There are many aspects to a growing a successful SaaS business. Internal organisation, role responsibility and competent operation of the functional areas like finance and support are all pretty important. Before they consider injecting capital, pretty much any investor is going to make sure they are happy with how the business is structured and operates (or how it will operate).
However, a key objective of attracting capital is the need to power the delivery of new growth. The marketing function is critical. Inevitably any investor worth their salt is going to take a keen interest in the chief tool for organising the marketing effort – the marketing strategy document. (You do have one, don’t you?!)
What should be in the marketing strategy
The quality of marketing strategy documents varies enormously. Often this reflects the time, effort and budget that has been put into creating the content. However, when it comes to what goes in it, should you ask 10 marketing directors what they would put in a strategy doc, the topics covered would be much be the same from all of them.
SaaS marketing strategy: What are the key numbers to include
Critically, investors want to know how much budget is required and how you’ll spend it.
To arrive at the numbers that are indicative of the budget, you need to include the key numbers in the business, such as.
- The cost per acquisition (CAC) of a customer
- Monthly recurring revenue (MRR) and annual recurring revenue (ARR) targets
- Lifetime value (LTV) of each customer
- Work out CAC:LTV ratio and show the ROI
You have to be explicit; as an example, it maybe you are a startup so need to express the need to hit £20k MRR to prove minimum viable product (MVP). You can then set a target of say £100k MRR as a next stage and work towards numbers that are indicative of the marketing budget, you’ll need to achieve it.
Investors need to understand these numbers and how you’ll hit them. It is the need for this understanding that underpins the creation of the document: This is the main point of having a strategy in the first place.
A checklist for creating a strategy
- The business – the background to the company. Feel free to sing about your Eureka! moment and outline the journey of how you got to where you are now.
- Marketing approach – decide on your approach to marketing – is it inbound or outbound? Will you create a lot of content or just hit the phones?. What about taking a thought leadership position? If you have an industry luminary on the team, what about presenting at events and seminars, or by-lined article placement?
- Targets – what are your goals? This may be a certain number of customers or MRR by a certain date. What goal do you need to hit to start to think about the next stage?
- Competitors – list and examine your competitors. Understand their capabilities and identify where you have competitive advantage. Tabulate and avoid long prose – make it easy for anyone inspecting the marketing strategy to understand the lie of the land.
- Target market – clearly identify the market(s) area(s) you are targeting. Be clear, identify the industry, the size of companies (by turnover/employee numbers) or demographics and any geographic boundaries.
- USP/positioning – think about visualising the competitive landscape by drawing up a positioning chart comparing how each competitor is positioned against your company and each other. (Taken together along with competitor and target market information, the aim is to give a realistic appraisal of the competitive landscape that an investor would agree with.)
- Key messaging – the words, as seeds of thought, that are going to engage the influencers and decision makers in your target market. The messages that are going to cut through in the noisy world out there and attract people to trial or signup for your SaaS product(s).
- Website plan – make sure you include the plan for your presence on the web. Where the website is now, and the roadmap for how it’s going to be developed. The integration of tools such as Intercom and HubSpot to centralise the website as a marketing hub.
- Marketing action plans – for all channels, include a channel-by-channel breakdown of your plans for activity in each channel; PPC, content, email marketing, social and so on.
- Month by month plan – show the tactical planning for marketing activity in each channel. Demonstrate joined up thinking around campaign planning. Conceptualise and be creative. Co-ordinate activity across channels to show a joined-up approach to executing marketing activities.
- Budget – perhaps the most critical thing in convincing investors of any type – Angels, PE and VC – is competency with financial matters and demonstrating a realistic grasp of any numbers around the budget for carrying out marketing.
- Who executes marketing – you might have in-house resource if you have all the skills and expertise inside the business; typically however, outsourcing to an agency is a more common approach. In some cases, a hybrid model might be used, where marketing direction comes from an internal marketer who manages freelance or agency activity required to deliver the month by month plan.
A final word on the numbers…
We really can’t stress this enough. Investors need to understand that you are good around money matters. Be sharp on the numbers you’ll hit, and how you’ll hit them.
When you watch Dragon’s Den or Shark Tank it never fails to amaze how some people limber up looking for investment and can’t give a good account of themselves when discussing the key numbers. Many flounder with the basics because they’re just not good with numbers; some are clearly trying to fudge it, but others look like they’ve just flown in from cloud cuckoo land – they are too unrealistic.
When you go looking to court investors, think like a Dragon; be certain, confident and realistic. Or you run the risk of looking like a reality TV entrepreneur that wants the ground to open up and swallow you because you have just been verbally nailed to the floor by a Dragon or a Shark because of your failings around money matters…
Need help creating a strategy to impress investors?
Should you not have the skills, time or resources within your SaaS venture to create an investor winning marketing strategy, why not get in touch? We’ve got a decade of experience of working with SaaS businesses to help them flourish, grow and achieve their objectives. We’d be only too pleased to help. Get started with a free consultation.