Founder's guide to lead generation in B2B SaaS

Demystifying marketing and customer acquisition for first-time entrepreneurs.

Customer acquisition in B2B is neither a secret sauce nor a silver bullet. In fact, it's so obvious and repeatable that people in the industry often refer to it as a 'playbook.'

Yet, many founders struggle to find clients for their products or services, especially if they lack a previous background in sales and marketing.

It may seem paradoxical, given the abundance of freely available information online. You can read, listen, and watch thousands of hours of great content and learn from the best marketers and sales leaders in the world.

So why is client acquisition still so challenging?

The availability of information is precisely the reason. There are so many things you can do to find customers: ABM, Outbound, Inbound, Events, SEO, etc. This paradox of choice itself can often lead to analysis paralysis.

In their quest to make sense of all available options, founders often find themselves buried in more books, YouTube videos, and podcasts, where different people have different opinions on what works and what doesn't. It's no surprise that they become even more confused!

But there is a light at the end of the tunnel, and I will call it 'The fundamentals.'

The fundamentals

Instead of focusing on a specific channel or marketing tactic, start by thinking about how companies typically buy new products or services.

And there are just two ways, really:

1. The organization has already identified a need or a problem and is now looking for the right solution to solve it. Here, you deal with an existing need, where in many cases all you have to do is answer the question “Why you?” and not the competition.

2. The person in the company stumbled upon an interesting tool, as it potentially might add value to the business. In this case, there is no active need or an urgent problem to fix. So, in most cases, you are dealing with a status quo, where the primary question to address will be"Why change at all?" and "Why now?". So whether the prospect will eventually become a customer, will purely depend on how well you can answer these two questions.

Based on the above, your entire marketing strategy will be based on whether you are looking to capture demand or generate demand. (Spoiler: do both).

Demand Capture vs Demand Generation in B2B SaaS

Demand Capture:

Goal: Attract the attention of people who are actively looking for solutions like yours.

Think about where people usually go to look for solutions to their problems. Where would you go, let's say, if you needed to find a tool to automatically calculate taxes in different countries?

95% of people will answer 'Google', and they will not be wrong. That's why Google Ads are such a popular and effective advertising channel—you have the ability to reach the people who have a clear buying intent right now.

Of course, there are more places where people may be looking for solutions, and it definitely would be a good idea to build your presence there as well:

• Other search engines (i.e., Bing)

• Catalogs (G2, Capterra, Clutch)

• AppStores & Marketplaces (Shopify, Hubspot, etc.)

• YouTube

• ChatGPT / Bard — even though you can't directly influence these channels yet, people are already using these tools to find solutions.

• Tradeshows / Exhibitions — quite rarely in the modern digital world, but still.

However, there are pros and cons you need to be aware of before investing all your time or money into 'Demand Capture' tactics.

Advantages:

1. Faster sales cycles. Obvious, as you focus on people who have the intention to buy something soon, be it your product or your competition.

2. A good way to acquire the first clients.

3. Works well if you target a broad audience. This means that even leads from small businesses are relevant to your product.

Challenges:

1. Limited audience. At any given time, only 1-3% of all target customers are in "active research/buying" mode. It complicates things especially when you are trying to scale and reach wider audience.

2. Can be very expensive due to high competition.

   Everyone tries to capture existing demand by targeting the same set of keywords. As a result, it can be very expensive, especially for popular niches. That's why you should also consider investing in SEO to get as much 'free' traffic as you can (even if it will take time before you see any tangible results).

3. Little control in terms of Firmographic targeting.

   You may receive a lot of leads from small/non-relevant businesses and disqualify 90% of them. Can be a serious challenge if you focus on acquiring Large / Enterprise customers.

4. Your solution may not 100% fit what clients look for.

   In many cases, customers are looking for something specific, which may not be 100% fit what you offer.

5. “In-market” customers may not even research you.
   Many buyers already have a preferred vendor when they decide to buy something, which they may contact directly, often without even exploring alternatives. 

6. Lack of demand if you offer an innovative product / new category.
   People simply may not yet be looking for such solutions at all.

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To sum up, Demand Capture is all about being present where people are already looking for solutions like yours. It will produce quick results; however, it becomes much more expensive as you try to scale. That's why you also need to think about a longer-term Demand Generation strategy.

Demand Generation

Goal: Generate interest among people that aren’t even aware of the problem you solve.

While Capturing Demand allows you to reach 1-3% of the audience who have an immediate need, investing in Demand Generation enables you to address the remaining 97% of the iceberg, representing potential revenue. That's why mastering this strategy is key, especially as you scale your venture.

But how do you generate a desire to purchase your product from people who aren't actively seeking solutions and may not even be aware of the problem you're solving?

Focus on problems, not solutions

I see a very common mistake that marketers and salespeople make when trying to sell to a 'cold audience'—they spend too much time on pitching their solutions instead of doubling-down on the problem itself. Unsurprisingly, 98% of their emails receive no replies, while ads on LinkedIn or Facebook perform 'horribly' compared to Google Ads. And there is a good reason for this.

See, In B2C, people often buy things they want but don't necessarily need. However, this doesn't apply to B2B. Employees are extremely busy with their day-to-day tasks. No one wants to take on additional work just for the sake of it. Companies won't even consider buying or piloting your product unless they clearly see a pressing need, which always begins with a problem. The bigger the problem, the more likely it is to be solved.

That's why for many startups, the biggest competitor isn't another vendor, but rather the status quo (doing nothing). Your solution may be 'interesting,' and maybe it can really improve a company's performance in some ways. However, it just doesn't seem 'that important' in the grand scheme of things for this specific company or a person.

So it doesn't really matter what you do, or how good you at it. It doesn’t matter if you already work with Coca-Cola or Unilever, or if you have 'AI' in your product, or a list of amazing features. Unless the key people in the organization can explain what important day-to-day problem will be fixed by implementing your software, you will be added in the 'nice-to-have' list.

If you've been marked as a 'nice-to-have', good luck with winning this customer. Typically, this results in exceptionally long (and never-ending) sales cycles, chasing clients without getting replies, price concerns, discount requests, requirements for free pilots, and so on. And trust me, reducing prices will not help in winning deals. Even if you offer free pilots, the company will not be invested enough to ensure the pilot's success. Been there, done that.

So, the only way to avoid this is to make your solution seem like a 'must-have' in the first place, before you even begin talking about your competitive advantages, pricing, and everything else.

How do you become a 'must-have'?

Focus 90% of your attention on 'selling' the problem, not the solution.

You need to educate people about the space in which you are working and the current problems or challenges it faces.

First of all, it will help clients to see challenges they might not have noticed before or couldn't even imagine could be approached differently.

Secondly, you will help them see these challenges through your perspective and position your product as the only true solution for these specific problems. You can control how the problem is framed, presenting it in the way you want.

Lastly, by positioning yourself and your company as experts in this particular niche, you create a shortcut in terms of competition with other vendors. When potential buyers feel the need for change, they will already know where to turn to find a solution, often without searching for alternatives.

How do you build this credibility and trust?

By producing a lot of high-quality content. Mainly, this shouldn't be about selling your particular product, but rather the overall problem you are addressing, and market you are working on. If the person finds the mentioned problem interesting, they will visit your website and read about your solution anyway.

To think about the possible topics, you can visualize a potential buyer and try to explain to them why their current state is no longer effective, why they should change, why now, what they are missing, and what the risks and potential implications are of not taking any action.

I guarantee that you will be able to generate at least 3-5 content topics you could use to write articles, speak at conferences, or talk on podcasts, and this will be enough to start with.

How to generate awareness?

While great content is a requirement, it's not enough to simply create it and put it on your blog. Sure, it may drive some organic traffic, but it will not generate the level of attention you hope for. So, you need to take more proactive action to spread your knowledge and expertise across a wider audience.

There are a few options you can pursue to distribute your content and ensure that people are actually aware of it.

Option #1: Untargeted Approach

Publish content where your potential buyers may be, even though you cannot guarantee it.

• Conference talks

• Podcasts

• Thought leadership / PR

Here, you don't directly control who will engage with your content. For example, while you hope that there are relevant customers who will listen to your podcast, you don't know exactly who listens to it.

The same applies to PR articles and conference talks. That's why it's important to carefully choose the right conferences, podcasts, and industry media for the niche you are working in.

Option #2: Targeted Approach (aka ‘ABM‘)

Proactively build awareness among the specific group of people and companies who match your ICP (Ideal Customer Profile).

The primary difference is that here you can reach specific companies and people and generate their attention in what you do. You can literally make a list of selected 100 companies and find all the relevant stakeholders in these companies, and only target this specific narrow audience, either through ads or direct ways of communication.

For example, you can promote your webinar using account-based advertising on LinkedIn Ads or Google Ads (using Customer Match). Even if you generate just 10 attendees, these are 10 very relevant people from your ideal customers. So with ABM, you can be willing to pay much more for each lead, as every lead is 'pre-qualified'.

Alternatively, you can host a private education event and invite key prospects by mailing or calling them. Even if only 5 people show up, it is still very likely to be a ROI-positive investment.

Besides hosting your own private events, or online webinars, you can produce guides, reports, videos, and other pieces of high-quality content, and then promote this content to your target audience proactively.

Should you focus on Option #1 or Option #2?

The answer is both. First of all, there are not so many conferences or podcasts you can engage in every year. There may be just 5-7 good events or podcasts, so even if you want to focus 100% on this, you are simply limited by capacity.

Therefore, the second option will add consistency and control to your marketing efforts, as well as possibility of building awareness among specific companies or people. That's why the mix is better.

Pros & Cons of Demand Generation

Demand Generation has its own set of advantages & disadvantages.

Pros:

1. Massive scale potential. There are thousands of companies that may potentially benefit from your solution. Yet, they don't even know about your existence and are not actively searching for something similar. This usually represents 95% of your target market (otherwise, you would be swimming in leads already).

2. Lower competition. When you are trying to generate demand, you typically compete with "doing nothing." However, if a company decides to make a change, it will most likely buy your solution, often without researching competitors.

3. Better inbound lead quality. When such a customer reaches out, they usually have already 'bought' into your product and trust you. Typically, they only have a few questions about the setup, pricing, etc.

4. Lots of targeting options. You can build awareness among specific types of companies and job titles that precisely match your ICP (Ideal Customer Profile). You don't waste any money by advertising to a non-relevant audience.

5. Demand Gen is the only way for some businesses to acquire customers. For example, you are doing something innovative, and people aren't searching for it just yet.

Cons:

1. Takes time. It may take 3-6 months and 20+ interactions with your brand and content before potential customers will consider reaching out to you.

2. Requires upfront investments with no immediate ROI. It may seem like a waste of money at the beginning. For example, you invest in LinkedIn Ads, but you don't get meetings in the same month, while Google Ads can drive leads quickly.

3. Overall feeling that nothing is happening. You may speak at conferences, host a podcast, write articles, and not see any results. But then, after 6 months, you start acquiring customers who initially discovered you through these exact activities.

4. Requires lots of high-quality educational content. You need to build trust and expertise in what you do through articles, podcasts, videos, and other forms of content, that rarely can be written by non-domain expert. Delegating this work to a junior copywriter will not work, unfortunately.

5. Need to juggle many different tools. Software to build target account lists, find the right contacts and their contact details, setting up ABM campaigns, etc. It takes some time to properly set up the infrastructure.

To summarize, Demand Generation is akin to making a long-term investment. If you need leads today, you should focus on capturing existing demand. However, if you want to have more and higher-quality leads in the future, you should be prepared to invest time and resources today, and continue doing so even if you don't see immediate results.

You don’t have to be ‘great’

While founders often struggle with perfectionism in all areas, it's important to remember that many successful B2B SaaS companies are quite average at sales and marketing. The primary difference is scale, for sure. But, as I have mentioned in my previous article "Are you building for SMB, Mid-Market, or Enterprise?", the tactics are almost the same for similar types of businesses, and in many cases, they are basic and obvious. There are no secret sauces and silver bullets you can really steal from them, even though they might be generating 10x more revenue than you.

This means that you don't have to worry about designing the most sophisticated marketing strategy. As long as you consistently follow the basic principles described in this article, you will achieve the results you are looking for. By embracing 'boring' work, such as writing one blog article a week or hosting yet another webinar, you may not see immediate results, but it will compound over time. A year later, you will be grateful that you took these actions.