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Why Identifying The Correct Lead Type Is So Important To Your SaaS Business

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by Steli Efti


Among SaaS companies, there’s a common misconception about how and where to generate leads in order to feed your sales funnel. There are many ways to generate leads, but relatively few bring in high-quality prospects. The majority just clog and overburden your funnel.



Group of happy young  business people in a meeting at office



The ultimate goal of your marketing efforts should be to find the right audience for your SaaS, not to increase the overall size of your viewer base. Understanding your customers’ needs is integral to the success of your SaaS. In the same vein, understanding the nature of your potential customer is crucial for successful lead conversion.


Inbound or Outbound Leads?

Inbound leads represent prospects that are actively looking for a solution to a problem and have responded to your marketing activities with an intention to purchase in the foreseeable future. They represent a different potential customer than an outbound lead — a prospect who is interested in the content of your marketing efforts, but may not have the intent to purchase your SaaS. Both prospects represent different potential customers in the sales cycle and must be treated accordingly. If you focus too much on outbound leads, you may waste both marketing dollars and time that could be otherwise spent on more qualified prospects.


Marketing on Popular Websites

Heavily trafficked platforms with large general audiences are common marketing starting points. These include upvote sites, deal sites, social media sites and press platforms. This shotgun approach to lead generation often nets a high volume of unqualified prospects. If you are following this outbound marketing approach, focus on the appropriate subset of the site’s audience. For example, if your SaaS is a finance-related application for the travel industry, concentrate on sites and/or discussion threads focused on travel businesses owners, as opposed to travelers at large.


Understanding your current user base also help focus your SaaS’s outbound marketing efforts. It’s critical for narrowing the scope of your audience.


In analyzing your current customers, analyze the following to streamline your marketing activities:

  1. Who are your customers?
  2. What exact vertical are they in?
  3. How many employees do they have?
  4. What are the employees’ titles?
  5. What other tools do they use?
  6. Are they on social media (Facebook, Twitter, etc).
  7. If so, how many followers do they have?
  8. What other tools or SaaS tools do they use?
  9. Where are they located?


Customer surveys will allow you to identify common pain points, concerns and subsequent sites where your target audience tends to congregate. In the previous example (a finance-related SaaS for the travel industry), marketers may find that their customer base uses LinkedIn as a primary form of networking among their travel businesses-peers, or that a particular niche site is popular for travel business-owners seeking advice on how to run their firms. Understanding your current customers will allow you to direct marketing campaigns more effectively at the right audience, which will result in a higher number of conversions.


Improving Your Inbound Lead Generation Strategy

The following are examples of effective strategies for attracting and capturing quality inbound leads:


  1. Hosting helpful and insightful blog content with frequently updated articles
  2. Lead capture forms with free e-book and white paper downloads
  3. Webinars featuring industry thought leaders addressing relevant topics and/or concerns
  4. Sharing useful, industry-specific content on social networks


A qualified, inbound lead worth mentioning is the referral: Someone who has received word of your company and is already quite interested in your SaaS offering. Finding the good lead has been done for you, and your popularity is spreading among true potential customers.


The end goal of all inbound marketing activities is to create and deliver constant value for your potential customers. Showing that you understand their needs naturally makes selling your SaaS easier. There is no better way to do this than by providing free content to engage them in further conversations.


In short, inbound and outbound lead generation will have different results in terms of volume and quality. Since the end goal is to find people who are a good match for your SaaS solution, you should narrow the initial, widest lip of the marketing and sales funnel as much as possible. The goal is quality, not quantity. Understanding your customer base will not only ostensibly lead to building a better SaaS, but will also help in generating the most effective marketing campaigns. Better conversion rates and more customer successes hinge on finding the appropriate audience for your SaaS and creating the most value for them, whether that be before or after the sale.



Steli EftiSteli Efti is the co-founder and CEO of and an advisor to several startups and entrepreneurs.


Originally published by StartupCollective.


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