6 SaaS Trends Software Marketers Can't Ignore
SaaS is a quickly growing field, constantly changing and evolving. As a result, that presents a host of challenges for marketers in the space.
Predicted to grow at a CAGR of 21.20% through 2023, SaaS is packed with opportunities. To reap the rewards, however, marketers will need to adapt to the constantly changing trends. In an industry that exists on the cutting edge of tech, being seen as behind the curve isn’t an option.
In this article, we’ll cover the main SaaS industry trends right now and what marketers can do to stay in tune with them.
1. Spending and Vertical Expansion
In 2018, the average company spent $343k on SaaS, a 78% increase from the year before. Spending was up across all company segments, and expansion tended to move vertically rather than horizontally. This reflects a trend where SaaS companies are aiming to focus on dominating their own specific niches and expanding less into new areas.
For marketers, this is an important takeaway, since it shows a significant new direction in the market. Not only is important to be aware of what other SaaS companies are doing, but as you focus on increasing sales, know that companies are willing to spend on software and determine which niches your company is focusing on, if you haven’t already.
2. Artificial Intelligence (AI)
Artificial Intelligence is the phrase on everyone’s lips. According to Gartner analysts, in just two years 30% of all B2B companies globally will use AI to augment at least one of their primary sales processes.
For those working in the SaaS space — and indeed the marketing space — this won’t be a surprise. It’s already a key feature of many SaaS businesses like auditing software Appzen, the second fastest growing SaaS company.
It isn’t just AI-based SaaS platforms that can benefit from more automation and machine learning, though. Other uses of the technology include:
- Building an AI chatbot into your SaaS site can help provide basic customer service and answer common questions around the clock, taking the strain off staff and providing users with a better experience.
- Predictive analytics. Today, we’re surrounded by more data than ever, and SaaS companies are on the receiving end of a wealth of valuable information. AI can analyze this data and make predictions to help tweak and optimize your company’s marketing processes.
- With SaaS, people have come to expect a certain degree of customization and user-friendliness. AI is a powerful tool here, allowing platforms to tailor the experience to each individual customer and build solid relationships.
These are all powerful tools for marketers if used correctly. In addition, you should be focusing on AI and showing potential customers the value it can bring to your service every chance you get. Failing to use, highlight, and promote this technology is missing a huge opportunity.
3. The Free Model is Everywhere
Offering freebies is a staple of SaaS. In fact, 61% of SaaS companies offer some iteration of the free model. That includes trials, freemium models, and limited free versions.
This allows customers to try the service before they pay anything, removing friction and guiding them gently toward a decision. There are also many advantages to the free model which apply directly to marketers. Let’s explore some of those:
- You can reach more buyers. Free trials allow you to get more intimate with your customers, building a relationship and showing them what you can deliver.
- You get valuable feedback. In return for the free use of your software, you can ask users to give feedback and tips on how to improve. This is a great way to get thousands of extra pairs of eyes on your platform and gather a broad set of opinions to help you improve and grow.
- You gain a ton of qualified leads. After using your platform for the duration of a trial, your leads are as qualified as ever. At this point they’re fully aware of what your software can do, they trust your service and product, and they have all the information they need to make a buying decision.
- Conversion rates are impressive. Free trials in the SaaS space tend to yield a 15-25% conversion rate, and the best trials can even result in a staggering 60%.
The free model is perfectly suited to SaaS, and it’s something all SaaS marketers should consider.
4. New Pricing Strategies and Payment Models
Of the companies that did change their pricing, two in five reported a 25% increase in their ARR, signaling an enormous benefit to the bottom line. In addition to this, only 2% said their ARR decreased after making a pricing change.
This shows that updating your pricing model is rarely a bad idea, and usually yields significant growth. There are many types of pricing options for SaaS companies, from ongoing subscriptions to pay-per-use models.
It’s not a one-size-fits-all system, and you’ll need to do your own research to find out the best pricing model for your service.
5. Customer Approach is Changing
SaaS customers are changing the way they think about their customers. Here’s an eye-catching statistic: research shows that 80% of future SaaS revenue will come from just 20% of existing customers. That means the focus has shifted to not just attracting and converting leads, but also to retaining them.
As a marketer, you want to retain customers as much as possible. Constantly needing to find new customers is a huge drain on resources, and it’s far easier to focus on delighting the ones you already have and building lasting relationships with them.
One way to reduce churn is by prioritizing customer success. You should want to make things as easy and rewarding as possible for your users, and a good way to do this is by being available to walk them through the process of using your software whenever needed.
That means lots of ongoing education and support, continuing to deliver value long after they’ve become a paying customer.
This might require a shift in mindset, away from traditional funnel-based marketing to a more all-encompassing and ongoing approach. HubSpot’s recent flywheel approach is built around this idea.
6. Don’t Forget Mobile
The number of mobile users worldwide has been steadily increasing year over year. It’s almost unheard of now for someone to be without a smartphone, and they’re one of the primary portals through which we access the digital world.
When it comes to SaaS, mobile functionality needs to be center stage and is being treated that way by the big players in the space. Marketers need to show their potential buyers that software will work smoothly on a phone as well as a laptop. Make this a key part of the marketing process, and don’t let your prospects forget it.
The SaaS industry is not just about promoting and advertising your service, but also involves educating and informing your users to help them get the most out of the software and stick around. Paying attention to current SaaS industry trends and best practices is a great way to ensure your company and marketing will stay relevant for customers and future customers.