SaaS Marketing: How Companies Can Achieve Success (Episode 72)
Akeel Jabber is a technology investment director at HoriZen Capital. The firm invests and acquires Software as a Service (SaaS) companies. But he actually started out in a completely different industry: petroleum. As a petroleum engineer, he worked around Alberta Canada optimizing wells and drilling sites.
Seven years ago, he made the leap to entrepreneurship, although his interest in business started all the way back in his university days. In college, he started a recruitment firm, which gave him his first taste of leading a business. Even earlier than that, he started investing in the stock market. He made some money, and lost some money. What he learned was that public markets are volatile, and it’s hard to predict earnings.
Meanwhile, regular people have to compete with Wall Street hedge funds, who have access to far more capital and can take much bigger risks. They also have incredibly advanced algorithms that can predict which trades to make to maximize profits based on a number of different factors.
Jabber’s Journey to HoriZen Capital
Jabber discovered his passion in finding a way to replace his income with passive investments and assets. He dabbled in real estate in Canada, which provided good returns. At that point however, he was 25 years old. The real estate market was just growing too slowly for him: he wanted something with a higher reward. That’s when he invested in a physical business – a franchise gym in Canada. He learned about recurring revenue and managing contracts. Even in that model, he felt the limitations – scaling up was incredibly expensive.
Then he discovered a solution: online businesses. These businesses have the same potential for growth as physical businesses but with much fewer incurred costs. He learned about online SaaS marketing, search engine optimization, and handling growth online. He got involved with a firm that was acquiring businesses, and came on as the CEO of a small online business. Within five months, he was able to double that business’ bottom line, which showed him that he had the skill to make a difference in this space.
Two years ago, Jabber left that firm to focus on launching his own – HoriZen Capital, with a particular emphasis on working with SaaS companies. At that point in his career, his focus shifted from generating income and maximizing returns for those businesses to empowering entrepreneurship by providing mentorship and financial resources.
The Acquisition Process
What excites Jabber most about SaaS marketing is how quickly his products can make an impact, and how quickly he can get feedback from users. There are many different opportunities for growth and innovation. He prefers partnering with founders who have the technical expertise to build fantastic products, and then Jabber can come in with SaaS marketing and sales knowledge.
When he finds a partner to work with, the first thing he does is evaluate the growth opportunities. He finds playbooks to apply that would make a positive difference in the growth rate of the business. He and his team focus on data. After looking at the company’s traffic and conversions, as well as the people at the company and the ideas and skills they have, he makes a game plan on how to help. This includes thinking of other monetization strategies, minimizing lead loss, reducing overhead, and developing strategic partnerships.
SaaS Marketing and Lifetime Value of Customers
Churn is always a problem with SaaS marketing. With so many products available on the market just a click away, keeping clients around requires both a stellar product and a stellar customer-company relationship.
Under 2% a month of churn is a good place to be according to Jabber, but of course the best scenario is to have negative churn – where companies can keep customers around and continue to upsell them.
Data collection on churn is a big challenge, but incredibly useful for companies to do. It will help them find out why customers are leaving, how long they stay on average, and what they can do on a product and service level to change those numbers. Jabber has found that with even a 1% reduction in churn, a company can see exponential growth in revenue.
Investing in a good onboarding experience is crucial in minimizing churn. Showing the value of a product as quickly as possible after onboarding will help customers stick around rather than growing frustrated with learning a new software. Following a subscription model is another great way to keep customers on the product for longer.
Reaching customers is a challenge as well – Jabber has found that search engine optimization (SEO) and paid advertising were the best ways to go. Paid advertising requires more fine tuning with making sure that the money going into it is leading to the acquisitions that are needed to keep costs low and get a return. SEO on the other hand continues to reap benefits for years without a lot of monetary investment.
As it stands, HoriZen Capital has grown to eight people, and they help six to eight CEOs a week with everything from selling their businesses to growing their customer base. Originally, they would take control of 51% of the business, but over time they stepped off the gas to work with founders who were less willing to sell their companies to partners. They then work on increasing year-over-year growth and then look for further investment from venture capitalists or take over full control at that point.
Now that Jabber has found an industry that he is truly passionate about, and feels like he can make the most impact in, he’s doubling down on this field with his work at HoriZen Capital. SaaS marketing is more and more in demand, with more buyers and a growing number of companies entering the space.
With COVID and everyone being more remote, people are getting comfortable with adapting to online platforms to do tasks. Also, the media community is growing. Online content marketing and creation is becoming more and more important. With people moving online, the innovation in the SaaS space continues to excite Jabber for what’s to come.
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