resources. You have a couple of options. Start with hiring some in-house talent for basic demand generation. Or hire an outside agency to do the work for you. You may also choose a hybrid approach, with an internal marketer handling some demand gen work
  • Aligning Sales and Marketing. Sales and marketing are inextricably linked. Unfortunately, some organizations have misaligned departments, with the two operating in silos. A shared understanding of needs, goals, and priorities can help strengthen the relations and deliver better results
  • Turning Leads into Customers. Demand generation is about identifying opportunities. Converting those leads and relationships into sales is critical. It’s why there needs to be a strategy for what to do with engagements that result from customer demand generation work

How to Create and Implement a Demand Generation Strategy

It can be daunting to think about where to start with your demand generation strategy. Here are the key steps to take.

Define Your Target Audience

Your target audience is a specific group of customers who are most likely to purchase your product or service. That makes them the best groups to focus on ad campaigns.

You can develop your target audience based on various criteria, including:

  • Interests, such as hobbies, entertainment preferences, political beliefs, or identifying traits
  • Subcultures, defined as people with the same shared experience, such as race, gender, religion
  • Intent to Purchase, such as those customers with the same pain points, needs, inclinations, or interests in your product or service

Developing your target audience starts with analyzing your customer base. You can conduct focus groups or surveys and identify patterns among those who have or are likely to purchase.

Correlate those insights with market research and competitive analysis. You will soon get a clearer understanding of who your customers are and should be.

Creating Your Buyer’s Journey – Buyer Persona

Buyer personas force you to develop a profile for each target audience. They include the demographics, personalities, characteristics, and needs of each audience. Personas should be data-informed, based on insights gleaned from data, surveys, and analysis.

Set a Goal

What do you want to achieve with your demand gen campaign? Start by developing goals that are measurable and related to the following factors:

  • Customer Insights. You’ve researched your customers and developed your target audience. Your goals should reflect the audiences, whether you’re looking for more conversions, more visitors, more downloads, more reviews, or more revenue
  • Budget. Your goal needs to be achievable within your budget constraints and the resources (personnel and dollars) available
  • Tracking. How will you measure the impact of your demand generation work? Your goal needs to be capable of being tracked and measured

Create Your Content Strategy

Demand generation often is a content-heavy approach. Your content strategy will depend largely on “where” you and your likely customers are on the buyer funnel.

At the top of the funnel, you’re looking to garner interest and create a powerful brand identity. Blogs, videos, white papers, eBooks, and rich on-page content are important components here.

Free tools, giveaways, free trials, and samples are other tactics that can effectively drive customers deeper into the funnel.

Nurture the Leads You’ve Gathered

Demand gen is about finding more and better leads. Nurturing those leads is essential for success. That means coordinated work between your sales, marketing, and customer service teams.

The middle of the funnel lends itself to programs that nurture the relationship. For example, you may ask potential customers to sign up for your mailing list. These contacts can receive a sequenced cadence of emails that invite them to learn more, visit your site or take advantage of sales and coupons.

At the bottom of the funnel, you want to continue to personalize. Offer deeper insights into case studies or personal assistance via your help desk to assist customers who are ready to buy.

Measure the Success of Your Demand Gen Strategy

Measurements are so important. You’ll need systems that can track your campaigns, tagging customers to specific approaches and tactics.

Measuring your success often takes time. You’ll want to have multiple campaigns to compare before deciding how to adjust, affirm or enhance your campaign strategies.

Tools for a Successful Demand Generation Strategy

There are many tools you can use to develop and measure the impact of a demand gen strategy. Here are a few of the tools you may consider:

  • Website Analytics. Who is visiting your website? What pages do they visit? Understanding your traffic, where it comes from, and where it goes is incredibly valuable
  • LinkedIn. Looking to find people and companies that are ideal for building your customer base? LinkedIn Sales Navigator is a powerful way to find companies, employees, and contact information
  • Automation Tools. Use automation tools to create, schedule, and manage your demand gen content, from social media to blogs to emails
  • A/B Testing. If you’re looking to test different messages, using A/B testing tools lets you segment, test, and evaluate
  • CRM. Your customer relationship management (CRM) tool needs to play a pivotal role in your demand generation strategy. From contacts to responses to engagements, the CRM can track every critical connection with your customers

How to Measure Success in Your Demand Generation Strategy

How will you define success for your demand gen strategy? There are multiple ways to measure the impact and efficacy.

The Best KPIs for Your Demand Generation Strategy

Here are a few of the best measures to use:

  • Overall Traffic and Organic Traffic to your website
  • Net-New Revenue. This measure is defined as revenue generated by a marketing strategy. This measure indicates what percentage of your overall revenue comes from demand generation (versus sales or channel partners)
  • Marketing Qualified Lead (MQL). This metric shows what leads are brought in by the demand generation marketing campaigns. Another good metric is the percentage of overall leads developed via demand gen
  • Sales Qualified Opportunity (SQO). This is a qualified prospect who has a high probability of becoming a customer. An opportunity should have a pain point your product or service can solve and an interest in the offering.
  • Win Rate. This measure is the ratio of opportunities won divided by total opportunities
  • Customer Acquisition Cost (CAC). This KPI shows the cost of gaining a new customer. It’s calculated by taking the cost of your marketing work and dividing it by the opportunities won

Tools for Measuring Demand Generation ROI

Longitudinal insights into your demand gen work can help develop success measures and make the case for additional investments in marketing work. Lead attribution is essential for tracking your progress and making a course adjustment.

Consider the following tools for helping to measure demand generation ROI:

  • Marketing Analyzers. Use these tools to track the impact of your marketing across your website. They let you track individuals or groups anonymously and measure ROI on customers coming from different platforms
  • Google Analytics. Google offers free tools that show where traffic comes from and where visitors go on your site
  • Customer Lifetime Value Calculators. These customizable free tools help you define and calculate the lifetime value of your customers
  • Content Sharing Trackers. These tools measure how your content is shared across social channels

High-Value Marketing Based on Relationships

Demand generation is both science and art. It takes some rigorous research to identify your customers and their needs. You’ll also need to experiment with personas, content, and messaging before you hit on the winning approach.

The science of demand gen is based on the impact of a data-driven approach. Instead of acting on instinct, a demand generation strategy uses informed, proven approaches. As a result, your business has better leads, more conversions, and more success.

Blog Post

Growth

Demand Generation

Blog Post

How To Leverage Growth Marketing

How To Leverage Growth Marketing

Traditional marketing is where brands broadcast a one-size-fits-all marketing message describing the product’s features. It is expensive, broad, and doesn’t consider the unique requirements of the customer.

This doesn’t work well for budding businesses that are targeting a particular niche and have a limited marketing budget.

Enter growth marketing

Growth marketing focuses on sending personalized customer-centric messages to the target audience explaining how the product will give them the value they are looking for.

In this article, you’ll learn what makes growth marketing unique, its strategy and characteristics, and how you can leverage it.

Growth Marketing Vs. Regular Marketing

Growth marketing attracts prospects, keeps them hooked, and turns them into loyal buyers. With techniques such as content marketing and lead nurturing, customers are nudged through the funnel until they make a purchase. 

Various marketing channels are auto-optimized through the latest tools and data-backed processes for sustainable growth. The primary advantage of growth marketing is that it nurtures customer relationships and increases your average customer lifetime value.

Traditional marketing approaches include ideation of marketing operations, publishing the ad copy and design, implementing Call-To-Actions (CTAs), outlining the ad spend for the campaign, and so on. 

All these efforts follow a traditional “set it and forget it” strategy. This strategy is great for increasing brand awareness by focusing on the top of the sales funnel.

The image below highlights the difference between traditional and growth marketing.

Source: Mondial Trends. A graphic showing the differences between traditional and growth marketing.

What a Growth Marketing Strategy Includes

Market Penetration

Growth marketers exclusively focus on the niche where you offer products/services or look for potential customers in your competitors' niche to penetrate the market better.

This growth hacking technique pushes brands to look for differentiators. Here, growth marketers answer two specific questions:

  1. What sets you apart from your competition?
  2. What are the specific areas you are better than your rivals?

Strategic Collaborations and Partnerships

Growth marketing teams facilitate rapid growth by finding and teaming up with other brands that offer products your target audience uses — for instance, telecom providers partnering with smartphone manufacturers.

Apart from keeping customer acquisition costs low, this strategy could get you lots of new customers and result in sustainable growth. Sometimes, you might have to create new products or services to form a partnership.

Market Development

This strategy involves running growth marketing campaigns where you advertise the products or services to new markets to facilitate demand generation. It is done in two ways:

  1. Targeting new niches and buyer personas.
  2. Moving to new geographic regions.

Product Development

Your product development growth strategy has to be tailored to your brand’s specific needs. To attain rapid growth, you should diversify your marketing efforts to find creative solutions in the following ways:

  • Product Updates. Build on what you have (this is also great for customer retention). 
  • New Products. A great way to enter new markets and target different user personas.

Characteristics of a Growth Marketing Strategy

Data-driven

Before growth marketers invest in a new marketing tactic aiming for rapid growth, the idea has to be backed by data. As growth marketing tactics involve taking risks, intuitions and “do this because competitors are too” have no place.

Read: “How to Create a Successful Growth Marketing Strategy.”

Product Focused

Your business needs to consistently improve its product to remain competitive in the market. Whether it is adding more features or functionalities, your product needs to evolve with the changing needs of your target audience. 

Growth marketing facilitates this by collecting data that can guide this product development and keep your target audience updated about the values you offer.

Limited fear of failure

Apart from being data-driven, the high success rate of growth marketing can be attributed to the diversification of efforts. With multiple marketing strategies at play at once, the best growth marketers keep a close eye on the numbers and scale up the efforts that have the highest marketing ROI.

Storytelling

Considering our endless appetites for stories, growth marketers use a story where a person with similar problems to the target audience gets their problem solved with their product. This makes the brand’s message more realistic and relatable, motivating more prospects to make a purchase.

Retargeting

Retargeting reminds your website visitors, prospects, leads, and customers about the value your product offers. This also keeps the customer acquisition costs low.

Should You Hire a Growth Hacker or Outsource Growth Marketing to an Agency?

Having an in-house growth marketer has the following pros:

  1. They will be familiar with your product and processes completely.
  2. 100% dedication towards your brand growth.
  3. You can gain a lot of insights into your industry.

However, it is challenging for the following reasons:

  1. It's expensive to hire new professionals, get new tools, and set up new growth marketing strategies.
  2. After some time, they could run out of ideas by falling into a "creative rut".
  3. You still have to pay your growth marketing team even if you pause your strategy. 

Growing brands with a limited budget risk a lot in this scenario.

In these instances, outsourcing growth marketing to an established agency such as Matter Made is ideal because:

  1. You get experienced, accountable professionals.
  2. It’s cost-efficient; pay until you are leveraging their services.
  3. You will be kept in the loop at every stage through timely reports.
  4. You can reinvest the saved resources elsewhere.
  5. You get expertise from successful growth marketers. 

Growth Hacking, Demand Generation, and Matter Made

Matter Made has helped product-led companies like Dropbox and Loom achieve hypergrowth through demand generation, product-led growth, and bespoke growth strategies

Our seasoned marketing team can help your brand achieve similar results.

Interested in knowing what a growth marketing strategy brings to the table for your brand? Let’s talk.

Software-as-a-Service (SaaS) is a software delivery method where the solution is owned and managed by a company, hosted on a cloud that a third party provides, and delivered to customers on a subscription basis via the internet.

This article will help you understand the fundamentals of the SaaS business model, including its strengths and weaknesses.

The Four Pillars of The SaaS Business Model

1. Centralized Ownership

The Application Service Providers (ASPs) retain ownership over and maintain the SaaS product. Instead of permanent licenses, they sell the solution via subscriptions and provide everything else their customers require, such as support and maintenance.

This helps with keeping costs low and enables companies with limited budgets to adopt newer technologies.

2. Cloud-based Hosting

Most SaaS companies use cloud hosting solutions such as AWS, Microsoft Azure, and GCP to deploy their applications. This makes it easier for them to scale fast while retaining the quality of performance when it comes to delivering the promised value to their customers.

Generally, SaaS platform developers use microservice architecture, which keeps costs lower and makes the solution easy to operate, modify, upgrade, and maintain.

3. The Subscription Pricing Model

As we briefly touched upon earlier in this article, SaaS companies bill their customers periodically (weekly, monthly, or annually). This subscription-based pricing renews customer access to the solution at a specified service level.

The nature of the tiered pricing model varies from company to company. For instance, some SaaS solutions charge based on features used, while others charge based on the number of users.

4. Internet-based Delivery 

Customers have web access to SaaS products through their local machines. However, the data is stored and processed on servers of the cloud hosting solution used by the SaaS company, usually located elsewhere.

This cost-effective, scalable, and versatile approach helps SaaS companies adapt with time while continuing to deliver world-class services to their existing customers.

SaaS vs. PaaS. vs. IaaS

SaaS

SaaS (Software-as-a-Service) utilizes cloud hosting solutions managed by third parties to host software. Businesses then use the internet to deliver it to their target audience. The advantage of the SaaS application is that it can be accessed via a web browser, making its adoption simple.

Examples of popular SaaS applications include G Suite, Dropbox, and Slack.

PaaS

PaaS (Platform-as-a-Service) delivers a framework for developers that is used to build applications. The servers for storage, processing, and networking of data centers are managed by third-party service providers — also known as Cloud Platform Services (CPS).

AWS Elastic Beanstalk, Windows Azure, and Heroku are some of the most prominent PaaS solutions.

IaaS

IaaS (Infrastructure-as-a-Service) helps its users to monitor and maintain their IT infrastructure while giving them the freedom to scale up or out as per their requirements. IaaS keeps hardware costs low.

Google Compute Engine (GCE), Microsoft Azure, and DigitalOcean are some examples of IaaS solutions.

Source: BMC. Differences between IaaS, PaaS, and SaaS

Strengths of the SaaS Business Model

Scalable Solution

As the SaaS solution is hosted on the cloud, there are no limits on how many customers a SaaS company can serve. Furthermore, selling the solution in every country is possible, provided the legal requirements are taken care of.

The cloud hosting solution in use will take care of the new storage and processing requirements while accommodating new users in real-time.

Easily Accessible

In the olden days, customers had to purchase enterprise software, upgrade their local machine to match the recommended specifications of the software, and install it before they could start getting any value. 

Now, all they need is a computer with a stable internet connection and a license to a cloud-based tool.

Automatic Updates

SaaS solutions have made the “software update” button and waiting for it to complete before starting your work obsolete. SaaS vendors deploy new updates on the cloud, and they will be reflected in real-time on customers’ devices.

Customization and Customer Relationship Management

SaaS Providers can create multiple pricing plans to target customers of different requirements in the same or similar domains. This assists them in having a wider potential customer base while delivering economical and personalized solutions to each of them. 

Predictable Costs

The pay-as-you-use linear pricing model makes it easier for SaaS businesses to predict how much working capital is required to hit the SaaS market. This makes it easier to maintain finances and scale up in the future, as well as increase the platform's average customer lifetime value.

Weaknesses of the SaaS Business Model

Cybersecurity

It is challenging for both the business and their users to store their sensitive data on third-party servers. It is crucial for businesses to carefully go through the privacy policies before choosing a cloud hosting solution.

Longer Sales Cycle and a High Customer Acquisition Cost

The journey that transforms a prospect into a paying customer is quite long. SaaS businesses often have to spend a lot on marketing strategies for the entire sales funnel to ensure it resonates with the audience. 

High Competition

The strengths of the SaaS model make it easier to develop such a solution even with a strict budget. Due to this, every domain in the SaaS industry has a lot of players, big and small.

eCommerce, SaaS, and Matter Made

The SaaS business model is scalable, accessible, affordable, and easy to maintain. These advantages make it a great opportunity but also make it competitive at the same time.

The one thing that will set a SaaS brand apart from its competition is its marketing strategy — as it will relay its value to its target audience, motivating them to sign up for a trial.

Matter Made helps SaaS platforms achieve this objective through a strategic blend of demand generation, decision-maker marketing, paid media, and product-led growth.

Interested?

Schedule a chat with us today.

Ready to drive efficient demand?

LET’S TALK
© 2022
Sign up for our email newsletter to receive the latest marketing insights and news.