Dear SaaS, Traditional Marketing is Dead; Long Live Contextual Growth Marketing

Traditional Marketing is obsolete and doesn’t work for product-led growth (PLG) SaaS products. Marketing, including AI email automation, is all about contextual growth marketing now.

Why is traditional marketing not relevant anymore?

Most traditional marketing looks at buying as a one-time event. Traditionally software license sales were usually one-time occurrences, with the chance to renew annually and in some cases 3 or 5 years. Marketing was all about product value articulation and about getting the message to a target audience repetitively to etch the brand recall, so come buying time, the brand with the most recall wins.

Self-serve SaaS changed all that. The business paradigm was a huge revolution. The mode of selling changed from sales-driven to “try before you buy” even for B2B. To borrow analogies from the automotive industry, SaaS officially adopted the “Test Drive” or “Free trial” methodology. Unlike car buying, you could stop being a customer instantly, and there were no fees.

The test drive also meant the rise of self-serve or assisted self-serve models of acquisition and conversion. Self-serve models don’t have to go through a painstaking decision process as there’s no fear of lock-in. There’s no pressure, and they could do this without the involvement of sales at times.

The test drive is both a boon and a curse of the self-serve SaaS business model. It also meant that the product was constantly being evaluated by the customer, and the trigger point of buy could occur upon value realization i.e “activation”. So, product value articulation has to be continuous and part of the product. This also meant the traditional marketing funnel was invalid, and a new marketing funnel was alive. Acquisition, activation, monetization, upsell, retention, and churn prevention have replaced the old funnel of awareness, interest, desire, and action.

It is not enough that the customer is acquired or does a free trial. He also needs to move up the value chain of your revenue and continue to stay engaged and satisfied. All of this is not possible if you employ traditional marketing methods.

In short, PLG SaaS marketing is not a customer acquisition problem but a state change problem that is now the domain of not only marketing but also growth and sales and customer success teams.

Marketing is no longer a siloed single-dimensional concept. It now means grow and retain, articulate value, upsell when needed, learn about customer value triggers, understand his problems (customer success area) and continue to see his resonance to product messaging. So marketing in product-led growth companies has evolved. This paradigm is contextual to the product and customer’s stage in the product life cycle.

The massive challenge is that these teams are a combination of product growth managers, data analysts, marketers, and sales. This is a unique composition of talents, and the current tools and tech just do not cater to this challenge.

Why and where do PLG SaaS marketing and growth teams fail today?

Most failures occur in the very first stage of “free trial”. Best-case scenarios of successful companies like Dropbox and Asana only have a free trial to paid conversion of about 3-5%. Let’s look at some massive inefficiencies of today’s SaaS marketing and how marketers struggle to move the needle. All efforts go to a huge waste just at the top of the new SaaS funnel. Additionally, if the customer does get past the initial hurdle, more failures occur in the later stages. Churn in such cases is most assuredly a foregone conclusion.

The reasons through post-mortem look simple and, with the benefit of hindsight, look super solvable. So here are some findings of a failed SaaS campaigns:

• The email campaign had a low open rate as the subject lines didn’t resonate

• Paid subscription offers were sent to customers without proper email marketing segmentation, i.e. without checking if they were free trial users. Issues are product usage data not being available to the marketer

• Customer lost interest in the salesperson as they lacked the customer intelligence

• Offers were sent when they were most concerned about solving product issues

• Customers’ various chats on the site were ignored, and marketing still sent the usual marketing messages

Most of these factors mentioned are easily avoidable if the marketing team had product data, the product team had the marketing data, and the sales team was aware of the previous marketing messages and current product state. The functional demarcation of the job sometimes even hides customer service issues from marketing. While that made sense in the old order, growth teams are across areas of marketing, sales, product, and customer success. Small and low mid-size businesses have still not entrenched this setup.

With this background, Glance is setting out to contextualize growth and marketing efforts to the SaaS lifecycle in product-led growth companies. We consciously recognize there’s a hybrid model where sales teams assist self-serve product-led growth in addition to growth and marketing teams, to which we will extend the product.

As we wrote in our post, The New Dawn, self-serve PLG – where email campaigns are key and are our beachhead use case. Here are some differentiating highlights as we are rolling out the product into customers’ hands.

• All campaigns in the Product-Led Growth and SaaS context, including trial, convert-to-paid, upgrade, retention, and churn prevention, are organized by goals.
• With the help of AI-graph, leverage multi-channel data including product analytics, billing, email, chat, customer success to identify hyper-segments that are more likely to convert and contextual to the customer lifecycle state. This is not just a product-qualified lead (PQL) but much more than that.

• After identifying the hyper-segment, our content suggestion and schedule create the undeniable formula for campaign success.

• Next comes the best delivery channels of this value, such as contextually determined email platforms, CRM, and sales tools.

• We also show outcomes of suggested campaigns without which the value delivered remains questionable for a PLG company like Glance.

As a first step to doing this, we’ve launched an email funnel software focusing on email growth marketing. Sign-up for a free 30-day trial.