The foundations of SaaS companies are their customers. These customers have to come from somewhere.

Wherever they come from, they start their journey in SaaS companies as contacts in a list. Yes, lists are the origin points of a customer in a SaaS business. Lists are sacrosanct entities that are worshipped and are used to primarily drive what we call MQLs or the layman definition of marketing qualified leads.

Contact lists, however hallowed or sacrosanct, seem to be usually super inefficient. I say inefficient as in most cases, the overall industry average doesn’t exceed 22% (email benchmark from Mailchimp in comments). If you’re being generous, you can say 30%, and that’s still super low.

The important question to ask is why is it so low? Why is it so normal to accept the performance to be so low? Let me just say this, if your software, e.g. a word processor, worked only 30% of the time, would you be ok? So why then are we ok to pay the full price for the effectiveness of 30%?

The fault doesn’t lie in the b2b email marketing software, as it most likely delivers email most of the time (95% or more). However, the software tools lack the context of your user journey. It’s a task-doer and it counts on you to have the context and set it right. The other tools that the email software provides are complex workflows and decision trees that are not always intuitive and don’t match your business context.

When you lack business context, the emails are going to be generic or based on some email marketing segmentation you devise. This most likely doesn’t work well and doesn’t serve any purpose. The overall results are an abysmal performance of email campaigns in general. In these days of micro-targeting and self-driven cars, we have email campaigns that are largely sprayed-and-pray campaigns.

One other important factor is that you are unable to distinguish valuable users from those who are just emails in your list. One of the reasons why this happens is because the lists have email addresses and not enough context. The context, which could be product usage, site visit, or any relevant metrics, is siloed and not easily accessible to the marketer.

It’s critical that your software has the same context as your SaaS business. SaaS users broadly can be classified as “free”, “paid”, “ready to upgrade”, “retention” and “churn risk” users. This very context determines the relationship they can have with your business. Emailing them with this context will see better open rates. When we did these experiments with our pilot customers, we saw the average open rate reach as high as 67%.

I think it’s time SaaS marketers moved away from building lists of fear and build lists of hope, more effective behavioral email segmentation lists that are fine-tuned to your business. If you’re a SaaS marketer and would like to know more, don’t hesitate to reach out to me.

Note: This post was originally published on Linkedin
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