5 strategies to lower CPA for SaaS companies while keeping sales high
Here, you’ll find:
- Why PPC isn’t the only way to keep CPA low
- How content, SEO, and landing pages can help lower CPA
- Why audience targeting is crucial (and not just on Google)
- Reasons why you should also measure LTV
Sure, a productive tech company’s office needs things like pens, paper, and sticky notes. (Oh, and snacks — don’t forget the snacks). But at the end of the day, digital rules all. It’s what lives at the core of these businesses — and that includes software as a service (SaaS).
Whatever their market and target audience, SaaS brands create software to solve a problem. Because of this, it’s likely that digital marketing and paid search have been part of your core business from the start. But, no spoiler alert here: as your business changes, so should your digital marketing strategies.
One metric you’re likely familiar with in your SaaS paid search strategy is the cost per acquisition (CPA). Also called cost per action, CPA is defined as an online advertising payment model in which payment is based solely on qualifying actions such as sales or registrations.
Many SaaS companies only associate PPC or paid search with improving cost per acquisition (CPA). And while you’ll find a wealth of information linking the two, it’s worth noting that these things are not mutually inclusive.
If you’re a SaaS company focused on CPA over cost per lead (CPL), you’re already ahead of the game. Many businesses get too hung up on low CPL. But even if an ad doesn’t bring in a ton of leads, if the conversion rate is high, you know you’re doing something right.
Lowering your CPA is a broad-based task. PPC is just one tool available to help you accomplish this. As you’ll see, there are other digital marketing strategies that you can also leverage that’ll help you bring in new business without breaking the bank.
1. Leverage good ‘ole SEO
With new online marketing trends cropping up nearly every day, it can be easy to overlook the effectiveness of good old-fashioned search engine optimization (SEO).
This isn’t meant to downplay the complexity of this style of marketing. Rather, it’s to remind you that you don’t need to overhaul your content in order to make it a solid tactic for attracting new, high-quality leads.
By simply understanding search engine algorithms and how to mold your SaaS content to better accommodate them, you eliminate the need to rely solely on developing new advertising campaigns. By learning to master the intricacies of SEO, you can enjoy benefits such as:
- ‘Evergreen’ sustainability
- Greater ROI
- More leads and sign-ups
- Free or inexpensive traffic increases
- Increased authority in your industry or field
For SaaS companies, in particular, gating content is a great way to generate leads. However, it doesn’t do a whole lot for your SEO since the content isn’t publicly available without filling out a form. Content marketing can still be a big boon for your biz, though (we’ll get to that in the next section), whether or not it’s indexed for SEO.
2. Focus on quality content marketing
In the world of internet marketing, if SEO is what brings them in, then good content is what keeps them around. Rather than understanding how the search engine ranking system works and manipulating it to work in your favor, content marketing is about understanding your customer base and tailoring your content to them.
However, knowing your customers entails a lot more than just having their names and email addresses on file. You need to understand what really makes them tick when it comes to doing business, such as their:
- Buyer personas and backgrounds
- Problems and pain points
What makes SaaS content marketing such a cost-effective method at improving your CPA is that you already possess most of the information needed to improve your content. A thorough analysis of your sales history and the feedback provided by customers will give you a wealth of information on what content and topics really hook customers.
It’s also worth taking the time to see how your competition stacks up in the content marketing department. Which topics are they outranking you on, and how are they doing it? Identify content gaps and see how you can leverage them for your own brand’s benefit.
By highlighting new trends and innovating ways to help your audience, you can start building the relationship and brand trust. See what you can learn from your competitors in the SaaS space, then determine how you can beat them at their own game. (In your own voice and without plagiarizing, of course.)
Add into that a detailed analysis of keyword trends and their conversion rates, and content marketing allows you a virtual sneak peek inside of customers’ heads without them even knowing it.
Understanding just how to use SEO and content marketing to bring new visitors to your site is key if you hope to see high conversion rates from your organic traffic.
3. Optimize your landing pages
In case it wasn’t already apparent, we’re big fans of landing pages around here. That’s because we know it’s a solid way to take a user from an organic search result, paid search ad, or marketing promotion straight to a specific page on your website with a clear call to action.
An optimized landing page can be a major key to your digital marketing success, particularly when the competition is stiff and the cost-per-click (CPC) is high. A few ways to ensure yours are optimized include:
- A killer headline
- A consistent message
- A mobile-friendly experience
- A thoughtful design
Experts know that designing your landing pages to have a specific purpose and drive a particular action will help boost your conversion rate.
Plus, a lot of SaaS lead capture campaigns represent just the starting point. Once they’re in, you can work your lead through an email drip campaign or additional display remarketing that serves up something like a free whitepaper download. These follow-up efforts are natural areas to iterate on and optimize.
4. Find your audience
Google’s audience tools are great for targeting users in the consideration stage. You want to get your SaaS product in front of people who are looking to buy what you’re selling, are similar to an existing audience you have or are researching one of your competitors.
Using Google Ads audience targeting to pinpoint or even just “observe” these users can be highly valuable and help you lower your CPA. Just don’t forget to perform regular testing so you can be sure you’re aiming in the right places.
But this doesn’t just apply to Google. Demographic targeting and ads on the main social media platforms (Facebook, Twitter, Instagram, and LinkedIn) are great methods for meeting your prospects where they are.
Connect with these users through offering high-value content that shows you’re a thought leader and leads them right to (you guessed it) an eye-catching landing page.
5. Don’t forget about lifetime value (LTV)
CPA is no doubt a crucial metric for SaaS companies. But to get a full picture of your digital marketing ROI, you should also be looking at LTV.
Many SaaS companies operate on a subscription or annual contract level, meaning the transaction isn’t a one-and-done deal. Looking beyond the initial CPA can tell you much more about the actual value and ROI of your efforts.
For example, if your customer refers two other businesses who end up purchasing your product, you’ve just saved money by not having to use marketing to gain that business. The LTV can also be affected if your customer re-ups their contract for 2 years at once.
The Balance Small Business explains that a simple way to break down this number is through the following formula:
LTV = Lifetime Customer Revenue – Lifetime Customer Costs
For SaaS companies, there’s no shortage of data — the key lies in translating all of that noise into a cohesive and useful narrative.
Combine these marketing strategies with a successful PPC campaign, and you can immediately see your site quickly transform into a powerful (and efficient) sales tool.
We’ve helped plenty of clients strengthen their online presence and achieve a greater ROI from their marketing dollars. Looking to join the ranks? Let’s chat.
This post was originally published in September 2014 and was updated in November 2019.