The SaaS Marketing Funnel

A SaaS marketing funnel is a marketing or sales funnel for a SaaS product. It is also called the SaaS sales funnel.

A basic marketing funnel has four stages: Attention, Interest, Desire, Action (AIDA).

First, you get a prospect's attention.

Second, they show interest in your product.

Third, they desire your product.

Fourth, they take action and purchase your product.

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Sales and marketing funnels outline the process for turning prospects into customers. The funnel lays out the step-by-step workflow or customer journey. A good funnel is not an afterthought - it is the backbone of your sales and marketing processes.

A marketing funnel exists in any product or service company, but there are some unique aspects to the funnel for a SaaS business (or any subscription business, for that matter) which I will cover here.

Overview of the SaaS Marketing Funnel

The SaaS marketing funnel is somewhat different from the AIDA model above, mostly because it is not just a one-time purchase by a single individual.

What does the SaaS marketing funnel include?  It should outline the main stages that a prospect goes through from initial touchpoint to sale to customer support.

Realize that for a SaaS business, the funnel does not end when you make the sale. The final stages of a SaaS funnel - retention and advocacy - are critically important to a healthy SaaS business model.

The SaaS marketing funnel can be represented in five stages, which the customer moves through in their path from prospect to long-term happy client:

  1. Awareness - the prospect is first made aware of your brand;
  2. Consideration - they are interested and may be considering your product;
  3. Decision (sale) - they sign up;
  4. Retention - they remain a customer and continue to subscribe;
  5. Advocacy - they are fully engaged, love your product, and refer others.

Why You Should Care about the SaaS Funnel

A high-performing funnel is fundamentally important for SaaS businesses. Why? Because the SaaS business model relies on satisfied customers that continue to subscribe, not one-time transactions. 

Without a well-planned funnel, you don’t know where in the pipeline prospects are dropping out, or even whether you have a positive ROI on your marketing efforts. Basically, without a funnel you are shooting in the dark.

A good funnel not only increases conversions and drives sales, but also gives you important information about the end-to-end customer lifecycle, and the customer journey on your website. This is critical data you can use to optimize your sales and marketing. 

In addition, your SaaS marketing funnel helps you identify points of friction in the customer journey - at what stage in the funnel are you losing customers?

Plan Your Marketing Around the Funnel

Your funnel is the backbone of your marketing programs.

Each marketing tactic should map to one stage of the funnel, with the objective of moving the customer on to the next stage of the journey. Thus, your SaaS marketing funnel helps you prioritize which marketing activities you should be doing, in which order.