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12 Comments

Cold Emails for SaaS

Hello, I have scaled SaaS sales using cold emails and manual outreach for SaaS solutions with AVCs in excess of £30k. Works great and if I had a SaaS in that price range I would double down on cold emails. However, I am keen to understand if anyone in the community has tried cold emails to get leads and prospects for SaaS tools in the $10-$100/month range. I suspect the cost per acquisition will be significantly higher than other channels which work for low ACV SaaS such as SEO, fb ads.

Appreciate your inputs. Thank you.

on December 1, 2019
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    I'm testing this right now — cold email for a SaaS in the $400-500/mo range targeting medspas. It's definitely more effort per lead than what makes sense for a $10/mo product, but at this price point one closed deal pays for months of outreach effort. The key for me has been making the email not feel like a cold email. I research each medspa individually and reference specific things about their business. It's slow and doesn't scale yet, but the alternative (generic blasts) gets zero responses in this niche. Would love to hear from others at similar price points — what's working?

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    However, I am keen to understand if anyone in the community has tried cold emails to get leads and prospects for SaaS tools in the $10-$100/month range.

    Yes, I have done this successfully a few times. And now teach a course on sales for early stage founders, helping them go from 0 to $10k in MRR.

    Happy to answer questions, but here are the important points...

    • You have to really understand and define your target customer - 'Spray and pray' won't work
    • You need higher conversion rates - of leads that respond to your email, you want to be closing a very high percentage of them. Ideally 50% or more
    • You need low churn and ideally some form of viral loop, where these customers refer you new customers
    • You need a realistic goal. This approach can easily take you to $10k MRR, but you probably want to find a more scalable solution from then on. Don't expect to get to $100k MRR with cold emails alone at this price point.
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      Thanks for your reply Louis. I've been an account exec for the likes of Oracle, SAP etc and so selling is what I do best. The conversion rate in enterprise sales (those who are leads) is 10%. I have never heard of or seen conversion rates of 50%, it sounds mythical. My SaaS is a membership management for massage studios. Started building it because no good solution exists for my current business. However the price point is under $100/month.

      You have had success with Gymhopper, so let's say I was launching a gym membership management software and wanted to use cold emails to get to 10kMRR as quickly as possible. Do these steps make sense:

      • Scrape yelp to get list of all gyms in the USA/ASIA (leave EU out given GDPR)
      • Use something like mailshake to build a sequence inviting to be part of beta launch
      • Once someone replies, use my traditional sales experience to run through the funnel (demos, contracts , high touch)
      • Profit ££

      Is it worth it trying this approach? My gut tells me this is not how you sell to SMB's and that my enterprise sales experience is forcing me to consider this approach.

      Appreciate your inputs.

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        Cold is blocked by spam AI filters unless you use gsuite and manual senders which does not scale.

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          Hmm.. a new fresh domain and personalized first lines in the email will do the trick. Anyways have not tried it yet, will report back with the results.

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            The learning curve is painful

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              Have you implemented cold email and had your domain blacklisted? Do you have any experience to share? Or are you the type to make passive aggressive comments on internet forums without offering any value?

              I did mention that I have not tried it and am looking for help. What I mentioned has worked for few others (new domain, personalized emails not being marked spam by AI).

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                I can understand you are frustrated. I am not the one to teach you. Here is a fellow that can. consulting.mailgenius.com. If you try to do it on your own it will be painful. They all charge money. Don't shoot the messenger. I step aside.

      2. 1

        I have never heard of or seen conversion rates of 50%, it sounds mythical.

        The last 3 SaaS projects I've worked on have been in that price point and hovered between 40-60% conversion rates (lead who replied to cold outreach --> paying customer).

        Is it worth it trying this approach? My gut tells me this is not how you sell to SMB's and that my enterprise sales experience is forcing me to consider this approach.

        I'd love to answer this question, but it really depends on what your goals are. Happy to give you my opinion if you let me know...

        • You say you run one of these businesses yourself?
        • Do you already have paying customers and a functional product? If so, roughly how many?
        • What are your sales/growth goals for the next 2-3 months? How big does this have to get, and how quickly?
        • If you get a massage studio decision maker on the phone, how likely is it that they'l convert?
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          Thank you for taking the time to reply on a Sunday. I appreciate it.

          • Yes I run massagejoy.co.uk . The booking system I use is clunky and bloated and every month I ask myself why am I paying them $120 for using something where I dont use 80% of the features
          • No, the MVP is currently being built while I focus on identifying sales channels
          • 10KMRR means this will stop being a side project. The faster I can reach it the better
          • How likely will they convert? Don't know. Dont have the MVP ready yet.

          Maybe you can ignore the massage studios bit. Consider I am selling a gym membership software (i believe you know this space well). How would you approach this sector to get your first 10KMRR knowing the space is dominated by Mindbodyonline and is a highly crowded market.

          Thank you.

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            Sure.

            So the reason I steered away from talking about the gym space is that it's (hopefully for you) very different to the massage industry.

            For gym membership software, you're (almost certainly) not just talking software, but hardware too.

            So the risks/work involved with switching to a new system are very, very high. After all, it's the backbone of their business.

            Then you'd have to consider the other advantages of their current provider (lock-in via long contracts, integrations with machines, discounts on other vendors etc etc).

            Add all of that up, and the only reason you'd switch as a gym is if

            1. You're an order of magnitude cheaper (unlikely)
            2. You're an order of magnitude better (very unlikely)
            3. They know you/someone you know and owe you a massive favour (ridiculously unlikely)

            So basically, there are only 3 options as a founder in that space...

            1. build a different product they need, slowly increase scope until you can replace their current membership system
            2. Raise loads of money and offer your membership product way cheaper
            3. Sell to new gyms without a system in place yet

            None of those are easy.

            ----------------------

            Back to massage studios...

            It's easy to find massage studios on Google/Yelp/Facebook etc.

            It's easy to get their managers (the decision maker) to talk to you.

            It's very difficult to convince them to switch membership systems.

            It's impossible to get them to commit to switching if you don't have it built and working yet.

            What approach would I take?

            First, I'd work out if you're going to be an order of magnitude cheaper, more valuable, or better at selling to 'new' studios.

            If it's the latter, then obviously you don't need any sales advice from me ;)

            if you're going to be cheaper/more valuable though, referrals/warm intros from existing, satisfied customers is how you will scale medium-term. Long-term, you can create valuable content for massage studio owners to turn this into more of an inbound funnel.

            For those first 20-50 customers, I think the thing to do is just start visiting studios and chatting to the manager about their current systems.

            Get them invested now (by asking for advice) and show how you're developing exactly what they've asked for.

            Within a few months they'll trust you enough to try using it.

            Looks like you're based in the UK. If that's the case, I'd forget email completely and go straight to cold calling. If you pitch yourself as someone looking for advice, you'll get a decent success rate of meetings booked.

            Hope you find some of this useful - what you're trying to do will be very, very hard and you probably won't get to $10k MRR for a year or so.

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              Super helpful. Yes, the massage studio biz is different than a gym, in that there is no dominant player and no requirement for hardware. My target is small studios. I will follow the approach you outlined. I agree new studios will be a much easier sell rather than going after existing studios. Thank you so much Louis, you gave me clarity on how I should proceed.