7 Ways to do Drip Marketing for SaaS
It’s no secret that email is the most effective acquisition channels for any marketer. In fact, according to Campaign Monitor, for every $ 1 spent, email marketing generates $ 38 in ROI.
But with all the noise today, it’s getting harder to get noticed. Today, it’s not enough to send the right emails; you need to send the right emails at the right time.
And that’s exactly why smart marketers rely on drip marketing.
This post will cover how many of your favorite SaaS companies use drip marketing to generate leads, convert customers, and more. Plus, how you can apply their strategies in your business, too.
Let’s get started.
A Primer on Drip Marketing
In the 1990s, Eaglemoss Publications introduced a new bimonthly magazine called Real Robots. Despite little publicity, the magazine took Britain by storm. Every two weeks, readers got new parts to build a fully-functioning robot named “Cybot.”
The concept was brilliant: with each issue, you invest more of yourself into the finished product. After ninety-six issues and over a year of building, you would have a real-working robot. Who wouldn’t want that? Put another way, who would be foolish enough to cancel their subscription after they already sunk cost?
Much like a partwork magazine subscription, drip marketing involves “drip” feeding content to recipients over time.
More specifically, email drip marketing involves delivering the right content to the right recipient at the right time based on how a user interacts with your brand and where they are in the sales cycle.
This strategy is particularly effective with SaaS because there’s room for ascension. Unlike e-commerce, where the goal is to convert a visitor into a customer and then a repeat customer, SaaS has several opportunities to move customers up through several pricing tiers.
For example, if you’re using tied pricing and close a prospect on a “beginner” plan, over time, you have the option to close them on a higher tier (depending, of course, on their use of your product/service). The more successful they become using your product/service, the more likely they’ll upgrade to the next tier. The more value they get from you, the more you get from them. Win. Win.
As you can imagine, when automated, drip marketing relevant emails to customers who want to upgrade is a no-brainer for marketers. It’s no surprise, then, automated emails get 152% higher click rates than broadcast emails.
7 Must-Have Drip Campaigns for SaaS Marketers
There are many types of drip campaigns depending on your conversion goal. Pardot does a particularly good job of highlighting many of them below:
While the above offers a good starting point, SaaS is more advanced. Unlike e-commerce, you need to have emails that nudge prospects through each stage of the funnel. Further, you need to ensure you always nurture your relationships once they become customers.
This article will focus on converting a customer through several stages of the buyer’s journey by focusing on seven key emails, from activation to retention to reactivation:
- Churn Prevention
- Involuntary Churn Prevention
Let’s look at each in more detail.
If you’re like most SaaS marketers, you’re using content marketing as an acquisition channel. If you are, chances are you’re using a lead magnet to capture visitor email addresses.
The problem, though, is not everyone who opts-in to your site is problem-aware. Nor is everyone a right fit for your product/service, to begin with. The goal, of course, is to turn visitors into subscribers and later into customers. But with users at different stages of the buyer’s journey, it’s challenging to invite users to try your product/service without annoying those who aren’t yet ready.
One workaround is to segment and prioritize subscribers based on how they engage with your content. The more engaged users are, the easier it is to segment and prioritize them, and the more likely they’ll begin a free trial.
At Sleeknote, we invite subscribers to segment themselves in our welcome email:
Segmenting early allows you to move your ideal buyers to nurture campaigns (like starting a free trial) rather than build goodwill through content and potentially forgo a conversion opportunity.
For example, if your ideal buyer is an enterprise customer, you want to nurture them than, say, a beginner. While the former learns more about your product/service, the beginner learns, through strategic content, why your offer solves a problem they don’t even know they have yet.
Of course, Not everyone who opts-in will begin a free trial right away. But that’s okay. If you’re playing the long game, you can drip feed new subscribers content geared toward their needs and interests. Within each email, in the footer, you can include a soft call-to-action to try your product/service.
Here’s an example from LemonStand:
Unlike other emails found below, it’s good practice to have several activation emails in your drip campaign, each touching on different goals or pain points of your ideal buyer.
Take CoSchedule, for instance. They recently invited me to try their software by focusing on two contrasting values. In one email, the focus on moving me toward pleasure (saving time):
While in another, they focused on moving me away from pain (not getting burned by competition):
As always, how you position your offer will vary depending on your product/service. But it’s good to cover as many bases as possible. If you don’t touch one value in one email, you always have another chance to do it in a follow-up campaign.
Takeaway. Try to segment new subscribers as soon as possible. Then, prioritize them based on how you’re scoring leads. Don’t forget: not everyone will be ready to begin a free trial. When onboarding, remember to address your audience’s core goals and challenges. Then, leverage your offer as the solution they’ve been looking for.
Have you ever bought something only to instantly regret it? If so, you’re not alone. Buyer’s remorse is a real concern for marketers. In fact, many take preventative measures against it.
Years ago, direct response marketers found a clever way to ease customers into their new purchase. Here’s how it worked: When a product a customer bought arrived and they opened the box, inside, right at the top, was a letter thanking them for their purchase. But, for marketers, it had a very specific purpose: to resell the customer on why they bought the product, to begin with.
Sadly, this practice has quietly disappeared. Granted, many companies thank new customers with their onboarding email, but few take the time to ease post-purchase buyer anxiety.
One company that breaks that pattern is BuzzStream. I recently became a customer, and when I did, they took the time to remind me of how much their offer would benefit me:
Giving customers action items to get started was another classic feature of the stick letter. But the same is applicable to email. Notice how Buzzstream has links to tutorials to invite customers to start right away. It’s the perfect antidote minimizing buyer’s remorse and reminding customers they made a sound choice in their purchase.
Takeaway. Always welcome new customers, but remember to remind them they’re in the right place. Your product is for them and will help them achieve a goal or overcome a challenge they’re experiencing.
So far, we’ve looked at activating free trials and welcome new customers.
Growth is good, of course. You want to reach more people. The problem, though, is as your company grows, so, too, does your churn rate.
With negative cash flow, you need more customer revenue to replace that which is churned. But customer acquisition is expensive. In fact, according to InsightSquared, it can cost you anywhere from 5-25 times more to acquire a new customer than it does to keep an existing one.
How can you avoid stagnation? Focusing on what’s David Skok calls “negative churn”.
[Negative churn] happens when the expansions/upsells/cross-sells to your current customer base exceed the revenue that you are losing because of churn.
In other words, if you increase the average customer spend of your existing customer base, you can recoup lost revenue.
One of the most effective ways to do this is to upsell existing customers to a higher tier. ExpressVPN recently tried to upsell me to an annual subscription after I became a paying customer:
There are a few important takeaways from their email. First, the upsell is cleverly disguised as a savings opportunity. We’re loss averse. We prefer avoiding losses to acquiring equivalent gains. So if there’s a chance to save money, we’ll take it.
Second, it’s super specific. It tells me exactly how much I will save every year. As Alex Birkett writes, “You should seek to eliminate as much ambiguity as possible”. If your customers don’t know exactly how much you’re saving, why would they take action?
Third, it illustrates their tiered pricing to position the annual subscription as a superior choice. The Economist is famous for employing this tactic, known as the decoy effect, in their pricing.
Like many of the email campaigns in this article, the effectiveness of upselling is based on when it’s sent. If you can see a customer is using your product, not reminding them of a way to save money is doing them a disservice.
This is especially relevant for customers who have upgraded and downgraded several times. If there’s a workaround to prevent them from churning, you need to address it. Favro recently tried to upsell me after I downgraded my account:
Be warned, though: upselling for the sake of it can have an adverse effect and cause churn. Use it wisely.
Takeaway. Upsell customers to an annual plan if they’re frequent users of your service.
4. Churn Prevention
When customers neglect your product/service, they’re likely to forget they’re paying for it. When do, chances are they’ll cancel when they receive their monthly invoice.
As John Warrillow writes in The Automatic Customer:
Your biggest competitor for your subscription business is not the rival service; it is your customer’s inertia in not using your service.
The goal, then, is to invite users to interact with your product/service as often as possible. Or, put another way, to make them “sticky.” According to Warrillow, a customer is “sticky” when they buy your product/service, engage with it often and recommend it to others.
One way to make users “sticky” is to remind users of the benefits they get from your product/service. This is often done on your company pricing page. But rarely is it reiterated through each stage of the marketing funnel. And, yes, that includes retention.
Zapier reinstates the benefits of their paid plan every month when they invoice customers:
Like many SaaS companies, Zapier knows invoicing can trigger cancellations (especially if users are inactive). So they maximize every opportunity to reinforce the value they’re customers are getting from their product.
Takeaway. Prevent churn by “stacking” value with each email through each stage of your marketing funnel.
5. Involuntary Churn Prevent
So far, we’ve looked at how to reduce voluntary churn by making customers “sticky”. But what about involuntary churn? According to research by Recurly, an average of 13% of recurring revenue transactions are declined each month. Not because customers aren’t enjoying their subscription, but because their card expires.
While it’s tempting to believe only disengaged customers will forget to update their details, it’s important to remember even the loyalist of brand advocates need the occasional reminding. With that in mind, managing decline by preventing cards failure is a high priority for any SaaS marketer.
One obvious way to do that is to notify subscribers immediately after their card declined. Kissmetrics have a series of emails in their drip campaign to address this very problem:
If you want to go one step further, you can flag certain accounts with upcoming card expirations. Invision do this to notify users before their card expires.
Takeaway. Anticipate accounts with upcoming card expiry dates and reach out to them before to reduce involuntary churn.
Not all onboarding emails are about converting subscribers into customers. Every now and again, it’s good practice to ask something of your audience. With enough goodwill through free content and other resources, you’re within your right to call in the occasional favor.
Using a tool like Delighted, you can gather actionable feedback from your customers and use it to improve your marketing. Many SaaS companies opt for this very approach. One benefit is it requires minimal investment from the recipient. All that’s needed is a single click and a company can get immediate feedback on whether what they’re doing is serving their audience.
Hunter even approximates how long it will take to increase compliance:
Of course, asking for feedback isn’t the only request you can make. Asking for reviews is an effective way to build social proof and further your relationship with your audience. Casper often asks new customers to review their products:
Rather than asking for a review with no context, Casper has an “if/then” approach: if you’ve got value from our product, then write us a review. Granted, it’s a subtle justification, but it’s effective.
Is there a perfect time to make a request? Well, that depends. Asking too early can result in few completions. After all, if the user hasn’t had time to familiarise him or herself with your product/service, why would they review it? By contrast, leave it too late and you risk getting nothing in return. A good rule of thumb is after purchase. Users have recently taken action and they’re likely to take it again (if it’s a fair ask).
Takeaway. Don’t be afraid to ask your customers for a favor once you’ve built enough goodwill.
It’s a reality all marketers have to face: Users churn. And no amount of onboarding in the world can prevent it. But that doesn’t mean you can’t reactivate former customers after they’ve churned.
A quick story…
A few years ago, I was a Leadpages customer. I enjoyed their product/service, but my circumstances changes and I canceled my subscription.
About a year later, I received the following email:
While I didn’t reactivate my account, it did nudge me to revisit their site and review their new features. Had my circumstance been different, I would have reactivated my account.
Emails like the above reiterate an important reality: Just because a customer churns, doesn’t mean they churn for good. Some users churn because a feature they needed wasn’t available at the times. Others, churn because they weren’t at a place when they could fully leverage your features.
Whatever the reason customers churn, have an email in place to reach out to them one, three–even 12 months after they churn to invite them to return. It won’t always work, but there’s no harm in trying.
Takeaway. Survey churning customer on why they’re leaving. Then, write an email that addresses each objection. It doesn’t always work. But when it doesn’t, customers will thank you for it.
Drip marketing is a highly effective way to nurture inbound leads and drive higher conversion rates.
The above emails are a good foundation to build from. But ultimately, you need to experiment with which emails, intervals, and events work best for you. Some, like involuntary churn prevention, will have urgency for obvious reasons. Others, like making a request, will vary depending on your goal and how frequently you’re emailing your audience.
If you can do that, you can rest in the knowledge you have a predictable and repeatable marketing engine for years to come.
Which of the above emails are you using in your marketing? Leave a comment below.