How to Optimize Your Sales Funnel for More SaaS Growth

Table of Contents

Sales Funnel

Are you a SaaS business owner struggling to grow your business? You are not alone! Given how a SaaS business model is so different from a traditional business model, growth is a common hurdle faced by most. However, like all problems in all businesses, this one comes with a solution too: optimization of the sales funnel.

Optimization of the SaaS conversion funnel sure could be one of the established means of rendering growth to your business. However, before we get to the ‘hows,’ let’s first understand what is a conversion funnel and why you should even care about your SaaS conversion funnel.

What is a SaaS conversion funnel?

A SaaS conversion funnel or sales funnel for SaaS, in similarity to a conversion funnel of any industry, is a way to visualize the flow and conversion path of potential customers into actual paying customers. The potential, visiting customers can be generated through methods including SEO, content marketing, social media, and paid ads.

SaaS Funnel Stages

SaaS Funnel Stages

The SaaS sales funnel can be better understood by exploring the three stages it subsets-

Stage 1: Acquire

The acquire stage or the customer acquisition stage of the SaaS Funnel Stages is the one that has a funnel of its own called the acquisition funnel; awareness, engagement, exploration, and conversion.

Awareness: This is the stage where you impress your potential customer and get your hands on the opportunity to make them aware of your SaaS product. Awareness can be created through organic searches, social advertising, search advertising, word of mouth, or any other marketing methods you might believe work best for your business.

Engagement: Engagement occurs after you successfully impress your prospect and convert them to an actual lead or a potential paying customer. The lead might sign up for your email list, or fill out an inquiry form on your site to get in touch with you.

Exploration: Your lead, like any customer out in the market to invest in a product, will want to explore all the options they have in hand. Most likely, there would be a couple of competitors in the market offering the same services as your company and hence, at this step, it becomes important to help understand your customer why you should be picked above all. Aim at positioning yourself as a better and more investable company owing to your unique selling proposition.
Conversion: Conversion, for most SaaS products, comes as a result of a catalyst in SaaS marketing. For example, your lead might have signed up for a free trial or a free demo and as a result, might then want to sign up as a paid subscriber.

Stage 2: Engage

Onboarding a customer and converting them into a paying client is not the end of the story. In order to build an actual long-term relationship, it is important to maintain continuous engagement with the client. This engagement could be done via survey forms, by offering regular service calls, and even by tagging them on your social media posts to celebrate them as your clients.

Stage 3: Retain

There’s only one practical way to retain your customers after having onboarded them: ensuring they find the success that they were looking for before investing in your SaaS product. Ensuring that their feedback is worked on and their grievances are addressed without delay could be some of the primary ways of ensuring retainment. Customer retention is all about delivering what your customer expects or anticipates –  or perhaps, delivering even more than what is expected or anticipated.

Why is a SaaS sales funnel so important?

The decision of a potential customer to convert to an actual customer depends on a lot of factors. The manner in which you present your business, the kind of content you feed, the way in which you advertise, and even the intended branding messages for the targeted audience play a major deciding role.

In this whole journey of a potential customer converting to an actual customer, there also could be a couple of potential blockages that hinder your growth process. If in your case, you don’t even have the potential leads in your funnel yet, that is your biggest blockage right there.

Optimization of your SaaS sales funnel, on those lines, is hence the process that helps identify and resolve such blockages that stop a potential consumer from becoming an actual consumer. Via optimization, you could reach out to more potential leads, convert more leads, and thereby sell more subscriptions to achieve the goal of sales.

Optimization Of SaaS Conversion Funnel: 5 Easy Solutions

To make things easier and help you get more clarity on the topics, here are a few ways that could help you optimize your Sales Conversion Funnel for More SaaS Growth-

1. Don’t look for ‘just’ leads: Aim to generate qualified leads

Aim to generate qualified leads

There is a fine line that exists between a lead and a qualified lead – a line that needs to be understood before it thins and blurs out all your lead generation efforts. A lead could be anyone who signs up for your emailers or who opts for a free demo, only to sit there with no concrete decision or response with regards to signing up for your SaaS product. A qualified lead, on the other hand, would be the one that has the capability and is willing to actually subscribe to your SaaS product.

For you, as a SaaS business owner, it only makes sense to invest and channelize your efforts in qualified leads as against just any lead that comes your way. An ideal way to be able to do this would be to ask questions to your leads in the signup process. If you are inviting a lead for a free demo, ask them detailed questions before the demo to gain an understanding of how well interested they could really be in you. For example, you could ask them if they already have another competitor on board and what problems are they facing with the said existing vendor. If your product can solve the problems at hand, you know you already have won half the race!

2. Measuring all the important funnel metrics

Measuring all the important funnel metrics

In order to successfully optimize your SaaS conversion funnel, you need to also have reliable data that can help you make educated decisions around your marketing efforts. Keeping a close track of your Key Performance Indicators (KPIs) like Customer Acquisition Cost (CAC), Customer Lifetime Value, Monthly Recurring Revenue (MRR), Total Month-On-Month Revenue, and Customer Churn could help you to a great extent.

It is only once you start measuring your KPIs that you can apply data and find yourself the information that could help grow your business.

3.Reduce Customer and Revenue Churns

Reduce Customer and Revenue Churns

High customer churn and high revenue churn mean unstable profits and so, reducing the said churns should be your company’s top priority. Your monthly recurring revenue can see an instant and noticed boost just by putting in some efforts to reduce the revenue and customer churns.

For example, instead of offering monthly discounts to your client month on month, you could instead offer them an upfront lifetime discount/ or charge them an upfront lifetime cost. This way, you don’t lose anything month on month and as a result, your MRR would shoot up.

4. Strive to constantly upgrade and update

Strive to constantly upgrade and update

You have built an excellent website, you have a couple of clients coming in, the onboarded clients are also very happy with what is offered – but can that be the end of all? It should not. As a business owner, make it your priority to constantly update and upgrade your website experience (UX). Your potential, as well as an actual consumer, should have all the information they are looking for at once, without having to scroll through multiple pages that could cause frustration and annoyance. UX can also be enhanced by making navigation on your website/app easier to understand, by boosting the load times, and by properly timing the CTAs.

5. Heatmap and Scroll Map Analytics

Heatmap and Scroll Map Analytics

A heatmap on your website can help show where most website activity takes place and what elements draw the most attention using colors. Once you know what draws attention, it will become easier for you to optimize those particular areas for your conversion funnel. A scroll map, on the other hand, helps you understand at what point exactly most users quit scrolling down the page.

Running Heatmap and Scroll Map Analytics could be another way of optimizing your conversion funnel as they directly, on point, help you understand what’s wrong and where.

If you can get your hands on the knowledge of at which point do people lose interest, you can instead create interest by, perhaps, inserting a CTA right there. Gathering data is essential because optimizing your SaaS conversion funnel requires knowledge about how your users interact with different pages on your website; and this knowledge can only be accessed via data. The said data can also be used to run A/B tests and to understand what versions of each element work best with your targeted audience.

Optimization Of SaaS Conversion Funnel: Common Mistakes To Avoid

While optimizing your SaaS conversion funnel, keep in mind the following points to avoid making mistakes and saving yourself a roadblock-

1. Avoid complicating your forms

Avoid complicating your forms

A prospect or a lead should not be intimidated by the forms that act as the first point of communication between you and them. The said form could be any form, a signup form, a contact form the emailer form. Keep it simple, easy, and as basic as possible. We recommend asking for information that is absolutely necessary at step 1.

2. Foresee next steps

Foresee next steps

SaaS solutions typically have a fairly drawn-out sales cycle compared to many other businesses.” as per Jeff Cox, a content marketer. In fact, the average length of the sales cycle for a SaaS company is nearly 3 months. Having said that, the point here is to not sit on one lead for three months. Keep your plan of action formulated in order to continually speed up the buying cycle. Optimization of the conversion funnel by making the next step easier and logical can also keep your potential audiences engaged.

3. Backup


You might have been led to believe that your current action plan is the absolute best and that implementing it is all you need to see your business grow. In reality, however, with experience and by spending some time implementing it, you might come to realize that your current plan, in fact, does not work in your favor at all. To avoid yourself at the last minute, it is recommended to always keep a recovery or a backup plan in place.

FAQs- How to Optimize Your Sales Funnel for More SaaS Growth

1. What is a customer lifetime value?

Customer lifetime value (CLV) is represented by the total amount of money a customer would potentially spend on your product or business. For example, if you are a SaaS business with a subscription-based model that charges $2 per month and your customer subscribes to your service for 2 years upfront, your CLV is high. However, if the customer happens to cancel the contract before the completion of 2 years, you’re looking at low CLV. Knowing your CLV is key data when it comes to optimization of your sales funnel for SaaS.

2. What is MRR?

MRR OR Monthly recurring revenue is calculated by adding the total amount of money your customers spend each month. In a SaaS company, MRR should ideally be calculated taking into consideration the varied costs paid by customers owing to their subscription to varied packages. Optimization of your SaaS sales funnel could help bring in new customers and also to retain the existing ones.

3. What is customer churn?

Customer churn can be defined as the rate at which our customers become non-customers and it is also regarded as an important knowledge performance indicator (KPI). Customer Churn, in a SaaS company, can be calculated by calculating the number of customers who cancel their subscriptions month on month. Having trouble with setting up and optimizing your SaaS sales funnel? Get in touch with us today!

Join The Newsletter

Want actionable SaaS marketing content? Join hundreds of smart SaaS marketers.👇

Get a free consultation

Let’s audit your current marketing & see where paid media + CRO fit in.

Get a free consultation

Let’s go through your current paid media (or lack thereof) & find areas of improvement that are sure to bring results.

luis camacho

1:1 Consulting

Introduce new scalable acquisition channels or take your current advertising efforts to new heights on a 1:1 level.