For software-as-a-service (SaaS) products, Google AdWords can often seem like a dream come true.
You can advertise the exact keywords that your perfect customers use when they’re looking for the very solution that your software provides.
You don’t even have to ask designers for ads. You can just write up some text ads, and the leads will start pouring in.
But first, a caveat – If you’ve ever tried out AdWords, you might have found that it was a costly exercise that resulted in little more than a large check paid out to Google.
As a growth marketer, I’ve worked with a lot of SaaS companies that harness Google AdWords to generate a steady, predictable flow of qualified, wallets-out prospects. The likes of whom are serious about buying.
Before you jump into running PPC campaigns hands-on, here are a few principles to keep in mind so you get the most out of your AdWords dollars.
How is Google AdWords for SaaS different than With Other Industries?
Take e-commerce for example: often you’ll see sales coming in very quickly after your ads go live.
As a result, you can immediately see whether a particular keyword is an effective one for your business.
When it comes to most SaaS products, however, you’ll have a free 30-day trial or a phone call with a sales rep.
The sales cycle is therefore much longer. It’s long enough that you very well may not know which ads are most effective until months down the road.
On the flipside, the lifetime value of a SaaS customer can be quite high. You can afford to invest more in marketing spend. You don’t have to worry about the razor-thin margins e-commerce companies have to battle with.
Find the Right Metrics for Your SaaS AdWord Campaigns
Your sales model should determine which metrics you use to track your Google AdWords campaign.
Typically, SaaS products for Small to Medium Sized Businesses (SMBs) will follow a self-service sales model. This model directs customers to sign up for your product, try it out for a specified period of time, and decide to buy it.
All of this happens without the customer ever having to talk to a sales person!
In these cases, you should focus on your customer acquisition cost for each campaign. Look for a ratio of 3:1 between your customer lifetime value and your cost of acquiring each customer.
If you hit this ratio, you’ll be able to invest in AdWords, confidently knowing that the new customers will easily pay off the investment.
A high touch sales model is where new customers talk with a sales rep before buying. You’ll often find these models employed for more complex, expensive software, where the customer needs help to be successful with it.
Here, you’ll be focusing on the cost per lead you generate with your AdWords campaigns. You’ll need to work with the sales team to measure whether you’re generating qualified prospects, or just a volume of random “leads.”
Track Your Results
In e-commerce, you should always have a goal set up in Google Analytics to can track which clicks turn into orders. With a SaaS product, you’ll need more advanced tracking software.
First off, in a self-service model, you’ll have to track a customer all the way across your domain. This includes tracking them from the first time they land on your site through the signup process, past the usual trial period all the way until they enter their credit card.
Google Analytics, otherwise an excellent analytics tool, comes up short in this regard. While Google has now introduced user tracking, you’d be well advised to supplement it with a more powerful tool such as Mixpanel or Kissmetrics.
These user focused tools show you exactly the touch points along the decision process a particular customer traversed before buying your product. You’ll also be able to see which campaigns were the most effective at bringing in new revenue.
Make Full Use of the Trial Period
Your trial period (the first part of the funnel, where customers can use your SaaS product for free) is one of your most important phases in the customer journey. Your SaaS product needs to have a coherent onboarding flow across several channels, so you can make sure you’re converting as many trial users into customers as possible.
Typically, you’ll provide tooltips and guided tours when users first test out your app. You might follow up with a phone call to check in with them.
You can also pull together a sequence of emails based on customer’s behavior that provides tutorials, next steps and reminders to enter credit cards.
You can take your on-boarding a notch higher with retargeting campaigns that target people that are already in their trial period. For example, you could have an ad leading to a webinar on how to get the most out of the software.
Toward the end of the trial period, you can then switch over to campaigns focused on activating them as a paying customer.
Consider Shortening Your Trial Length
We already mentioned that SaaS products have longer sales cycles as compared to more transactional markets, such as e-commerce. This means that it can take a lot longer to get reliable data on whether a particular group of keywords is a good match for your business.
The common approach of offering a 30-day free trial plays a big part in this. With a trial-first model, you’ll have to wait until it expires to see whether a particular cohort of trial users will convert or not.
Some SaaS companies opt to try a shorter trial period of 14 or even 7 days.
Depending on what your product does, this shorter period may well be enough for your customers to decide to pay for it. The element of time pressure may work to your advantage, as it helps people concentrate on testing the product faster.
In any case, you can have an internal policy of extending trials on request if some customers need more time.
Don’t Be Too Hungry to Eat
Marc Andreessen, one of the most successful VC investors of all time, comments that software companies often make the mistake of charging too little. When they make this mistake, they can’t afford to invest in sales and marketing.
The same can apply when trying to make Google AdWords work for your SaaS product. If your customer lifetime value is too low as compared to the competition, you’ll find that they will consistently outbid you on all of your target keywords.
Optimizing your SaaS pricing will provide additional revenue to invest back into marketing, so you can stay competitive.
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Disclaimer: The views and opinions stated in this post are that of the author, and Return On Now may or may not agree with any or all of the commentary.