Friday, October 17, 2008

Bessemer SaaS Law #6

Bessemer SaaS Law #6. By definition, your sales prospects are online - Savvy online
marketing is a core competence (sometimes the only one) of every successful SaaS business.

You sell a product that requires an internet connection and a web browser for access, which means your prospects are online! Numerous studies show that your customers are now doing most of their primary research online, and it should not surprise you. As a consumer, you wouldn’t imagine buying a car, making an offer on a home, planning a vacation, or completing other large purchases without first doing some research online. The same is now true for executives at your target customers. You should therefore be aggressive in marketing to them online.

This is a clear example where business-to-business (B2B) marketers need to learn from their business-to-consumer (B2C) counterparts. The most innovative B2C companies are lead generation machines, leveraging search engine optimization (SEO), viral marketing, Search Engine Marketing (SEM), email marketing, and other technically-advanced methods. Yet many B2B companies don’t have a clue.

The incumbent technology leaders like IBM, Oracle, or SAP, have done very little in online marketing, and thus have given their smaller challengers a huge opportunity. Private SaaS companies have so many disadvantages against the larger incumbent vendors that it is imperative for them to exploit this potential advantage. Whether they use an automated product like Eloqua (as is the case with a dozen of our companies) or a team of marketing analysts and spreadsheets, online marketing and demand generation is simply a “must have” for SaaS companies.

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