From the mainstream adoption of AI tools to the growing emphasis on customer retention, the SaaS marketing arena is witnessing transformative changes. Staying ahead of this curve is crucial in the hyper-competitive SaaS (Software as a Service) industry.
This article dives into the top SaaS marketing trends of this year. You’ll gain insights into how these trends impact the industry and how to leverage these opportunities for your business.
1. Software Recession & Reduced Budgets
It’s widely recognized that the SaaS niche is going through a “software recession” that has been going on for almost two years. This recession is particularly affecting startups that are selling to other B2B SaaS startups. Rising interest rates and geopolitical developments like the war in Ukraine have caused market pressures for B2B companies.
Many companies have reduced spending meaning a review of expenses. That’s not surprising given 33% of SaaS licenses are underutilized according to research by Vertice.
This has led to a lower seat count for SaaS and forced many companies to offer discount prices. Up to 22% lower than the listed retail price for a seat according to the following research by Vertice.
In the midst of this “software recession,” startups targeting other B2B SaaS companies are finding themselves in a precarious position according to the following article on TechCrunch. The inflated valuations that once attracted ample investment and talent are now becoming liabilities, especially as market conditions normalize.
Companies are still dealing with the deferred pain from large funding rounds they received in 2021. A significant number of these startups will likely run out of money in the next year or two, indicating a challenging economic landscape for the SaaS industry, especially for those in the B2B space.
The “software recession” has led to higher customer acquisition costs (CAC) and reduced seats. With reduced access to funding and a focus on profitability, marketing budgets may be among the first to be scaled back, forcing companies to seek more cost-effective, targeted marketing strategies.
In this “software recession,” the focus has shifted toward cost-efficiency and profitability, particularly for B2B SaaS companies. With companies tightening their belts, marketing teams are under pressure to justify their budgets and ROI.
The current environment may well force you to deliver more with less revenue. You’ll need to show how you’re delivering results from your targeted marketing strategies.
2. AI Tools Become Mainstream
Artificial Intelligence exploded onto the scene with the launch of ChatGPT. The AI software market is expected to reach over $250 billion in 2023 and over $1,000 billion by 2032 according to a study published by Precedence Research.
The revenue figures leave no room for speculation; AI is critical for SaaS product marketing.
You can use Generative AI models to create text, images, music, and videos.
The image below provides a snapshot of the various AI tools on the market.
Text generative AI models, like ChatGPT, are widely used by marketing teams. The 2023 AI Predictions Report by Forrester estimated that 10% of Fortune 500 companies will use generative AI tools this year.
I’d be surprised if only 10% of companies use generative AI this year.
There’s a lot of hype around AI. There’s certainly an opportunity to utilize AI to reduce the cost of business operations or establish companies that are more cost-effective and can undercut the incumbent market leader on price. Incorporating AI into your SaaS idea will improve your chances of Series A funding according to investor David Sacks in a talk from SaaSStr.
In terms of utilization, AI text generation tools have a role in your marketing toolbox. Especially if you’re focused on SaaS SEO. You can use tools like Chat GPT or Surfer AI for content generation. We use the tool for keyword research, optimizing content outlines, and various other tasks.
I’m sure you’ll find some use cases if you spend time utilizing different AI tools.
In the long term, as AI tools become mainstream in the SaaS industry, automation, and data analytics capabilities could see significant advancements. That will eventually lead to more efficient operations and personalized customer experiences.
3. Google & Bing Utilize AI in Search Results
The integration of generative text models in search results will shake up how businesses do content marketing and run marketing campaigns. Bing and Google will roll out generative AI search results later in the year.
Here’s a snapshot of the UI for Google when it releases the UI update with the Bard integration. You can read more about Google’s AI plans in this Google blog post.
Nobody knows quite what’s going to the Click Through Rates (CTR) when the search engines push through these updates. Many marketers predict a further decrease in traffic from search engines for top-of-the-sales funnel informational terms.
Outside of this, it’s pure speculation, so we’ll see how things play out. With that said, you should spend time exploring what a decrease in search traffic would mean for your business.
You might also want to adapt your marketing plan and revise your content marketing strategy. That could mean exploring channels like social media marketing, affiliate marketing, or video content as part of a multi-channel marketing strategy.
Integrating AI-generated results directly within search engines like Bing or Google will likely lead to a reduction in CTR for glossary posts where you define a keyword. This is because AI has the capability to provide concise and accurate answers directly within the search engine’s results page.
When users get the information they are looking for without having to click on any link they are less likely to go to your resource. We’ve already seen this drop in CTR happen for search queries like the weather in your region, and currency exchange rates.
With that wrapped up, let’s look at the next point; the growth of video marketing and podcasting.
4. Focus on Multichannel Marketing
Exploring different marketing channels is a logical option for business owners focused on data-driven marketing campaigns. The two most logical channels to supplement SEO are video marketing and podcasting.
Both video marketing and podcasting require significant investments of time and money to generate positive returns. These significant hurdles make video marketing and podcasting effective channels for companies exploring a product-led strategy.
Don’t rush into video marketing or podcasting without a sound plan or you’ll fail. Do your research. Check out the best podcasts and successful SaaS YouTube channels and execute a strategy to engage loyal customers. If you don’t have the resources or time to invest in creating content directly, you can always explore affiliate marketing or partnerships.
We need to separate the hype from the reality. Multichannel marketing sounds great. It should allow SaaS companies to engage with their target audience at multiple touchpoints. That will boost conversions and customer retention.
Multichannel marketing necessitates more complex data analytics and customer journey mapping. Additionally, resource allocation is a challenge, as companies need to invest in expertise and tools for each channel, potentially stretching budgets and manpower.
If you’re just starting out, it’s better to focus your efforts on one channel than spread your time and budget thinly. That’s likely to generate the highest ROI.
5. More Multilingual SaaS Sites
Tools like ChatGPT have made translating content significantly easier and cheaper. That makes it easier for startups and scale-up SaaS companies to access new markets with less competition. This is an opportunity for companies looking to improve their growth rate.
Essentially, you produce a piece of content in English, for example. Then you utilize a tool like Chat GPT to translate the content into several languages.
There are many examples of companies that have implemented this strategy.
Ranktracker is a good example. They have content in languages like Dutch, Spanish, Swedish, Japanese, Polish, Indonesian, Italian, and French. The quality of the translated content isn’t perfect, but they have content rankings in the SERPs across multiple languages.
For example, they get 1.2k visitors a month to the Spanish content.
While translating a site into multiple languages seems like an easy way to boost your inbound marketing efforts, there are plenty of problems associated with this approach. For example:
- The conversion rate in different languages will vary because your content isn’t optimized for the language. You’ll likely encounter user experience issues in new languages too.
- Your customer service and sales teams will struggle to deal with leads in a new language. That will impact your retention rates.
Take the time to think about whether running a multilingual offering makes sense for your software solution. There are certainly many benefits to running a multilingual site, but you need to be prepared for the drawbacks that come with this business model.
Reducing the cost of creating a multilingual site offers SaaS companies the opportunity to expand their global reach and tap into new markets. It enhances user experience by providing content in the user’s native language and offers a competitive edge through multilingual SEO.
However, this approach is not without its challenges.
Automated translations may lack nuance, leading to potential misunderstandings, and the ongoing maintenance of a multilingual site can become complex. Additionally, cultural sensitivities must be considered to ensure that the translated content is appropriate for each audience.
6. SEO Optimized Feature Pages
The core features of your product offering generally align with keywords that prospective customers are searching for. Creating SEO-optimized feature pages enables you to rank for bottom of the sales funnel terms with a high conversion rate.
There are certain best practices to follow when optimizing your feature pages for keywords.
Start by conducting keyword research to align your feature offering with a keyword. You should back this up by gathering customer feedback and creating detailed customer profiles. This will help you create feature pages that generate audience engagement and align with the pain points and interests of your customers.
Once you’ve conducted the research you can start designing a long-form sales page. Your sales page should clearly describe the benefits of your feature, social proof, and an FAQ section.
Dropbox is a prime example of a SaaS company utilizing feature marketing. Every feature of its product has a web page. The screenshot below shows how a user can see all the key features of the product in the menu:
You can click on the different pages to learn more about product features.
The FAQ section is where you include the copy that helps your content rank in the search engines for longtail keywords. The answers to these questions are generally hidden behind an accordion. This is an effective marketing strategy to engage with in-market leads. Of course, you’ll need backlinks to make your content rank.
7. More SaaS Companies Will Embrace Usage-based Pricing
More SaaS companies are embracing usage-driven pricing strategies. The price of your service offering is important for companies in the competitive SaaS market. The usage-based pricing model allows customers to pay based on usage.
The usage-based pricing model can help you acquire customers with fluctuating usage needs. That’s particularly important given the economic headwinds we’re facing this year.
The usage-based, or pay-as-you-go, pricing model has been especially popular among cloud service providers. It then started making its way into SaaS conference discussions, and soon afterward, more SaaS players adopted it. In fact, 56% of SaaS companies were charging usage-based pricing models in 2022. That’s an increase from 27% back in 2018.
Shopify has already introduced usage-based pricing models, among others. It offers its clients modular pricing based on component usage.
Why is this preference popular? It’s a flexible option allowing customers to explore how to use your company’s services naturally without spending more money than they need to. This can be a game changer, especially if you notice that price is an important factor among your target customers.
Customers get billed at the end of the cycle a usage-based charge of what they consumed, as opposed to a flat subscription pricing fee charged regardless of how often they used the service.
Usage-based pricing allows for paying for products depending on how people use or consume them. The customer can start at a low cost. Attracting more customers to this scheme means securing a monthly income. The price is directly tied to the value a customer receives.
During the usage-based period, you can present your brand and other products to the customer. You can then build trust and nurture users to convert them into fully paying customers.
Therefore, it makes perfect sense to promote usage-based pricing to your leads and then work towards upselling them to give the users more value while generating more revenue for your business.
8. Increased Use of Native Advertising
Native advertising is part of paid advertising. Your ads should match the look, feel, and function of the media format they are displayed in. The aim is to have the ads fit natively and seamlessly on the web page the user is looking at.
This native look makes the ad not appear like a regular ad, so it doesn’t disrupt the user’s interaction with the page. You’re showing the user promotional content, but unlike display, or banner ads, it’s not annoying.
Native ads often take the form of recommended content on websites. So, if a user is reading an article, it can appear below or beside the blog post.
Here’s an example of a subtle native ad from PayPal (in the red box) placed alongside other articles on the Entrepreneur’s site.
Native ads may also appear on social media channels, like Facebook or Twitter, as part of users’ news feeds. Another popular way of showing native ads is on Google search results pages. Those can be the search and promoted listings at the top of the page or in the sidebar.
In your native advertising strategy, serve the ads on relevant platforms, i.e., areas where your target audience hangs out. Additionally, deliver relevant ads that will resonate with your audience.
9. More SaaS Companies Will Use Unbundling Strategies To Increase Conversions
In 2023, unbundling strategies will be adopted to satisfy the ever-increasing demands of customers.
Although the additional features of any software are usually great, not every prospect needs them. Enter the unbundling strategy, where you break the products into smaller parts that solve a specific problem.
The companies have to unbundle their products and let users build their packages. You give customers a core model priced at the base price. Then, they can choose to add additional features they want to use.
Making this option available satisfies users who only want to pay for the features they use. Who wouldn’t like that?
We’ve already seen SaaS companies like HubSpot take the lead on this. The company has unbundled its products into multiple “hubs,” allowing customers to only pay for what they need.
Unbundling impacts the price of the product. Companies will have to come up with the minimum price they will charge their customers for solving specific problems instead of buying all the services simultaneously.
Unbundling brings a lot of new content needed to educate prospects about your products. Creating How-tos, demo videos, and webinars, publishing them online, and then promoting them through social media, email campaigns, etc. That’s a lot to work on in 2023.
10. A Focus On Customer Retention
SaaS companies are going to obsess over customer retention more than ever before. As the competition grows, looking after your current customer base is crucial.
New customer acquisition is pricey and time-consuming. That’s why one of the most vital rules in the SaaS industry is to retain customers and build loyal relationships with them to avoid costly customer acquisition costs.
You can increase customer retention by giving your users an outstanding customer experience. This is another area where embracing AI would help, as it can improve user experience through conversational AI.
Here’s a handy overview of how a SaaS company can improve customer experience:
Offering a great customer experience will grant a constant improvement in customer satisfaction. This will lead to better customer retention and revenue increases.
Write user-centric pieces of content and stories. Make your digital marketing focused around the users.
The below newsletter from Canva proves that the company likes to keep its customers engaged and at the center of its campaigns. The company creates fun design challenges, among other initiatives, just to entertain its users.
Meet your clients on social media. Be active on Facebook and Twitter, where customers like to ask questions and seek help. Promote new products and solutions. And create a thriving community for your users.
A new year usually brings new trends to look out for. The SaaS industry is no different.
The influence of AI in SaaS product marketing is increasing. You should also focus your marketing efforts on feature marketing and unbundled products and introduce usage-based pricing models. Promote SaaS products using paid native ads and put an even greater focus on customer retention.
Now you know the SaaS marketing trends to look out for in 2023. Double down on these to stay ahead of the competition.
Nico is the founder of Crunch Marketing, a SaaS marketing agency. He works with enterprise SaaS clients like Writer, Right Inbox, and Surfer SEO, helping them scale lead generation globally across EMEA, APAC, and other regions.