Going From Product Market Fit To Traction – What Works In SaaS?

If you have a few early customers for your SaaS application, the next question typically is to get to $1000, then $10K and then $100K in MRR (Monthly Recurring Revenue) – which most people will call serious traction.

The biggest criteria I have found in looking at the 3 SaaS companies I have invested in is price of the product determines the customer acquisition technique.

There are 3 bands of pricing for SaaS products. I am going to look at monthly prices for all the products.

The first band is if your product is an individual purchase on a person’s credit card. Typically most people get uncomfortable at more than $99 per month. The sales cycle could be anywhere from 2 to 6 weeks.

The second band is when a department purchases your product for use, or if your product is highly specialized for a role which makes it between $99 to $499 per month. The sales cycle is typically between 2 to 10 weeks is my experience.

Finally, the last band at $499 to $999, is when you typically need approval from your manager. In many cases a “corporate wide” approval may also be required at > $999 per month. In most cases the sales cycle is greater than 6 weeks and for products > $999 per month might take 3 months or more.

These are when you are selling to an enterprise B2B market. For those targeting SMB markets, the bar is lower for the amount of money, because you typically find the owner approving most purchases over $299.

If you have a few ( say 10) customers for your product and are making between $1000 (for $99/month product) to $5000 ($499/ month product) and are trying to get to traction – $10K and then $100K per month, there are only 2-3 techniques each that work.

For lower cost products, SEO and Search advertising are predominantly the only viable models.

For more expensive products, since the sales cycle is typically longer, you will need to “start” your customer acquisition with one technique (Content Marketing, with Social Engagement) and will probably “engage” the customer (cold emails, inside sales engagement after signup) via phone and likely have a face to face meeting for products that cost > $25K per year.

What does not work for early stage, pre-traction companies?

Events, especially those that feature a lot of companies and several large organizations in your space, dont work at all.

There are 2 techniques that many people claim work to your “brand” front and center with customers, but does not drive leads – blogging and podcasting.

While both are largely easy to do and require much less investment than other techniques, they might be used in conjunction with other mechanisms, but will not drive much in terms of signups, even if you have a “freemium” plan.

What I have also noticed is that engaging potential customers via  webinar (where you get 20-30 participants) and they can ask questions and learn about the problems you solve work much better than even search marketing and touch-less signup.