Why Companies That Don’t Optimize Their SaaS Conversion Funnel Fail?

Are you running an SaaS business and looking for a cost-effective yet brilliant way to expand it? Well, take a hard look at your SaaS conversion funnel, because instead of working like a passage and pushing your customers further, it has become the bottleneck.

When to take a step back and revisit the SaaS conversion funnel you’ve have been neglecting?

  • You aren’t getting customers that you need
  • Your customers are different from your targeted group and lead to dead-ends
  • Your SaaS product or service hasn’t really taken off despite tremendous potential
  • Your digital marketing game is up there, and your onboarding process is smooth, but you just aren’t signing people up
  • The sign-ups are active, but paid subscriptions are lowest than ever
  • The traction is happening, customers are willing to try your SaaS product, but conversions aren’t kicking off.

All of these are a sign that you have got yourself a leaky funnel and you need to fix it.

This doesn’t mean it’s time to panic. Make sure you avoid:

  • Walling up the interested customers with a reduced trial version
  • Slashing your prices or with random giveaways of freebies

Instead, start with a robust approach to get closer to your customers. We suggest you take a few steps back and find the answers to “who are your ideal customers” and “are you even reaching out to them”? Do they know about you? Do they care if your SaaS offering is going to turn their life upside down? You can’t expect to be a partner of your customers on their digital journey if you don’t know them or their expectations and needs.

Therefore, it’s important to go back to the start. Time travel, if you have to!

An SaaS business is a company that offers a digital software product to its customers.

So, like a traditional business, your product’s sales funnel too has several steps which can be broken down into: Engage, Acquire and Retain. A customer is to be pitched at every level.

Traditional Saas Funnel

Sales Funnel
Image via Business2Community

The above, traditionally accepted models are quite challenging to achieve and not exactly ideal. And as Chargify explains, in a utopian world, it would look something like this:

Ideal world sales funnel
Image: Ideal world sales funnel

You might put up online ads to spread awareness, run an e-mail marketing campaign to tell your target audience that you exist or go for targeted customer engagement via web scraping. While the time and metrics for each stage may vary from one company to another, a prototype for an SaaS customer funnel somewhat looks like the above.

Why is it challenging for a new SaaS business or a start-up?

Most start-ups fail not because they can’t outrun their competitors who are solidified in the market, or know the market inside-out, have a loyal customer base, and can spend a fortune to reach out. These start-ups also fail to strike a chord with the masses because they want to outspend their competition and not outsmart them.

Moreover, this CB Insights study suggests that more than forty percent of SaaS start-ups fail because they don’t understand their market first and launch services or product that nobody needs or care about.

According to Marc Wayshak, fifty percent of your prospective leads aren’t the right fit for your products. So, to have the right sales funnel for SaaS companies, the journey starts much earlier by understanding and reaching out to your customers!

Critical elements of a smart SaaS funnel and the role of data mining services in making your SaaS product or service a hit:

Data quality is the key to the success of an SaaS company, and as Neil Patel put it, not using data translates into missed and misfired opportunity for SaaS companies. Let’s find out where your sales funnel is failing to harness the power of data and letting the customers leak through it.

Landing page: The awareness phase of an SaaS product or service with a subscription model starts with a landing page from a social media page, events page, webinar registration or a paid ad. While the landing page is aimed at a highly targeted segment, this lead generation data can be highly inaccurate. As per this study, nearly fifteen percent of leads have duplicate data, and ten percent of leads have inconsistencies or invalid data. A lead generation campaign may see nearly eight percent of leads with missing data and more than six percent of leads with invalid e-mail addresses. The customers may or may not give you the correct information, or your landing page could end up targeting incorrect keywords leading to inaccurate data in your system.

Solution: You see, it is a closed and interconnected loop.  A landmine, to be precise. To avoid such mistakes and letting the bad data entering your system, hire a data mining service provider. A data mining company deals in data verification and data scrubbing -weeding out inconsistent, inaccurate and incomplete data out of the system While rolling in Add-on value services such as Address search, phone number update and current location.

E-mail marketing: An e-mail marketing campaign can help you reach out to both interested and existing customers. That is if you know your database has correct e-mail IDs of the said people. While more than thirty-seven percent of e-mail addresses are changed yearly, and twenty-one per cent of the key decision-makers such as CEOs move to new jobs annually. If you haven’t updated your e-mail list, you missed out on adding to them as your customer as well. Just to put things into perspective, have a look at this study. It suggests that businesses end up wasting more than twenty-five percent of their time owing to bad data as they need to send more than 120 e-mails to set up only two face-to-face meetings with prospective customers.

Solution: E-mail appending services not only help in e-mail address validation to find out the problems and inconsistencies in e-mail data but also enhance with the current information such as the demographics, your prospects’ existing job profile and role in the company.

Users’ Journey: While specific keywords will help you to focus the on customers’ intent and needs for a lead generation campaign, only data appending services can provide an insight into their persona and purchasing behavior. It can help you to understand your customers a lot better as well as offer a microscopic vision to the market and competition.

Solution: E-mail verification and data mining services are where you should start. fix your data quality before even pitching your customers.

Why does one need data mining services for SaaS company?

We are living in a data-driven economy. It is the power that holds the key to longevity in the market and gains a competitive edge. When a company sidelines the data quality and fails to derive insights from the relevant information, it is letting its business processes be affected by the impact of bad data. The  research indicates that  lead generation gets affected the most (80%), followed by marketing (66%), finance (30%) and customer relation (56%).

And despite this, nearly thirty percent of businesses have no clue of or strategy in place for data scrubbing! Companies are required to have a deliberate attempt to fix their data. If you are looking to make your SaaS company a success, adopt a proactive approach for data mining and data scrubbingpractices.

Considerations for a successful and smart SaaS funnel

Target your customers (The right ones): Selling a digital product with a subscription is challenging. So, ensure you have a data-driven approach for sparking interest. Almost ninety percent of businesses go to Google for promoting their products and having lead magnet landing pages. The real deal is to stand out by targeting customers who need your product or service and filtering them for the right information with e-mail verification services.

Stay focused on end customers: Netflix is a global SaaS provider. It is a name to reckon with, so much that it has become a verb. During COVID-19, almost all of us have Netflix and chill. It offers a 30-day free trial option, has a clear policy to remind when it is about to charge its customers. It is transparent and is forthcoming with its customers. It has different plans for each country and ensures that it handles the targeted demographic accordingly. It switches its approach strategically by market. For example, for the price-conscious Indian market, it has launched a basic plan for different screens where users can piggyback on one username at the same time.

Netflix frequently asked questions
Image: Netflix frequently asked questions

Develop user personas: Even if you have a database of your customers from web scraping packages or tools, it is vital to develop  insight into their online journey, purchase triggers, industries and so on. It can help you to deliver hyper-personalised content, communicate the benefits of your products and draft content that share their perspective and nudge them into buying a subscription.

Define the acquisition strategy: Evaluate your free-trial policy. Is your short trial period hurting your conversions? Are customers confused about your product because a 14-day period is not enough for them? Your focus should be on making more and more customers sign-up for your free trial period because you would like to have more people on top of the funnel to push them to bottom who can sign-up and become word-of-mouth ambassadors. If you don’t have people up there, the bottom of the funnel will hardly be a topic of discussion then. However, a 30-day trial doesn’t guarantee that your customers would convert either. So, choose your poison wisely keeping your end customers in mind and what triggers them.

Garner trust: Why do people go to HubSpot and Spotify? They exude trust. They know they can’t go wrong with them if they choose to give these companies their hard-earned money. Whether you are a reputable, legacy SaaS company or a new kid on the block, trust can take you a long way. This trust can be generated via fellow customers. So, utilize data-driven content and word-of-mouth in the form of case studies and e-books to let your users understand that you know what you are doing and your users trust you for the knowledge you possess.

Keep an eye out for red-flag metrics: It is an important metric to understand to analyze and assess the retention parameters. Are people stopping short at a payment gateway? Are you getting repeat business or are your customers note renewing their memberships? These steps would help you to keep track of acquisition and retaining of your customers in real-time and in a realistic manner.


Optimize and transform your SaaS funnel into a smart and smooth journey for your customers and business. However, you need to tackle the bottlenecks and bumps of a SaaS funnel with data. More informed you are about your end customers, more chances of you having them into your sales pipeline and eventually, furthering them into the bottom of it to make them your customers.

Data-driven content and e-mail marketing can help your customers to make sense of your website and product while attracting the targeted demographic. With the right data mining service partner, you can enhance the customer database and make use of it to drive engagement, acquisition efforts and eventually, turn them into a customer.

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Murtaza Amin
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