Creativity Will Separate Leaders from Laggards as Demand for SaaS Plateaus in 2023 -- Greg Latson
Buoyed by the COVID-induced shelter-in-place workforce, the software as a service (SaaS) market has enjoyed a surge in demand over the past two years. However, despite the fact that global enterprise spending on SaaS grew from $146 billion in 2021 to reach a projected $195 billion by 2023, there is no shortage of providers competing for a piece of that pie, according to marketing enthusiast -- and SaaS marketing guide -- Greg Latson.
“In the United States there are somewhere in the neighborhood of 17,000 SaaS providers, with new entrants making their debut almost every single day, prompting emerging and established SaaS leaders to reevaluate their go-to-market strategies and the role that effective marketing will play in ensuring sustained success…especially as we move into a more difficult business and economic landscape,” says Latson.
The marketplace, he notes, has evolved quickly becoming a mainstream feature for organizations of all sizes that are looking for technology tools to address an array of business issues — from human resource and customer relationship management to security and even niche industry-specific issues.
The reason is simple: SaaS services are extremely easy to access and consume.
“In fact, some CFOs may think it is too easy. All you need is a credit card, user name and password and you are off to the races. But this is also where the challenge lies. The same features that make SaaS so accessible also mean that the barriers to entry are relatively low. As a result, the SaaS market is a crowded one, which makes it hard for smaller and newer SaaS providers to stand out,” Latson says.
Too many emerging SaaS providers apply the same go-to-market playbook as their predecessors.
“There is way too much commonality in SaaS marketing. This makes it very difficult for potential customers to differentiate between companies. It creates a branding problem. The market is far too competitive today for a templated approach to marketing to be successful,” he says.
The solution is to go back to basics and remember that — in the final analysis — SaaS offerings must be treated like any other product or service. The most important investment first step is truly understanding the challenges that require solutions, and then create a compelling story — and journey — for specific target audiences.
“Once a business has done its due diligence to understand its product or service offerings -- and has honed in on its target audience -- SaaS marketers will be in a much better position to strengthen their business development efforts,” says Latson.
Setting the Metrics that Matter
Given the web-based nature of SaaS operations, it is easy for marketers to get lost in the deluge of data that is generated by user activity and infrastructure telemetry. Focus, according to Latson, is the key.
“The strategic metrics I believe are the most important for growth and sustained success are customer retention, churn rate, and overall market share. These three metrics will provide a very good sense of how a SaaS business is doing competitively,” he suggests.
“Another great metric is brand awareness because it illustrates how well target audience knows your brand and how they compare it to your competitors. And finally, the last metrics are, of course, mentions and reviews. These are imperative to understanding how your brand and your products perform and can be a great tool for the sales and marketing teams to track,” concludes Latson.
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Editor’s Note: To listen to the full podcast interview with Greg Latson, CLICK HERE.