Stages of the B2B SaaS Sales & Marketing Funnel
Last updated: April 29th, 2024
A well-structured B2B SaaS sales & marketing funnel can be a powerful asset in scaling your business. And to leverage it to its full potential, keeping track of each stage and understanding how they interconnect is key.
So, let’s explore the SaaS sales funnel stages, introduce some key definitions you need to know, and show you how to optimize your funnel.
Important Terminology
Before we get into it, here’s some important terminology that’ll help you get the most out of this article.
- Marketing qualified lead (MQL) – a lead that has shown interest in a product based on marketing efforts.
- Sales qualified lead (SQL) – a lead that has shown increasing interest in a product and meets the behavioral or persona traits of a lead that’s ready to convert. This makes them ready to be passed onto the sales team.
- Return on investment (ROI) – the difference between net income and investment.
- Ideal customer profile (ICP) – the type of customer that fits the description of a profitable, high-value customer, and is suited to purchase your product.
- Cost per acquisition (CPA) – the cost to acquire one paying customer from a particular marketing campaign.
- Annual recurring revenue (ARR) – the annual income received from a subscription, for the lifetime of the subscription.
- Lead magnet – an offer of a resource, like a white paper or template, in exchange for contact details.
- Lead nurturing – the process that steps the lead through the sales funnel and guides them from start to finish.
- Sales Pipeline – the entire process and all the steps involved in moving a customer through the sales funnel.
- Sales Cycle – a visual representation of a customer’s entire sales journey.
- Lead scoring – the process of evaluating and scoring a lead’s likelihood of converting.
Understanding the B2B Buyer Journey: SaaS Sales Funnel Stages
The B2B SaaS buyer’s journey typically involves a long sales cycle and requires intensive customer nurturing. This is because prospective customers research their options thoroughly before deciding what product to purchase, and the stakes are generally higher than with B2C transactions.
To fully understand the buyer journey, you have to understand the stages of a B2B SaaS marketing funnel. You will hear these referred to as top of the funnel, middle of the funnel, and bottom of the funnel.
Top of the Funnel
The top of the funnel is considered an awareness phase. In this initial phase, the goal is to attract visitors to your website, raise awareness of your brand, and show a prospective buyer how your product can benefit them. By highlighting the value your product brings, the prospect is more likely to move to the next stage in the B2B sales funnel.
Prospects at this stage are considered either problem-unaware (not recognizing they have a problem) or problem-aware (they recognize the problem but don’t know how to solve it yet). Therefore, content aimed at this stage, like how-to guides, news stories, lead magnets, and other informational media, is designed to educate, engage, and nurture prospects further along the sales funnel.
Middle of the Funnel
The middle of the funnel is the consideration phase. These prospects are definitely solution-aware and sometimes already product-aware, meaning they know there are options for their problem to be solved and may have even started comparing their options to find the best fit. This is an opportune point to provide them with the information they need to put your product at the top of their shortlist.
Suitable content usually includes comparison articles, case studies, webinars, or even a ROI calculator.
Bottom of the Funnel
By guiding a prospect to the bottom of the funnel, you’re nearing a successful conversion. This stage of the B2B SaaS sales funnel is critical as it’s where the potential buyer is ready to take action. They understand the type of solution they need and the range of products available to them. To seal the deal, you want them to conclude that your product is the top choice.
This is where the user experience of your website plays a crucial role. You want to make it easy for the buyer to find all the information they need, like pricing plans, integration possibilities, social proof, and FAQs, so they’re more confident to take the next step and convert.
Evaluating Your B2B SaaS Sales Funnel
Because of the long sales cycle of the B2B SaaS sales funnel, having a solid sales and marketing strategy is crucial for staying on track and meeting your KPIs. And the only way to fully understand how well your sales funnels are performing is by regularly evaluating them.
Evaluating the effectiveness of your sales funnels is a three-step process – first, you analyze, then categorize, and finally, prioritize.
Analyze Your Funnel Performance
Firstly, invest in a good CRM tool that will take the stress out of crunching the data and do all the hard work for you. Then, look for signs of inefficiency in the B2B sales funnel, like:
- Blockages in the process – points where prospects slow down while passing from phase to phase, indicating some discontent.
- Stage-to-stage conversion rates – at which stage of the B2B sales process are you losing the most prospects?
- Percentage of prospects that meet your ICP – if you’re not attracting the right prospects from the beginning, this is a problem.
It can also be helpful to gain insights from customer feedback about reasons for lost deals and product dissatisfaction. This could show poor product fit or another problem.
Categorize Your Audience
Understanding the demographics and online behavior of your prospects and their personas will help you to segment your audience. Once you’ve identified common features or characteristics of those who are more likely to convert, you can effectively target these persona types in your marketing.
Prioritize and Start Optimizing
At the end of these steps, you’ll have a thorough understanding of where your sales funnel is underperforming. You will also have identified the best and worst of your audience segments, so you can focus on optimizing the funnel.
Optimizing Your B2B Sales Funnel
Now that you understand how your B2B sales funnel is performing, it’s time to focus on optimization. The specific improvements you’ll make depend on the issues you’ve identified within your sales funnel.
If there’s a blocker affecting the number of leads you’re collecting, consider optimizing your lead magnets by changing or updating the resources you offer to make them more appealing.
Using the contact email addresses you’ve collected from your lead magnets and the audience segments you’ve established, you’ll be able to tailor your messaging and follow-ups. This tailored lead nurturing can result in improved customer relationships and a higher likelihood of conversion.
Develop an effective lead scoring system that ensures you can accurately qualify leads before passing them on to the sales team. Investing more resources into leads with higher scores can lead to more efficient conversions.
Get Expert Assistance
At some point, you may realize it’s worth seeking outside help with implementing your marketing strategy. If you’re considering engaging a marketing agency to manage your PPC ads and other marketing output, you’ll want to make sure you choose the right marketing agency.
At the surface level, most marketing agencies will offer similar services, and if you don’t know how to evaluate their methods and results, you could end up wasting time and money. You will see the agency’s track record with other clients and their price tag and make a decision based on these factors. However, you should also consider ROI and whether they have specific experience with a B2B SaaS company like yours.
The Powered by Search Methodology for Predictable Growth
We understand that the issues facing each business vary significantly. One may have SEO issues and another could have problems with their messaging. We used many different strategies and tactics over the years and developed our predictable growth methodology.
The predictable growth methodology works well for SaaS businesses that grow based on customers signing up for more demos or free trials. The methodology carefully follows the customer through all the stages of the B2B sales process until the point of conversion.
In our experience, there are no quick hacks to sustainable growth, but using our methodology, we regularly have clients increase their demo acquisition without increasing CPA or impacting customer fit.
How We Develop Accurate B2B Marketing Funnel Forecasts
B2B marketing funnel forecasts are an important part of your evaluation step, as these forecasts show the value in your marketing budget. However, marketers typically focus on metrics like MQLs, whereas management only understands cash flow. So, to align sales and marketing, it’s important to develop accurate marketing funnel forecasts.
When developing our marketing funnel forecasts for clients, we go deep into the entire buyers’ journey by looking at both the sales and marketing funnels. The caveat is that you need to have six to twelve months of data to create an accurate forecast.
We look at a wide range of metrics, including:
- Spend metrics – sales and marketing spend
- Marketing metrics – traffic, leads, and MQLs
- Sales metrics – opportunities, pipeline, customers, and won revenue
- Revenue metrics – starting ARR, new ARR, expansion ARR, churn ARR, contraction ARR, and end-of-month ARR
This forecast model takes some time to set up but it’s worth the time spent, and we have a template to make it even easier. With an accurate forecast, you can set better marketing goals and plan future marketing investments.
Wrapping Up
Having a deep understanding of your buyers’ journey from start to finish will help you gauge their needs and target them with the right messaging and content, which ultimately impacts your conversion rate.
However, to find out if your B2B sales funnel is performing as well as it could be, you need a system of evaluation. Why not get the ball rolling by completing our SaaS scalability score self-assessment? This will give you a starting point to understand how well your business currently attracts, engages, and converts customers. Ultimately, this will give you an idea of how scalable your business is and how you compare to other similar businesses.
What you should do now
Whenever you’re ready…here are 4 ways we can help you grow your B2B software or technology business:
- Claim your Free Marketing Plan. If you’d like to work with us to turn your website into your best demo and trial acquisition platform, claim your FREE Marketing Plan. One of our growth experts will understand your current demand generation situation, and then suggest practical digital marketing strategies to hit your pipeline targets with certainty and predictability.
- If you’d like to learn the exact demand strategies we use for free, go to our blog or visit our resources section, where you can download guides, calculators, and templates we use for our most successful clients.
- If you’d like to work with other experts on our team or learn why we have off the charts team member satisfaction score, then see our Careers page.
- If you know another marketer who’d enjoy reading this page, share it with them via email, Linkedin, Twitter, or Facebook.