The Best Customer Acquisition Funnels for a SaaS Startup

Summary

In 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

00:00

🌐 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.

05:01

🔍 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.

Keywords

💡Customer Acquisition Funnel

A customer acquisition funnel is a strategic process used to turn prospects into paying customers. It involves steps like driving traffic, nurturing leads, and converting them to paid customers. In the video, Rob Walling discusses both low touch and high touch funnels as methods to acquire customers for a SaaS startup.

💡Low Touch Funnel

A low touch funnel is a customer acquisition strategy where interaction with the customer is minimal. This type often involves driving traffic to a website and relying on content, SEO, and social media to convert visitors into customers. In the video, it's noted that low touch funnels usually imply lower price points and higher churn rates.

💡High Touch Funnel

A high touch funnel involves significant interaction with potential customers, including steps like lead qualification, demos, and personalized follow-ups. This approach is typically used for higher-priced products and can justify a larger budget for customer acquisition. Rob Walling explains that high touch funnels often require more time and effort to close deals.

💡Lead Nurturing

Lead nurturing is the process of developing relationships with potential customers at every stage of the sales funnel. It involves techniques like retargeting ads and email marketing to keep prospects engaged. In the video, lead nurturing is highlighted as a crucial step in the low touch funnel to convert visitors into paying customers.

💡Retargeting

Retargeting is a form of online advertising that targets users who have previously visited a website but did not complete a purchase. This technique uses cookies to track users and show them ads on other sites they visit. In the video, retargeting is mentioned as a method to nurture leads in a low touch funnel.

💡Free Trial

A free trial is a marketing strategy where users are allowed to use a product for free for a limited time before deciding to purchase. It helps potential customers experience the value of the product. In the video, free trials are discussed as part of lead nurturing in the low touch funnel.

💡Churn

Churn refers to the rate at which customers stop doing business with a company. High churn rates indicate that customers are not staying long-term. In the video, Rob Walling emphasizes that low touch funnels tend to have higher churn rates compared to high touch funnels.

💡Pay-Per-Click (PPC) Ads

Pay-Per-Click (PPC) ads are a form of online advertising where advertisers pay each time a user clicks on their ad. This method can be effective for driving traffic but is noted in the video as becoming more expensive, making it challenging for low touch funnels to utilize effectively.

💡Dual Funnel

A dual funnel strategy involves using both low touch and high touch funnels to acquire customers. This approach allows a company to cater to both lower-end, higher-churn customers and high-value, lower-churn customers simultaneously. Rob Walling advocates for a dual funnel approach as it balances revenue streams and stabilizes growth.

💡Customer Success

Customer success focuses on ensuring that customers achieve their desired outcomes while using a company's product or service. This involves onboarding, training, and ongoing support to prevent churn. In high touch funnels, customer success teams play a crucial role in onboarding and retaining customers.

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]

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