Inflection 3: Mistakes I’ve made in selling SaaS products

Inflection 3: Mistakes I’ve made in selling SaaS products

Dylan Touhey

This is the third post in my "Inflections" blog series where I lay down hard truths and remedies for SaaS marketing.


I began my career in the affiliate space as an account director for Commission Junction, the world’s largest affiliate network. I worked for big brands like Adobe, RealNetworks, BlockBuster, and Verizon. The way it worked was this. A big brand gave you $100,000 to spend on media. And the end of the month, they expected $150,000 back. 

Your advertising had to make money

This experience shaped me. It is the single principle I believe: marketing must be measured in revenue. Agencies that don’t do this typically struggle as clients see their services as a cost, not investment. Anyways, I made those big brands a lot of money. I was good at it. Direct response advertising is still my favorite area of digital marketing. That’s the happy ending. I learned valuable skills, clients made a lot of money, everybody won. 

Growing up 

After I left Commission Junction and started One Net Marketing, I learned something very quickly. The tactics that work with big household brands often don’t work with small to medium-sized companies and startups. When I first started working with SaaS companies, I had less than stellar results with customer acquisition. I lost my first clients a lot of money. After a while, I discovered a simple formula. Most marketers I've found that go from selling big household brands to helping launch new SaaS companies or sell unknown vendors also make this mistake. 

Don’t use direct benefits 

Most SaaS companies will copy a lot from their larger competitors. So, if QuickBooks has ads that say “easy billing software” a smaller competitor will create an ad that says “simple invoicing software.” This is a pretty big mistake. The reason is that by copying the big brand ad, you are forgetting that unlike your company, the big brand has things you don’t. Namely, prospects trust them, have heard of them before, and have likely seen and heard their name hundreds of time. They have established trust and authority. You do not. This was the best practice that got me into a lot of trouble after I went from driving traffic and sales to massive brands at Commission Junction to working with smaller and less-known SaaS products and sites. I tried to sell products with simple direct benefits (“unlimited music” or “lowest price guarantee”).  

Instead, try the indirect approach The simple rule is that if your prospect has never heard of your company, you need to slow down. Often an indirect approach--such as using curiosity, emotion, or an unexpected headline--is the best way to go.  

The worst--and most common mistake SaaS companies fall into--is to go copy the major players in their industry. For example, if you offer a file transfer solution you might be tempted to copy Dropbox’s website and copy. 

Our copywriters map out the five different stages in a buyer’s journey that they use when planning SaaS customer acquisition campaigns. We can’t cover this topic in depth today but as I’ve progressed I also realized that the stage of your market dictates the type of selling that works. 

For example, a very mature market will almost never respond to a direct benefit. A direct benefit would be something tied to a basic feature or desire in the market such as "easy payroll processing."

The reason is that as markets mature, the early features that built companies become expectations by customers. Everyone starts saying and offering the same thing. Once this happens, branding and emotional positioning become the biggest differentiators, even in SaaS and tech. 

An example of a software company doing it right is YNAB.com, a budgeting software product. They know that the market for budgeting software is very crowded and mature. What new feature could you possibly offer when there are hundreds of solutions offering "simple budgeting software," "mobile access," and "easy notifications"?

Instead of chasing a new gimmick or feature that isn't connected to the core value that budgeting software offers (money in, money out), their positioning focuses on emotional support. 

The headline plastered on their website is: “gain total control of your money.” Their founder says that they haven't been able to beat this headline. 

For right now, the important thing is this: are you using a direct approach (straight, benefit-orientated headlines such as “simple, easy software, try it now”) or an indirect approach? I recommend A/B testing these two approaches against each other. 

Bonus tip: Any serious marketer should follow the weight-loss market. As one of the most competitive industries in the world, when a new competitor breaks into the market and builds sales, study their method. For example, the Insanity product by BeachBody, one of the rising stars, focuses all on emotion with their “dig deeper” positioning. They don't sell easy weight loss or simple secrets. 

They preach hard work and extreme self-mastery. As their success shows, product positioning needs to do two things. 

First, your marketing message needs to relate to something that already exists in the mind of the market. In the case of Insanity, the context was that the market thought "easy solutions don't work, weight loss and exercise gimmicks are all all hype." Insanity didn't invent this sentiment. They found it in the market and then exploited it. 

Second, the market dictates everything. Best practices (like keep it simple or talk about benefits, not features) only work when you consider the stage of your market and your audience.