The Best Customer Acquisition Funnels for a SaaS Startup
Summary
TLDRIn this video, Rob Walling, a startup founder and investor, explores the best customer acquisition funnels for SaaS startups. He simplifies the options into two main strategies: low touch and high touch. The low touch funnel focuses on driving traffic and converting visitors with minimal interaction, suitable for lower-priced products with higher churn rates. High touch funnels, on the other hand, involve a more hands-on approach with lead qualification, demos, and closing deals, catering to higher-priced products. Walling ultimately recommends a dual funnel approach, combining both strategies for a balanced and robust customer acquisition strategy.
Takeaways
- 📈 **Low-Touch Funnel Defined:** A low-touch funnel is characterized by minimal customer interaction, aiming for conversions with little to no direct contact, often associated with lower price points and higher churn rates.
- 🚀 **Driving Traffic:** The first step in a low-touch funnel is to drive traffic to the website, utilizing cost-effective channels such as SEO, content marketing, social media, and partnerships to manage churn and maintain a lower lifetime value.
- 🔍 **Nurturing Leads:** The second step involves nurturing leads through retargeting, email lists, lead magnets like ebooks or free trials, and free plans to convert visitors into paying customers.
- 💳 **Conversion to Paid:** The third step is converting leads to paid customers, where the value proposition is strong enough for prospects to enter their credit card information and commit financially to the product.
- 🔄 **Retention Focus:** Retention is critical in a low-touch funnel to combat higher churn rates, emphasizing the importance of customer satisfaction and continuous value delivery post-conversion.
- 🔎 **High-Touch Funnel Overview:** High-touch funnels involve a more personal approach with steps including lead generation, qualification, demo, closing the deal, and onboarding, suitable for higher-priced products and services.
- 📞 **Outbound and Inbound Traffic:** High-touch funnels require a mix of outbound outreach and inbound traffic strategies, often with a larger marketing budget to support higher pricing and more complex sales processes.
- 🤝 **Lead Qualification:** The process of qualifying leads in a high-touch funnel involves assessing the prospect's budget, fit, and long-term success potential with the product.
- 📊 **Customized Demos:** Demonstrations in a high-touch funnel are tailored to the qualified prospect's needs, focusing on solving their specific problems and involving interactive questioning to understand their requirements.
- 📈 **Deal Closure and Follow-ups:** Closing a deal in a high-touch funnel may require multiple follow-ups and demos, reflecting the complexity and time investment needed for higher-value sales.
- 🛠️ **Customer Onboarding:** Post-sale, customer success takes over to onboard the customer, ensuring they receive the value they've paid for and maintaining a relationship to reduce churn.
- 🔄 **Dual Funnel Strategy:** The speaker recommends a dual funnel approach, combining the benefits of both low and high-touch funnels to balance brand building, customer acquisition, and revenue stability.
- 🌐 **Brand and Reputation Building:** A mix of low and high-touch customers helps in building a strong brand and reputation across various online communities, contributing to a smoother revenue growth trajectory.
Q & A
What is the main focus of the video by Rob Walling?
-The video focuses on discussing the best customer acquisition funnels for SaaS startups and provides insights into low touch and high touch funnels.
Who is Rob Walling, and what are his qualifications for discussing SaaS startups?
-Rob Walling is a startup founder with multiple exits, an author of three books about building startups, and an investor in more than 100 companies.
What are the two main types of customer acquisition funnels discussed in the video?
-The two main types of funnels discussed are the low touch and high touch funnels.
What is the primary characteristic of a low touch funnel?
-A low touch funnel is characterized by minimal customer interaction, often used interchangeably with no touch, and usually implies a lower price point.
Why might a SaaS startup choose a low touch funnel?
-A SaaS startup might choose a low touch funnel to avoid high customer acquisition costs and to create a lifestyle business where they don't have to interact with customers before they sign up.
What are some common low-cost traffic channels for a low touch funnel?
-Common low-cost traffic channels include SEO, content marketing, social media, partnerships, integrations, and sometimes pay-per-click ads if they can be cost-effective.
What is the second step in a low touch funnel after driving traffic?
-The second step is nurturing leads through methods like retargeting, email lists with lead magnets, free trials, or free plans.
What is the main difference between a low touch and a high touch sales funnel?
-The main difference is the level of customer interaction and the price point of the product. High touch funnels involve more personal interaction and are typically for higher-priced products.
What are the five steps of a high touch sales funnel according to the video?
-The steps are: 1) Getting leads, 2) Qualifying leads, 3) Providing a demo, 4) Closing the deal, and 5) Onboarding the customer.
Why is customer churn a significant concern in SaaS businesses?
-Customer churn is a significant concern because it can negate the efforts put into acquiring customers, and high churn rates can be detrimental to the business's revenue and growth.
What is Rob Walling's recommendation for the best customer acquisition strategy for SaaS startups?
-Rob Walling recommends a dual funnel approach, combining both low touch and high touch funnels, to leverage the benefits of both strategies and achieve a smoother revenue growth.
What are some examples of SaaS startups that use a dual funnel approach?
-Examples given are SignWell, which offers electronic signatures, and Squadcast.fm, which provides studio-quality podcast recording in a web browser.
Outlines
🌐 Introduction to Customer Acquisition Funnels for SaaS Startups
In this video, Rob Walling discusses the optimal customer acquisition strategies for SaaS startups. He introduces himself as a seasoned startup founder, author, and investor, and sets the stage by highlighting the importance of choosing the right funnel. He narrows down the discussion to two main types of funnels: low touch and high touch. The low touch funnel is characterized by minimal customer interaction and a focus on driving traffic to a website, often through cost-effective channels like SEO, content marketing, social media, and partnerships. The goal is to convert visitors into customers with minimal direct contact. Rob outlines the three basic steps of a low touch funnel: driving traffic, nurturing leads through retargeting, email lists, lead magnets, free trials, or free plans, and finally converting leads to paid customers. He also touches on the challenges of high churn rates and the need for effective retention strategies in such a funnel.
🔍 Exploring High Touch Sales Funnels and the Dual Funnel Approach
Rob Walling continues the discussion by delving into the high touch sales funnel, which he previously covered in another video. He outlines the five steps of this funnel: getting leads, qualifying them, demonstrating the product, closing the deal, and onboarding the customer. Each step is crucial, from initial outreach to the final sale and beyond. Rob emphasizes the importance of managing the sales cycle duration and the need for a significant budget to support high-touch strategies, such as pay-per-click ads and outbound outreach. He also discusses the critical role of customer success in reducing churn and maximizing customer lifetime value. Towards the end, Rob reveals his preference for a dual funnel approach, combining the benefits of both low touch and high touch funnels. This strategy leverages the power of a high-traffic, low-touch funnel for brand exposure and a high-touch funnel for enterprise customers, creating a balanced and sustainable revenue stream. He cites examples like Signwell and Squadcast.fm to illustrate the effectiveness of this dual approach.
Mindmap
Keywords
💡Customer Acquisition Funnel
💡Low Touch Funnel
💡High Touch Funnel
💡Lead Nurturing
💡Retargeting
💡Free Trial
💡Churn
💡Pay-Per-Click (PPC) Ads
💡Dual Funnel
💡Customer Success
Highlights
The best customer acquisition funnels for SaaS startups.
Rob Walling is a startup founder with multiple exits, author of three books, and an investor in over 100 companies.
The two main funnels for customer acquisition: low touch and high touch.
A low touch funnel involves driving traffic to a website with minimal customer interaction, typically associated with lower price points.
Higher churn rates are common in low touch funnels due to lower price points and lifetime value.
Cost-effective traffic channels for low touch funnels include SEO, content marketing, social media, partnerships, and integrations.
Pay-per-click ads like AdWords and Facebook ads are becoming more expensive and may not be viable for low touch funnels in B2B SaaS.
Step one of a low touch funnel is driving traffic; step two is nurturing leads, often through retargeting and email lists.
Lead nurturing methods include offering a lead magnet like an ebook or a free course, free trials, and free plans.
Step three of a low touch funnel is converting leads to paying customers.
Higher churn in low touch funnels necessitates a focus on retention strategies.
High touch funnels involve more customer interaction, higher price points, and typically require a sales team.
High touch sales funnels involve five steps: getting leads, qualifying leads, demoing, closing the deal, and onboarding.
A dual funnel approach, combining low touch and high touch funnels, provides a balanced strategy, attracting both low-end and enterprise customers.
Dual funnels can smooth revenue growth and reduce churn, blending high-volume, low-churn customers with higher-paying enterprise clients.
Examples of successful dual funnel companies include Signwell and Squadcast.fm.
The dual funnel approach helps build brand reputation and provides a diversified customer base.
Transcripts
in this video i'm going to talk through
the best customer acquisition funnels
for sas startup stick around until the
end to hear which funnel i would seek
every single time i'm rob walling i'm a
startup founder with multiple exits
author of three books about building
startups and an investor in more than
100 companies i'm going to cover two
funnels today i'm going to simplify it
obviously there's a lot of different
ways to get folks to your sas app to get
them to sign up and become customers i'm
going to simplify it and go with the two
main funnels that i refer to the most
low touch and high touch first i want to
talk about low touch and really define
it for you talk about the implications
of it and give you the three basic steps
of what a low touch funnel looks like so
a low touch funnel is one where you
probably guessed it you drive traffic to
a website and you try to get people to
convert you don't have a lot of customer
interaction and in fact low touch and no
touch are often used interchangeably low
touch funnels usually imply a lower
price point it's hard to have a really
expensive product and not speak to your
prospects or customers in advance and
the first step in a low touch funnel is
to drive traffic and since your price
point is low oftentimes that means you
have higher churn and that tends to mean
your annual contract value or your
lifetime value is lower than if you had
a more expensive product so that implies
as you drive traffic you can't afford to
pay a lot for that traffic and so some
of the common lower cost traffic
channels are things like seo content
marketing social media even like
partnerships and integrations if you can
get enough scale there and get someone
to promote it sometimes you can get
pay-per-click to work but pay-per-click
ads like adwords and facebook ads are
getting more expensive over time and so
if you truly have a lower no touch
funnel it's harder i'll say in b2b sas
specifically it's pretty hard to get
pay-per-click to work just keep in mind
that if you do seek a low touch funnel
which is what a lot of bootstrappers
want they kind of want that lifestyle
business where they don't have to talk
to someone before they become a customer
and the dream is that a bunch of traffic
comes to your website and converts
without you having to do a lot of work
and you're right you don't have to do a
big sales job but the work is in driving
out traffic and converting folks to
becoming paid customers so that was step
one of a low touch funnel which is to
drive traffic and sometimes those people
convert on their first or second visit
just with the copy you have on the
website but more often than not step two
of a low touch funnel is to nurture
those leads and there are many ways to
do this you can use retargeting which is
where you cookie that individual and
then you can advertise to them on
facebook or google or other networks an
email list is another way to nurture and
that's where you offer a lead magnet
like an ebook or a free course so folks
can learn how to solve problems relevant
to your application or even a free trial
and a free plan these are ways to
nurture leads so folks can try out your
product they can start thinking you know
is this valuable to me and a free trial
of course usually expires after a
certain amount of usage or a certain
amount of time versus a free plan which
usually has a low usage limit and
eventually maybe hopefully crossing your
fingers if you really know how to do
freemium someone might convert to paid
and that's step three when someone
converts to paid when someone starts
paying you money they enter their credit
card they've gotten enough value from
what you've been offering them that they
are to the point where they want to pay
for your product and of course there are
steps beyond this right there's
retention can we keep people from
churning and as i said earlier in a low
touch funnel churn tends to be higher
than if people are paying you more money
so there are more things to worry about
but for the purpose of this video that's
where we'll stop with the low touch
funnel and we'll dive into the high
touch funnel now i already covered high
touch sales funnels in a video on this
channel called five critical components
of a high performing sas sales pipeline
so i won't go so deep into them here
because you can go watch that video for
a deep dive but in essence there are
five steps to a high touch sales funnel
the first is getting leads there's
outbound outreach and there's inbound
traffic much like you would use in a low
touch funnel although you will have more
budget if you're doing high touch you're
charging more and so you should have
more budget to do things like
pay-per-click ads to do cold outbound
outreach and to really double down on
these marketing approaches so after you
drive the leads step two is usually to
qualify those leads and as a founder
early on you'll be doing that yourself
later you will assign it to members of
your team sdrs and bdrs and the
questions you're asking in this phase
are does this prospect have the budget
to afford our product are they a great
fit for our product will they be
successful with it in the long term
you're qualifying them to find out if
they are a good customer for you and
your product is a good fit for them step
three is usually a demo and in the early
days this is given by a founder and as
you move on you hire sales people or as
they're more commonly known account
executives or aes this is where you're
able to find out from that qualified
prospect what they're actually looking
to accomplish with your software and
then you're trying to show them just
enough that they know that they can
solve that problem you're not giving
them a full demo of every settings page
your demo should be shorter than you
think and it should involve you asking a
lot of questions of that prospect to
find out what are they trying to do with
your product step four is to close the
deal this often requires multiple
follow-ups might even require multiple
demos multiple conversations if there
are many people making the decision and
obviously the more complicated the sales
process is the longer it takes to get to
close the more you need to be able to
charge for your product to make it worth
not only your while but as you expand
your sales team you're gonna bring more
people into it and the more time they
have to spend the more money
the deal needs to be worth in order to
justify it the process from demo to
close can be amazingly fast it can be a
few weeks or it can take many months
depending on your sales cycles and the
last step in a high touch funnel is to
onboard that customer usually there's a
customer success person involved and
they take over they get the person
onboarded and now it's time for customer
success to be able to show that person
all the value that they've paid for and
to follow up and touch base with them on
enough of a cadence that you keep them
around as a customer and they don't
churn because all of the effort you put
in to driving those prospects to your
website to qualifying them to demoing to
closing the sale you don't want that to
get wasted i keep saying that churn is
the death of sas and it's something you
need to focus on in any of your funnels
in a second i will tell you the funnel i
would choose every single time but
before that if you've enjoyed this video
i'd love it if you would hit the like
button and subscribe to the channel we
have content like this coming out every
week on this channel so if i were to
decide between a low touch and a high
touch funnel i would pick neither i
would pick a dual funnel where you have
both there's incredible power in having
a low touch high traffic funnel with a
lot of people coming to your website and
a lot of folks talking about your brand
and if you can have that lower end
funnel with lower price points but also
support enterprise customers it's an
amazing combination and we see that in
startups like signwell which is
electronic signatures they have folks
coming in paying them 12 15 a month and
then they have folks coming in wanting
enterprise deals squadcast.fm which is
studio quality podcast recording in a
web browser has a similar dual funnel
you can imagine there are folks coming
in to do their dungeons and dragons
podcast and then on the high end you get
a huge podcasting network or even a
radio station that is trying to record
remotely and they can and should pay
thousands of dollars a month there's
such strength in this dual funnel
because you get these big low churn
customers who pay you in advance but you
also get hundreds if not thousands of
customers who are paying you less and
may have a little bit higher churn but
it builds the brand and it builds your
reputation across the internet across
the facebook groups and the slack groups
and that mix of low and high touch
customers actually makes your revenue
into a much smoother graph as it grows
instead of having either these big
spikes as you normally do when you have
these big high-touch enterprise sales
processes and it also keeps you from
having the high churn that a low touch
funnel normally gives you so hope you
enjoyed my walkthrough of the best
customer acquisition funnels for assass
startup and i'll see in the next video
[Music]
you
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