27 SaaS Products for the Marketing Department

After the post on 35 SaaS Marketing Products @ 1 Startup, a number of people asked me what products they used. While I don’t have the exact list of apps, here’s most of the free and paid apps the marketing department of the sub 100 person company uses:

  1. Salesforce.com – CRM
  2. Pardot – Marketing automation
  3. SalesLoft – Sales development (inbound response reps on the marketing team use SalesLoft to respond to leads)
  4. Google Analytics – Web analytics
  5. Google AdWords – Ad platform
  6. LinkedIn Ads – Ad platform
  7. Facebook Ads – Ad platform
  8. WorkGreat – Marketing analytics + reports
  9. Terminus – Account-based marketing
  10. Calendly – Calendar scheduling
  11. Moz – SEO analytics
  12. Buffer – Social media scheduling
  13. MeetEdgar – Social media content recycling
  14. Captora – Bulk landing page generation
  15. Optimizely – A/B testing
  16. Zapier – Cloud integration
  17. Unbounce – Landing pages
  18. WPEngine – WordPress hosting
  19. Zopim – Live chat
  20. ON24 – Webinar management
  21. GoToMeeting – Screen sharing
  22. Sigstr – Employee email signatures
  23. Intercom – Customer communication
  24. Vidyard – Video management
  25. LeadData – Campaign attribution
  26. Bizable – Marketing attribution
  27. Everstring – Predictive account discovery

Some later additions:

A small business marketing department using 27 products is on the high side, but not unreasonable. Look for the number of marketing department apps to grow over time as more useful point solutions come on the market.

What else? What are some more apps you’d add to this list for a marketing department?

35 SaaS Marketing Products @ 1 Startup

Yesterday I was talking to the head of marketing at a fast-growing, <100 person SaaS startup. We were talking about the modern marketing stack and he mentioned that they pay for 35 different SaaS products. Yes, 35 different marketing apps at one small business. Some of the app categories included marketing automation, social media management, A/B testing, SEO analytics, etc.

Here are a few questions that come to mind:

  • Is there an upper limit to how many marketing apps a small business will use?
  • When does app fatigue set in?
  • How many are apps require daily work vs ones that are set it and forget it?
  • How is reporting done across so many apps?

SaaS is unique in that once the business has $500,000 in recurring revenue, it’s hard to kill. Thus, there’s a huge cottage industry of SaaS marketing apps that provide value. It’ll be interesting to watch the industry over time and see how it plays out. My prediction: there’s no upper limit of marketing apps and we’ll keep seeing more and more.

What else? What are some more thoughts on the idea that there are 35 SaaS marketing products at one small business?

A SaaS App for Every Department and Every Business Function

Continuing with the idea that every spreadsheet shared is another SaaS app, there’s another way I like to think about potential opportunities in the SaaS world: there’s a SaaS app for every department and every business function. Meaning, every department should have an app they use (e.g. Pardot for marketing) and every distinct business function on the team should have one or more apps (e.g. SalesLoft for the SDR function in sales).

Here are a few questions to ask when thinking about about SaaS app opportunities:

  • Is this a function that is broadly applicable across business functions (e.g. Calendly for scheduling) or very specific to one business function (e.g. Trustfuel for customer success)?
  • Is this resegmenting an existing market or creating a completely new one?
  • Of the three options better, faster, or cheaper, which two does it represent?
  • Is this app a must-have or a nice-to-have?

The next time you hear a pitch for another SaaS app, see if it fits in this theory that there’s a SaaS app for every department and every business function — I bet it does.

What else? What are some more thoughts on the idea that every department and business function will have a dedicated SaaS app?

Two Major SaaS Exits Announced

After last week’s Lack of SaaS Consolidation post, we just had two major SaaS exits announced in the last 24 hours:

With relatively few SaaS exits recently, these two are huge. What to make of it? Here are a few thoughts:

  • SaaS has much more growth ahead than public markets even priced in
  • Market leaders get a serious premium
  • Consolidation will eventually happen for the category leaders
  • Plan on 10+ years for the largest of SaaS exits
  • Look for more of these huge exits over the next five years (Zendesk, Shopify, HubSpot, etc.)

It’s a great time to be in SaaS and we have many years of growth ahead of us.

What else? What are some more thoughts on these recent SaaS acquisition announcements?

Leads, Leads, Leads

Whenever I’m talking to entrepreneurs, especially seed stage entrepreneurs, the number one challenge is customer acquisition. Drilling in, more specifically, every entrepreneur wants more leads (who wouldn’t?). In fact, Jason Lemkin argues that lead velocity rate is the most important metric in SaaS. Since leads are so important, it follows that entrepreneurs need to build internal lead generation capabilities.

Here are a few thoughts on lead generation:

  • Use a marketing automation system as the core of the lead generation efforts
  • Pick a sales development cloud to execute outbound campaigns
  • Run the standard B2B marketing playbook (SEO, SEM, email campaigns, webinars, ebooks, etc.)
  • Ensure the marketing team has a quantitive mindset (think analytics and data — Google Analytics is your friend)
  • Establish a definition of marketing qualified lead and sales qualified lead
  • Require clear objectives and key results from the team
  • Build a repeatable process and constantly iterate

Lead generation is significantly harder than it looks. Entrepreneurs need to build a customer acquisition machine post product/market fit, and lead generation is one of the top priorities.

What else? What are some more thoughts on leads being so critical in building a successful startup?

Lack of SaaS Consolidation

Villi Iltchev has an interesting post up titled Why SaaS Consolidation is Not Happening. As more and more money has been invested in SaaS over the past 10 years, the logical expectation is that there would be a corresponding number of exits. Only, the number of material SaaS exits has been relatively small.

Here are a few of the challenges with SaaS consolidation as enumerated by the author:

  • Supporting and scaling multiple clouds is daunting.
  • Customer Success is the vendor’s responsibility in SaaS.
  • Distribution in SaaS is much less impactful.
  • Sales productivity does not get better.

I agree and expect to see a number of small-to-medium SaaS companies rolled up over the next five years (see What Happens to Small SaaS Companies). Once the 10 year horizon is done for venture funds, and a number of their SaaS investments are only growing modestly, look for a number of exits to private equity firms that will roll them up and maximize cash flow.

What else? What are some other thoughts on the lack of SaaS consolidation?

Sales and Marketing as a Percentage of Sales, for Public SaaS Companies

Bloomberg Businessweek has a chart with the sales and marketing costs as a percentage of revenue in the last 12 months for several notable public SaaS companies:

  • Workday – 37%
  • Salesforce.com – 49%
  • ServiceNow – 50%
  • NetSuite – 52%
  • Marketo – 60%
  • Box – 80%

A few thoughts:

  • These companies clearly believe there is tremendous growth in the market, and investors are backing them up
  • While it isn’t this simple, imagine cutting sales and marketing costs by 80% and many of these companies would be very profitable (another reason why it’s reasonable to value SaaS companies at 4 – 6x revenue)
  • If these public SaaS companies with scale are spending 50%+ of their revenue on sales and marketing, imagine what the unicorn SaaS companies are spending as a percentage of revenue (hint: well over 100%)

Knowing this, it’s easy to see why Sales-Oriented Startup CEOs are preferred. The most successful SaaS companies are incredibly focused on sales.

What else? What are some more thoughts on sales and marketing as a percentage of revenue for SaaS companies?