COVID-19 is having a significant impact on SaaS businesses. We will likely see longer sales cycles, lower intent to buy, lower willingness to pay, higher churn. We will likely also see the pool of new customers shrink as more companies are controlling costs, and the pool of existing customers shrink as more companies go out of business.
How would SaaS growth marketing change in the time of COVID-19?
First, digital channels will gain increasing importance. With offline channels such as Out Of Home advertising and in-person conferences become less impactful, digital channels will garner a greater percentage of the remaining marketing budget. People will spend more time on channels such as Google, Facebook, Linkedin, attending virtual events and webinars, research on industry websites, and read blogs and newsletters.
Second, there will be lower competition but acquisition costs may not go down. Across the board we see a slowdown in advertising spend, so the cost per impression and clicks will decrease due to less competition. People are spending more time on upfront research but are also more cautious with spending, hence the conversion rate will likely be lower for most categories (different story if you’re in online collaboration and remote work), so the overall cost per acquisition may not go down.
Third, the loss of IP identification requires a change of personalization strategies. Many SaaS companies use IP to identify where web traffic comes from, and dynamically change landing pages and ad creatives and copies to target prospects from a particular company, aiming at increasing conversion rates, a key component in ABM strategies and personalization strategies. However, more people are and will continue to be working from home on home wifi. Technologies that use IP identification to understand which company the visitors work at will face the challenge of lower match rates. Personal-identifiable signals such as email, cookie, and logged-in accounts will be more important to determine the visitor identity, but these signals typically command higher costs. Companies need to derive a strategy to counter the impact of losing this IP identification on the company level, invest in identification on the user level, and at the same time also be aware of potential backlash of personal-identifiable targeting.
What strategies can SaaS growth marketers adopt in this changing reality?
First, review marketing budget allocation and make swift changes. If your business is experiencing a significant negative impact by COVID-19, pause the advertising spend. If your business is not impacted by COVID-19 and you have a large cash reserve, adjust your advertising spend to focus on digital channels and pause offline channels such as Out Of Home at physical locations like transportation hubs and billboards. If your business is experiencing increased demand, increase digital spend within your CPA and payback window, while consider taking advantage of the lower cost of brand channels such as video, podcast, streaming audio, and OTT to quickly capture market share. At the same time, put more effort into organic channels such as SEO, content marketing, organic social, PR, and think about ways to help the community in a genuine way and be part of the conversation and solution.
Second, work closely with your sales team to support upper-funnel and mid-funnel efforts and adopt multi-touch attribution. The good news is that people are spending more time online to do research. They’re more open and engaged with thought-leadership content. This is the time to build interest and trust. Once the market turns around, you are more likely to capture the pent-up demand. The flip side is that if you are using a last-touch attribution model, it is tough to measure the impact of these activities on the eventual conversions. Companies should consider adopting a multi-touch attribution model with a proper attribution window to measure the true impact of full-funnel marketing efforts if haven’t done so.
Third, consider investing in data solutions that connect B2B and B2C identities. Currently, data solutions that offer cookie-based or work-email-based user-level identification for B2B customers are generally separate from B2C datasets. More SaaS companies will need a better data solution to connect personal emails with work emails, multiple work and personal desktop and mobile devices, and cookies from personal browser and work browser in order to effectively target B2B buyers outside of company IP targeting.
In summary, digital marketing will become increasingly more important in B2B SaaS growth marketing strategies in the age of COVID-19. The impact will likely last long after as more companies realize the effectiveness of digital marketing. The sophistication of digital marketing is the key to win in the long term.