If you are a SaaS founder, you already know that your conversion rate matters. But many SaaS companies struggle to turn website visitors into actual signups and eventually paying customers. If you're facing issues with your
conversion rate, you're not alone. In this blog post, we'll explore the top reasons why you might be struggling to convert visitors into paying customers and how you can fix it.
As a note, most of these recommendations are geared towards those of you who have a self-serve or PLG strategy going where customers can see the pricing, sign themselves up and start using your product right away without needing to talk to sales, but the spirit of it often applies to sales-led strategies too.
First – bear in mind that a good SaaS conversion rate
isn't built in a day. You may need to use various different strategies for
more than half a year to see the needle move.
1. Product Copy Not Enticing for Your Ideal Customer Profile
Your website copy is the first point of contact between your actual product and potential customers, not any ads or marketing they've seen. If your product copy isn't compelling or doesn't speak directly to your ideal customer profile (ICP), you're likely missing out on customers.
Lack of Clarity and Focus
Your website - and any other product-related materials like info documents - should clearly communicate what your SaaS product does and how it benefits your ICP. Focus on the pain points your product addresses and the solutions it offers. For example, if you're a B2B SaaS startup targeting small businesses, ensure your copy highlights how your solution can streamline their operations and reduce costs.
Pro tip: Make sure that the copy does not just feel right to you - ask customers, friends, and whoever you can find to provide honest feedback. Better yet - do some legit A/B testing to get truly unbiased answers.
Not Highlighting Key Benefits
Potential customers need to understand the value your product brings. Make sure your copy highlights your key benefits and features that set your product apart from competitors. Use bullet points, headers, and visuals to make this information easily digestible.
For instance, if your SaaS product offers a unique feature that competitors lack, make sure this is prominently displayed on your landing pages. Describe these key benefits in language that your customers understand, ideally use the same language that your customers use when they talk about the problem themselves.
No Clear Call-to-Action (CTA)
A strong conversion rate often hinges on having clear and compelling CTAs. Ensure your CTAs are prominently placed and tell visitors exactly what action to take next, whether it's signing up for a free trial, downloading a whitepaper, or scheduling a demo. Be as clear as you can and make sure your CTAs are easy to understand and that they link to the correct page.
2. It's Hard to Sign Up (or Take the Desired Action)
A complicated or cumbersome signup flow can be a major barrier to conversions. If your signup process is too long, has bugs, or requires too much information upfront, potential customers may abandon the process or may not even be able to complete it. This is equally true for your free trial conversion rate as well as your paid one.
Obviously if your strategy or product doesn't lend itself to self-serve and is fully sales led by design, this same advice might apply to whatever the target conversion action is - booking a demo, requesting more info, etc.
Simplify the Signup Process
Reduce the number of steps required to sign up. Ask for only essential information initially, and allow users to complete their profiles later. A streamlined signup flow can lead to a higher freemium conversion rate. For example, many successful SaaS startups allow users to start with just an email address and password, with more detailed information required only after initial signup.
Testing
This sounds obvious, but make sure that your signup process actually works. By that we don't just mean it works on your Macbook. Does it work on a Windows notebook with Firefox and on 1920x1080 screen resolution? Does it work on your phone? Does it work on an older phone? Make sure to do enough testing to know that it works for most customers.
Offer Social Login Options
Allowing users to sign up using their social media accounts can simplify the process and reduce friction. This is particularly effective for B2B SaaS companies targeting users who value convenience. They will simply just use a social account to login, which reduced the friction in signup significantly.
3. Your Product Is Priced Too Low or Too High
Pricing is a critical factor in conversion rates. If your product is priced too low, potential customers may perceive it as low-quality. Conversely, if it's priced too high, they may not see enough value to justify the cost. It's not easy finding the sweet spot, and oftentimes it does take some trial and error to get the right prices for all of your target customers – for example, maybe your Basic pricing is great, but the jump to a Team or Professional account is quite steep.
Conduct Market Research
Understand what your competitors are charging and how your pricing compares. This will help you position your product appropriately within the market. For instance, if you're a SaaS startup offering a freemium model, make sure your free version provides enough value to attract users without giving away too much for free.
Test Different Pricing Models
Experiment with different pricing models, such as freemium models, per-seat pricing, or pay-as-you-go plans. Use A/B testing to determine which model resonates best with your ICP and leads to higher conversion rates. For example, many SaaS companies find that offering a free trial can significantly boost their conversion rates by allowing potential customers to experience the product before committing to a paid plan.
Highlight the Value
Make sure your pricing page clearly communicates the value and benefits of each pricing tier. Use testimonials, case studies, and ROI calculators to demonstrate the value your product provides. This can help potential customers see the return on investment and justify the cost of your product.
4. You Are Not Using the Right Pricing Model for Your Ideal Customer Profile
Choosing the right pricing model is essential for attracting and converting your ICP. If your pricing model doesn't align with their needs and expectations, you may struggle to convert visitors into customers. On our blog, you can find lots of information about this topic. If you are uncertain about your pricing, make sure to check it out.
Understand Your ICP's PreferencesConduct surveys and interviews to understand your ICP's preferences and pain points and what they actually want to pay for. This will help you choose a pricing model that aligns with their needs. For instance, some B2B SaaS companies find that a
usage-based pricing model works best for their customers, while others prefer a
per-seat pricing approach.
Offer Multiple Pricing Tiers
Provide multiple pricing options to cater to different segments of your ICP. For example, offer a freemium model for small businesses and a premium plan with advanced features for larger enterprises. This can help you attract a broader range of customers and improve your overall website conversion rate.
Communicate the Benefits
Clearly communicate the benefits of each pricing option. Use landing pages to highlight the features and benefits of each plan, and make it easy for potential customers to compare options. This can help them make an informed decision and increase the likelihood of conversion.
5. You Made Wrong Assumptions About Your Ideal Customer Profile
Incorrect assumptions about your ICP can screw everything up. If you think you are selling to someone who is actually not your ideal customer profile, you might use the wrong copy, the wrong pricing, and maybe even the wrong sales approach. Obviously that's going to affect your SaaS conversion rates significantly. Here are some things you can do to figure out who your ideal customer is.
Conduct Thorough Market Research
Use surveys, interviews, and data analysis to gather insights about your ICP. A lot of early-stage founders are skipping this step. but doing proper research can help you attract the right audience and improve your conversion rates.
Create Detailed Buyer Personas
Develop detailed buyer personas based on your research. These personas should include demographic information, pain points, goals, and preferred communication channels. This helps you create more targeted and effective copy and campaigns.
Continuously Validate and Update Your Assumptions
Regularly review and update your buyer personas based on new data and feedback. This will help you stay aligned with your ICP's evolving needs and preferences. For example, if you find that your initial assumptions about your ICP's preferred communication channels were incorrect, adjust your strategies accordingly.
6. You Don't Talk About How Your Product Is Different from Competitors
Differentiating your product from competitors is essential, but communicating the differences is even more important for attracting and converting potential customers. If your website doesn't clearly communicate what sets your product apart, you may struggle to convince visitors to choose your product over others.
Highlight Unique Selling Points (USPs)
Identify and highlight your product's unique selling points. This could be a specific feature, your unique approach, or a particular benefit that your competitors don't offer. For example, if your SaaS product offers a unique integration with a popular tool, make sure this is prominently displayed on your website.
Use Comparison Pages
Create comparison pages that clearly show how your product stacks up against competitors. Highlight the features and benefits that make your product the better choice. For example, a comparison page that shows how your product offers more advanced features or better customer support than competitors can help potential customers make an informed decision.
Leverage Customer Testimonials and Case Studies
Use customer testimonials and case studies to showcase real-world examples of how your product has helped others. This can build trust and credibility, making it easier for potential customers to choose your product. For example, a case study that highlights how a customer achieved a significant ROI using your product can be a powerful tool for attracting new customers.
Final Thoughts
There can be a lot of reasons why your conversion rate from visitor to paying user is not as high as you want it to be - and more often than not, it's probably a mix of factors rather than just one.
Improving your SaaS conversion rate requires a deep understanding of your ICP, a compelling website copy, a streamlined signup process, and the right pricing model, and a lot of other checkmarks to be checked.
