Want Perfect SaaS Sales Funnels? Here’s How To Build Them!

If you run a software as a service (SaaS) company, you know that leads do not convert themselves. That is why a SaaS marketing agency takes time to meticulously build yours. This article takes a deep dive into one of the foundations of SaaS success online. It covers the following topics:

• What a sales funnel is, and how it differs between regular products and SaaS.
• Types of SaaS funnels.
• A concise guide to getting started with building your funnel.

This blog post also provides examples of how to apply the concepts and techniques discussed. Creating a well-designed sales funnel leads to higher conversions and returns. It also avoids some of the persistent “silent killers” that hamper your growth. Read below to learn more about this process. Let’s go!

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What Are Sales Funnels?

A sales funnel is a visual representation of your customer journey. It starts from the awareness stage to the bottom phases, such as closing and advocacy.  Its name is the ideal metaphor for the effects of your marketing efforts on leads and customers. Just as with a funnel, the top stages attract a wide pool of leads. However, their numbers dwindle as they move towards the bottom. This explains why the conversion rate is usually 5% or below. If you have designed your funnels well, you can do the following:

• Push many leads into every stage, potentially increasing your conversion rate.
• Nurture leads who are not yet ready to convert. This helps reduce acquisition costs.
• Consistently engage existing customers to become more receptive to cross-sells and upgrades. They are also easier to convert into advocates, helping promote your brand. 

How this funnel looks for SaaS, however, differs vastly from eCommerce or retail:

• They focus on driving initial trials, subscriptions, renewals, and expansions. For this reason, the customer’s lifetime journey is usually longer.
• SaaS companies often need to demonstrate value before encouraging leads to pay. They do this through freemium offers, extensive content marketing, and free trials.
• They utilize in-product experiences and lifecycle marketing to retain and expand accounts. These result in more opportunities to engage customers post-purchase.

The Many Flavors of SaaS Sales Funnels

SaaS businesses also have more flexibility in design. They usually become creative by blending funnel types to meet their unique needs. Here are some of the options and how they work:

Type of Sales Funnel	Description and Example
Free trial	– This funnel provides free access to the full product for a limited time. It’s one of the most direct ways to persuade prospects. – Slack is a prime example. The low barrier to entry floods the top of the funnel with leads for nurturing and conversion later.
Freemium	– The model offers a free but limited product version and some premium features. Freemium gets prospects invested in the product before upselling them later. – Evernote does this well. The app lets users store a restricted number of notes for free while charging for advanced functionality.
Direct	– As the name suggests, the direct sales funnel is straightforward with aggressive promotions to drive immediate purchases. This high-pressure approach is common for low-priced SaaS products such as Grammarly. It frequently advertises discounted introductory deals.
Content upgrade	– Content-upgrade funnels give free content such as ebooks, courses, or templates in exchange for contact information. – HubSpot is one of the pioneers of this tactic. It nurtures captured leads with more content that provides ongoing value. The content gets users invested before they are even aware of the product.
Webinar	– Webinar funnels use free educational webinars to capture leads. During the webinar, the host explains the product and pricing in detail. They then walk the prospects through a sales pitch. – Kajabi is great at this. It uses the technique to demo the platform and guide users through signing up.
Consultation	– Consultation funnels involve offering free one-on-one sessions with sales reps. These conversations help tailor specific product packages to the client’s needs. Salesforce usually applies this approach.

As you can see, the options are wide. Don’t feel limited to just one funnel format. Test different approaches and see what works best for your business.

Crafting Your Custom SaaS Sales Funnel

Now that you know the varieties of SaaS funnels, let us walk through how to build one for your business. The specifics differ based on the type that you choose. However, the core stages remain the same.  Here are the steps to creating your sales funnel:

     1. Attract: The Awareness Stage

The awareness stage is one of the primary components of demand generation. This involves increasing brand awareness. This wide top-of-the-funnel is also where you want maximum reach to drive new leads.  Many SaaS companies struggle with this stage. You are up against hundreds of competitors getting their names in front of the same customers. Because prospects have many choices, you have to communicate your value proposition.  Stand out by not selling. Instead, stress your expertise and trustworthiness by aligning quality content with user intent. These include doing the following:

• Crafting compelling, benefit-driven messaging that speaks to their problems.
• Creating tailored landing pages and content assets that get attention.
• Leveraging targeted paid advertising to reach your audience.
• Offering free content or tools that provide immediate value in exchange for contacts.

For a free-trial funnel, a strong awareness strategy is critical. You need high volumes entering the funnel to account for drop-offs later. Some effective tactics include these ideas:

• Running a limited-time free trial promotion across platforms. 
• Creating a viral referral program to drive shares.
• Advertising in communities and forums where your users are present.
• Partnering with influencers or brands to expand reach.

If yours is a freemium funnel, promote the value delivered in the free version. For example, develop content and ads focused on the free product’s capabilities. Make sure the fundamental free features are apparent on the landing page. Get signups directly on your website to onboard users immediately. 

     2. Engage: The Interest Stage  

The awareness stage concerns initial reach. The interest phase is when you start nurturing leads. Now is the best time to start building relationships with prospects who know about your product. Like in the first stage, marketing takes charge at this point. It starts to modify or expand customer profiles. It runs segmented and automated email marketing campaigns. The team is also responsible for tracking lead engagement. Meanwhile, the sales team focuses on communicating directly with incoming leads to continue engagement. Some have discovery conversations to understand needs and fit. It also schedules product demos and begins to identify promising leads for trial offers or fast-track deals. Leads seamlessly flow from top to mid-funnel when sales and marketing collaborate. The prospect remains engaged through targeted, valuable experiences. If you follow the consultation funnel, your nurturing sequence might look like this:

• After a prospect signs up for a free consultation, send a thank-you message reaffirming the consultation’s value. 

• Keep the prospect engaged with educational content leading up to the session. These include guides to key business metrics and questions to ask. 
• In the final emails leading up to the consultation, share customer success stories or provide a product capability overview. This gets the prospect excited to experience your product for themselves. 
• Post-consultation, send a consultation summary. Share the next steps and recommendations. 

The goal is to keep your leads engaged for as long as possible until consultations and product demos happen. This gives you a bigger opportunity to explain your business’s value. 

     3. Assess: The Evaluation Stage

During this phase, the sales team leads. Marketing handles the following:

• Developing trial signup forms, email templates, and landing pages to facilitate easy access to trial accounts. 
• Creating evaluative content, such as comparison guides and case studies, to educate prospects. 
• Monitoring marketing-qualified leads (MQLs) to provide insights into bottlenecks.
• Segmenting and nurturing trial users with targeted email campaigns.
• Running limited-time trial offers or promotions to incentivize usage.
• Conducting surveys with trial users to gather feedback on their experience.
• Retargeting those who do not complete trials with educational content to re-engage them.

For individual consumers, the evaluation stage is fairly quick. They sign up and try a product in minutes. The sales team’s role is to make the process seamless. They also proactively onboard and train the user and quickly address questions or concerns. For larger teams and enterprises, the evaluation is longer and more complex. It usually takes several weeks or months of rigorous requirements gathering, demos, and stakeholder approvals. Your business guides the prospect through a lengthy technical and business review, which includes the following:

• Scheduling discovery calls with all project stakeholders.
• Documenting detailed requirements and decision processes.
• Conducting extensive product demos and risk assessments.
• Providing trial access and training for the full team.
• Being available for technical troubleshooting during the trial.

A SaaS marketing agency shortens this stage in different ways. It initially offers trial extensions or limited scopes to accelerate decisions. It shares case studies from similar large clients. It works closely with the development team to create a robust security, compliance, and support product.  Overall, the evaluation stage sets the foundation for conversion and expansion. For organizations, a collaborative, consultative approach builds confidence in the solution.

     4. Closing: The Conversion Stage  

The closing stage is a make-or-break moment. It is the sales team’s last chance to provide value, alleviate concerns, and earn the customer’s trust before they make a purchasing decision. With long sales cycles, deals often fall apart at the finish line without diligent guidance. A SaaS marketing agency works closely with sales to avoid this by doubling down on engagement. Here are some ideas:

• Providing targeted pricing, package options, and onboarding plans based on the prospect’s needs.
• Addressing common objections, such as pricing hesitations and integration fears. 
• Quantifying returns and the total cost of ownership to showcase value.
• Compiling insights into prospect pain points and use cases during evaluation.
• Offering extended trials or pilots to make prospects comfortable.
• Developing executive relationships for internal advocacy.
• Following up quickly when trials end to capitalize on the momentum.
• Tracking vital metrics, such as sales cycle length and win/loss ratios.

You also need to align the steps with the funnel type. Consider the table below:

Type of Sales Funnel	Closing Description
Free trial	– Closing focuses on converting successful trial users into paying subscribers. Sales should monitor usage metrics to gauge engagement. – They might offer discounted annual plans or limited-time promotions to incentivize signing up. Testimonials from satisfied trial users who converted also help convince prospects.
Content upgrade	– Closing revolves around converting engaged leads who provide contact info for content offers. – Sales might schedule one-on-one demos or consultations to discuss needs. Additional content related to the product nurtures cold leads.
Direct sales	– Closing happens quickly after a limited initial engagement. The sales team must act fast. – Focus on fast follow-ups after initial contact and aggressive promotional offers. Aim to minimize the time between prospect awareness and closing.

Not all marketing efforts lead to sales. What should SaaS companies with non-converting prospects do? Closing still matters, even in this situation. You can use it to get valuable feedback to improve your product and sales funnel. Other strategies include the following:

• Keep engaging with valuable content and consider restarting the sales discussion in three to six months when needs or budget have changed.
• Provide special discounts, free trials, or limited-time promotions to incentivize reevaluation.
• Review packaging and pricing structures to ensure that they are simple and provide clear value.

     5. Retain and Advocate: The Loyalty Stage

As a SaaS company, you rely heavily on recurring revenues. This makes the loyalty stage critical for your scalability and survival. A well-developed strategy builds relationships and transforms some into passionate brand advocates.  In the retention stage, the focus shifts to delivering a stellar ongoing experience. Support teams provide comprehensive onboarding and regular check-ins. Data analytics studies support interactions and product usage. It also measures customer satisfaction to reveal pain points.  SaaS companies continually engage loyal users through beta testing, case study development, and reviews. They extend high-level executive briefings and C-level networking events to build brand affinity when possible. You can also get some ideas from these brands’ customer retention tactics:

• HubSpot provides exclusive training certifications. It also allows early access to product releases for power users through HubSpot User Groups.
• Dropbox has the Advanced plan, which offers team controls and app integrations. It also dedicates 24/7 support channels and alerts clients to suspected threats. Customers can also request additional storage.
• Mailchimp sends users customized tips and training content based on behavior to support onboarding and skill development.

Over time, loyal customers naturally become brand champions. Satisfied power users organically refer friends and colleagues. A SaaS marketing agency amplifies this through customer advisory groups and user conferences. It also develops tiered referral programs.  During the loyalty stage, the focus is to transition satisfied transactional customers into fully engaged community members. Doing this maximizes customer lifetime value. It also reduces churn and generates powerful word-of-mouth promotion.

Summing Up

A high-converting SaaS sales funnel does not happen overnight. The good news is that a good one generates and nurtures a steady stream of leads.  This article outlines the essential steps to maximize your demand- and lead-generation activities. It also offers tips and examples to give you more ideas on optimizing strategies.  Digital Authority Partners (DAP), an award-winning SaaS marketing agency, also improves the outcomes. We take a client-centric approach to sales funnel design. This helps us increase our clients’ online revenues by 27% and leads by 50%.  Contact us today to schedule a free consultation.