For enterprise SaaS companies, your conversion funnel is not only a marker of your marketing and sales teams’ success but a powerful mechanism that fuels the growth of your business. In order to successfully generate more leads that convert to closed/won sales deals, you need to analyze your SaaS conversion funnel to identify areas for improvement and optimize them accordingly.
Let’s explore the ins and out of the SaaS conversion funnel and 3 ways you can optimize it.
Traditionally, a conversion funnel has four stages: awareness, interest, consideration, and conversion. The enterprise SaaS conversion funnel features an additional fifth phase, retention, which focuses on generating recurring revenue and reducing customer churn.
Let’s explore what each of these 5 stages looks like.
1. Awareness: In the first stage of the funnel, a prospect has identified a problem and begins researching potential solutions.
2. Interest: Now that the prospect has found some viable options to solve their problem (aka your product or service!), they are looking to learn more about these solutions. This means they’re likely consuming content on your site such as blog posts, webinars, and eBooks.
3. Consideration: After learning more about your solution, the prospect is ready to see it in action and requests a demo.
4. Conversion: The prospect has now weighed all of their options, secured buy-in from stakeholders, and is ready to convert into a paying customer.
5. Retention: Finally, your new customer has signed on and will shift from working with your sales team to your account management and customer success teams who should help with everything from onboarding to quarterly reviews to make sure the customer is still delighted and planning to renew.
Now that you understand the 5 distinct stages of the SaaS conversion funnel, take a look at your own funnel and calculate the conversion rates between each stage. To find a conversion rate, simply divide the number of leads in one stage by the number of leads in the previous stage—for example, if you have 6,000 leads in the Awareness stage and 600 move on to the Interest stage, your conversion rate is 10%. Once you determine your current conversion rates, set a goal for where you want them to be, and then continually aim to improve them each quarter.
With your new conversion rate goals in mind, you’re ready to take action and begin optimizing your SaaS conversion funnel. Here are 3 tips to consider as you get started:
1. Map out the customer journey. Since the SaaS buyer journey is a lengthy process and varies from customer to customer, it is critical to look beyond the average conversion rates between each funnel stage and map out the customer journey. A customer journey map should represent all relevant touchpoints, from initial marketing touches to sales calls and onboarding. Looking at all of these touchpoints and taking the journey for yourself can help you identify key obstacles and pain points that you can later optimize. Read this blog post for step-by-step tips to build your own customer journey map.
2. Prioritize customer retention. While many businesses tend to focus their efforts on acquiring new customers, it’s important to remember the impact that higher customer retention has on your business—just a 5% increase in customer retention can increase company revenue by 25-95%. Aside from providing a thorough onboarding experience and making sure new customers have the training they need to actually benefit from your solution, hold regular check-in meetings to ensure things are going smoothly and that they’re seeing results. You should also regularly survey your customers about what your solution might be missing. Are there any features that can be improved or added? This can go a long way for customer satisfaction and will help to prioritize your roadmap.
3. Personalize your website. Many (if not all) of your touchpoints throughout the customer journey will drive prospects to your website, which is why website personalization is essential for reducing friction and getting them to the next funnel stage. Whether a prospect is arriving to your site for the first time or has visited it many times over, recognizing their needs and interests will show them that your solution is indeed the right fit for them. In earlier funnel stages, try personalizing headlines, CTAs, and social proof to reflect the prospect’s job title, industry, and metrics they care about. For prospects further down in the funnel, welcome them back to your site and allow them to pick up where they left off or recommend a new piece of content based on what they’ve previously viewed. Creating a highly personalized experience will help your prospect feel less like a cog in the machine and more like a valued future customer.
Having a strong understanding of your SaaS conversion funnel is key to improving the customer experience, driving more conversions, and increasing customer retention.
For even more tips to optimize the SaaS conversion funnel, check out these articles: