If you’re running paid ads on Google or any other platform it is essential to collect and analyze key campaigns metrics. These metrics help evaluate the results and apply correct optimizations. Conversions, clicks, ROI, CPA, and many more are some examples of them. One of the crucial ad characteristics is conversion rate, which helps you understand which channel is generating more traffic. The more accurate this metric is, the more ad spend can be relocated to the effective channel. In this article, we shared 9 ways to improve SaaS conversion rate and enhance campaign performance.
Conversion rate is the number of conversions divided by the total number of visitors.
The actual definition will differ depending on the business goals and conversion tracking. For example, an e-commerce site focuses on the purchases if conversion is a purchase only, the conversion rate shows the percentage of customers who purchased for a number of all website visitors. First of all, you should understand the customer buying circle and then set the targets for conversions to track valuable for your business actions. Depending on each business and its operations, you’ll have different conversion rates that are crucial to monitor. You can see the statistics for an average Conversion Rate divided by industries. According to WordStream research, conversion rate differs from industry to industry dramatically.
As you can see, there is no single conversion rate that defines success, but only industry benchmarks.
The average conversion rate for search and display for all industries is 2.26% while the average conversion rate is 3.75% for search networks and 0.77% for display networks.
Generally, the conversion rate for display networks is at least twice lower than that of the search. The absolute leader is Dating & Personals, the next industry with high rates is Legal Auto and Consumer Service. Most industries have average from 2.47% to 3.39% for search and from 0.5% to 1.19% for display conversion rates. The lowest metrics are Home goods display and Advocacy search.
A high conversion rate is one of the key indicators of marketing strategy success as finding new customers is a goal for many businesses.
The advertisers optimize for a higher conversion rate as it lowers the customer acquisition costs and increases revenue per visitor. There is always space for growth when it comes to increasing conversions, and companies are constantly working on their sites and apps to create a better user experience.
Conversion Rate for SaaS
SaaS (Software as a service) is a software distribution model in which a cloud provider hosts applications and makes them available to end-users over the internet. Generally, the conversion rate for SaaS companies is the percentage of users who become paying customers. A good SaaS conversion rate is nearly 3-5%, while a strong conversion rate would be higher than 8%.
This benchmark is a good reference point, but you should focus on your conversion rates and what optimizations are needed to achieve your specific goals.
We’ll describe three types of SaaS conversion rates.
- Website Conversion Rate
Website conversion rate reflects the percentage of site visitors who perform the desired action (ideally, you should measure qualified leads). That could include such conversions as viewing the pricing page or signing up for a demo.
It is one of the best practices to focus on a single website conversion goal as it allows you to evaluate if you are meeting your conversion goals and revenue. If you want to learn more about specific Facebook Ads best practices for SaaS companies, check out one of our recent articles.
Tip: If your website doesn’t attract enough conversions, revise your headlines and copy after every thousand visitors. Be sure your value proposition is clear and test various ad copy until your conversion rate increases.
- Free Trial Subscriber Conversion Rate
It’s obvious that a free trial user is much more valuable than a site visitor. This person is an active user as he/she has taken action toward the product. If your customer processes and onboarding email sequence are effective, this person is likely to become a paid subscriber.
Tip: To increase the chances of free trial users becoming paid customers you should communicate expectations clearly throughout the trial period and make it easy to upgrade or downgrade.
- B2B Conversion Rate
SaaS conversions are difficult to track if the business sells enterprise products and a sales process is long.
For example, if the annual contract is $100,000, the site can’t complete the selling funnel without a sales team. In this case, the conversion rate optimization will focus on generating qualified leads. There are various B2B software conversion rates. You should consider tracking marketing qualified leads (MQLs), sales qualified leads (SQLs), and other metrics.
Now we understand the meaning of SaaS conversion rates and let’s dive into the most important question: how can we improve the company’s SaaS conversion rate?
How to improve Conversion Rate
1. Identify Customer Journey Touchpoints
Data is key to informed and impactful marketing decisions. First, identify steps the users made to become paid customers. Once you know it, figure out measurable metrics for each stage and prioritize them. Now you know what is important to track, you can set up KPIs.
2. Set up Proper Targeting and Lead Scoring
You will be optimizing your landing pages and onboarding process endlessly and unsuccessful if the traffic is low-quality. That’s why having relevant targeting is a must for an effective workflow and a broad holistic effort towards reaching the same goals. As an option, you can have customized landing pages for different demographics.
3. Present on the Relevant Marketing Channels
Nowadays there are plenty of channels and platforms but don’t try to present your brand everywhere. Instead, choose one or two marketing channels where your targeted audience can be reached at a reasonable price. Your customer acquisition rate will increase if you get more qualified leads at the top of the marketing funnel.
4. Make The User Experience Easy
Offering a great user experience is one of the most important steps in attracting paid customers. If you sell a complex product, involve customer success in the onboarding process. This point is especially critical if you are using a low-priced or free trial offer.
5. Offer Calls or Meetings for Customers
Online meetings and calls are one of the most effective and quickest communication types. If you have less than 1,000 customers, you should think about getting on the phone with them. Few people will let their trial period expire without doing anything. Offer meetings to map out your customers’ problems. Once you understand their concerns, you can help them to achieve better results using your software. Also, calls are a great way to collect information about any technical issues and work out the problem as nobody wants to have a dysfunctional product.
6. Tailor The Trial Strategy
There is no doubt, trials are the best option to convenience the potential customers purchase your product. Each product requires specific features for a trial period like short or long, free or paid, with a credit card, or without a credit card. However, you can think about different options as well. For example, offering users two or three extra days if you see they are using your product actively. This time may help them see more value and start communicating with the customer.
7. Increase the Email Marketing Conversion Rate
During the trial period, a user is starting from scratch to learn your product so it is a great idea to send emails with helpful content. For example, short step-by-step videos on how to set up a program or complete tasks in the product. Send personal emails and don’t overload the users with corporate information rather think about what is essential for a new user.
8. Use Customer Reviews
You can call it reviews, testimonials, or customer references, any social proof makes SaaS business reliable. The market has shifted to “people like me” trust, while trust in advertising has decreased. That is why the reviews and testimonials are brilliant to prove to potential customers the brand is worth trying. You can use testimonials on the website prominently and strategically in communication, sales, emails, and event registration.
9. Try Testing the Pricing Page
Your pricing page is a powerful point where a buying decision is made but an unappealing pricing page may be a reason for low conversion rates.
As a rule, SaaS pricing pages have a set structure. Usually, a subscriber can choose plans depending on the period length (monthly/annual)next they choose features.
Supermetrics has the following pricing plans:
Such a pricing structure is widespread, but there are other options. Slack pricing page gives more details and advantages for different plans iif you scroll down the page:
Salesforce offers a free trial for each plan so the customer could experience the difference:
Unbounce has a 10% off if a customer chooses to buy an annual plan:
Conversion rate optimization can be a difficult subject to cover, and even more difficult to implement. Having a high converting site is crucial to any business. SaaS companies with high conversion rates will grow and gain success. There are several ways to improve SaaS conversion rate to attract high-quality prospects.
Teamedia helps companies improve SaaS conversion rate and generate qualified leads. If you want to boost sales, contact us. If you have tested any other ideas for increasing conversion rate, feel free to let us know in the comments below!