The Biggest Leakage in a SaaS Marketing Funnel and How to Fix It

Many SaaS and Internet service companies offer free trials or freemium services. Accordingly, in the product database, there are users in various stages: trial, freemium, and paid.

What happens, more often than not, is that the nurturing of these users is done by the product team, not the marketing team. And that isn’t just a problem that’s isolated to just small or unsophisticated companies. Even large companies with an extensive marketing technology stack and a mature product still operate with such a disjointed process.

We’ll discuss in this article why this is an issue, what’s the root cause, and how to fix it.

Why Nurturing of Free Trial and Freemium Users Is Important—and Should Be Done by Marketing

Marketing spends money and effort to convince a prospect that the company’s product is useful and unique. Having a prospect commit the time and resources to take part in a free trial or freemium offering is a significant step in the buyer’s journey. These middle-of-the-funnel prospects are highly valuable and must continue to be nurtured to ensure a high conversion rate into paid customers.


On the other hand, the ability to renew and upsell customers is critical to the success of any SaaS business. Thus, in recent years, Customer Success has evolved into a major function within SaaS companies. Sales and Marketing no longer stop when a prospect becomes a paid customer. In fact, there is a strong argument for not even using the term “closed” to describe the event when the prospect becomes a paid customer. A more descriptive term is “committed.”

Therefore, to maximize success, Marketing should continue nurturing paid customers to ensure they expand usage; and, at the appropriate times, Marketing should execute upsell campaigns, especially when users run up against paywall boundaries (for example, features not available at the current level of subscription).

Nurturing users is a critical part of moving buyers along their journey, and nurturing must be handled by Marketing to ensure consistency in execution with all the advanced engagement technology at its disposal.

Why User Nurturing Is Broken

Considering how important it is to nurture free-trial, freemium, and paying users, it’s surprising that more than half of the SaaS companies we’ve worked with at my company opt to leave important nurturing and upsell tasks in the hands of the product team. And, often, that process is broken—in two ways:

  1. The user database for the product isn’t synced with the salesforce automation and marketing automation platforms.
  2. The users’ activities in the product are not visible in the marketing and sales systems.

As a result, the following types of broken engagements are commonplace:

  • Marketing continues to market to paid customers as if they’re prospects.
  • Nurturing campaigns are out of sync with the user’s progression in the buyer journey.
  • Prospects with multiple user accounts are treated as separate individuals and receive duplicate and potentially conflicting communications.
  • Marketing is unable to rescue a prospect who is struggling from the trial/freemium experience.
  • Marketing is unable to rescue a customer who has reduced or stopped using the product.
  • Marketing is unable to upsell to a customer who is running into paywall boundaries and is getting frustrated.

The root cause of this disjointed nurturing process is a data problem. To bridge the gap in the buyer journey, a SaaS company must have the ability to…

  1. Sync user data from the product to the lead/customer database with CRM systems
  2. Export user activity data from the product to the marketing automation platform

For companies that have successfully achieved integration, it’s typically done by having the product’s engineering team write code to push data. But that approach has significant operational challenges:

  • The code is typically part of the product, so any change needs to be part of the product release cycle, usually a quarterly process at best. Thus, any change takes 3-6 months of lead-time.
  • The integration is fixed, leaving Marketing with limited flexibility to fine tune and experiment with different event triggers, timing, and feedback loops. The long lead-time required to make changes also exacerbates the problem.

How to Fix It

Here’s the nine-step blueprint for a scalable and flexible solution that puts the user nurturing process back in the hands of Marketing, where it belongs:

1. Have your product engineering team write any and all interesting events into a log file. This process is likely already taking place, but it’s good to verify which events are available.

2. Have your product’s user database made available via API, file, or direct database access.

3. If your product team is using a third-party user buyer’s journey management tool like WalkMe or Pendo, get access to the log/event files from these tools as well.

4. Ask to have these log files automatically delivered to a repository (e.g., Google Drive, FTP server) on a scheduled basis: the more frequently, the better, but at least once a day.

5. Use a data automation tool like Openprise (disclosure: I’m the CEO and founder) to aggregate the following:

  • Your product’s user database
  • Your product’s activity logs
  • Third-party user journey product logs
  • Lead and customer databases from marketing automation and sales automation

6. Use the data automation tool to clean, standardize, correlate, and deduplicate the user data from your product database and the prospect data from your sales and marketing databases.

7. Pick the activities and events from the activity logs that are meaningful for nurturing or risk mitigation.

8. Use the data automation tool to import these meaningful activities into your marketing automation platform as custom activities/tasks.

9. Create campaigns/triggers/workflows to nurture users, mitigate churn risk, and identify customers poised for expansion.

* * *

With such a system, a SaaS company can ensure its nurturing and upsell campaigns are consistently successful across the entire buyer’s journey, from initial contact through the trial/freemium phase to post-commitment.



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