Today, it is more challenging than ever to generate consistent, high-quality demand in a competitive SaaS space. When budgets are tightening and the journey of a buyer becomes more complex, satisfying results are hard to deliver for SaaS agencies, let alone the predictable pipeline their clients are craving.
Drawing from conversations with dozens of agency leaders and marketing executives, we’ve pinpointed the three biggest demand generation challenges SaaS agencies face today—and how innovative teams are overcoming each.
Table of Contents
Why is Demand Generation So Critical for SaaS Companies?
But before we plunge into the challenges, let’s first understand why demand generation is the bloodline for SaaS businesses. SaaS companies are on a subscription model requiring (unlike traditional one-time purchases):
- The constant flow of new potential
- Tactless sales cycles to drive income
- Reduce customer acquisition costs (CAC) to stay profitable
- Stable lead quality to enhance conversion rates
Doing this kind of demand generation stuff for SaaS agencies isn’t just a service, it’s their core value proposition. But now the landscape has shifted significantly.
Demand generation in SaaS is fundamentally different from any other product marketing. This model, which relies on recurring revenue, means that rather than one-time customers or “one-and-done” sales, companies need subscribers willing to keep finding value month over month. This puts unique pressure on the marketing team — not to just create initial interest, but interest from prospects that have high potential lifetime value.
Moreover, the SaaS sector has experienced unprecedented growth, leading to never-before-seen levels of competition. If we looked a decade back, there were 2-3 big players in any software category. Today dozens or hundreds of competitors are listed on G2 and Capterra in popular segments. Quality demand generation doesn’t stand out from the noise, exceptional, innovative demand signal generation does.
Related Article: https://www.adlabz.co/b2b-saas-buyer-persona-checklist
This is especially true for SaaS agencies. Unlike in-house marketing departments, which can afford protracted testing, agencies are required to deliver quickly. Since most agency-client contracts are around 6-12 months, firms need to show a meaningful impact on the pipeline relatively quickly — or else be at risk of losing business. In a 2023 industry survey, 68% of SaaS companies indicated that they moved agencies within the past two years and the main reason for moving agencies was “insufficient lead generation.”
Challenge #1: How Can Agencies Combat Rising Customer Acquisition Costs?
The cost to acquire new customers has gone through the roof across all digital channels. B2B SaaS companies saw their median CAC double in the last three years, according to OpenView’s 2023 SaaS Benchmarks report.
Why CAC is Climbing
- Saturation in paid searches: These same keywords that cost $5-10 per click are now approaching $50-75 in most competitive SaaS verticals
- The creative process: More demand for faster, excellent campaigns
- Content competition: It costs a hell of a lot more to make hot content
- Further changes to tracking capabilities: deprecation of cookies, iOS updates
Use Case: Crisis in a Fintech SaaS Agency
After a client jumped upon a part they had recently sold to Payflow (a FinTech SaaS client) and returned to them asking for a complete reset of their SOL plan, Dominion Digital (a marketing agency for FinTech SaaS clients) realized their own mistake. Their previously reliable LinkedIn campaign was now pulling in leads for $380 each — far beyond their sustainable $150 target.
“Our client was on the verge of walking,” says Maya Johnson, Dominion’s Director of Client Services. “We had to rethink everything we were doing.”
How Leading Agencies Are Solving This
So, what are the other innovative agencies doing to combat increasing CAC?
1. Account-Based Marketing (ABM) Precision: Instead of blanket campaigns, they are focusing on specific high-value accounts with tailored outreach. Dominion Digital built custom landing pages for each of Payflow’s top 50 prospect companies that included industry-specific case studies and a personalized video message from account executives. In any case, the core ingredient for their breakthrough was hyper-personalization at scale. Every landing page included: Industry-specific calculations for return on investment testimonials from comparable companies to the challenges previously discussed in the prospect’s earnings examples of integration with tools the prospect company was already using“We got away from thinking about leads, and we started thinking about accounts,” Johnson says. “When a CFO lands on a page that speaks to exactly their pain points and dasher language, the difference in conversions is stark,” she added.
2. Community-Led Growth: Niche communities for prospects to gather cost less to acquire. CloudSync Agency realized the need for a Slack community for RevOps professionals which is one of the natural demand generation channels for their clients with an acquisition cost 72% lower than paid channels. Their strategy was more than just building a community space: Weekly “Ask Me Anything” forums with experts (without direct sales pitches) Spotlights of members and success stories (some as direct clients) Resource libraries with tools and templates (including some limited free access to client solutions) Job board and networking activities”The community became a trusted place where our clients could show their chops instead of sell something,” says CloudSync’s Community Director, Alex Rivera. “When members came looking for solutions, we were the natural first stop for our clients.”
3. Content Partnerships: Working with complementary (not competing) vendors that also reach the same audience to create co-marketing content to share and expand the content reach without expanding budgets. DigitalSphere Agency linked their HR tech client and a payroll services provider in a collaboration that produced a co-branded salary benchmarking tool that drove leads for both companies at a 40% lower cost. What made this collaboration especially effective was:
- Data assets combined to yield insights no one of us could offer alone
- Promotion with both customer bases
- Webinars jointly presented the benchmark results
- Combined follow-up nurture campaigns
4. Channel Diversification: The best agencies are revisiting underutilized channels with less competition: Podcast sponsorship on specialized industry shows (combined with agency-negotiated performance pricing) Direct mail for limited but high-value prospects (integrated with digital touchpoints) Event marketing (virtual and in-person) Interactive content (assessments, calculators, configurations) Text messaging campaigns for bottom-of-funnel prospects (78% open rates versus 21% for email) Strategic relationships with influential players in the industry employee advocacy programs utilizing client team networks”The agencies winning today know there’s no magic bullet channel,” says marketing analyst Maria Gomez. “They are creating integrated, multi-channel experiences where each touchpoint builds on the others,”
Using these techniques, Dominion Digital was able to reduce Payflow’s CAC by 47% over three months, all without sacrificing lead quality—and save the client relationship. Furthermore, the new method provided opportunities to sell more services, leading to a 28% increase in the client’s annual contract value., increasing the client’s annual contract value by 28%.
Challenge #2: How Can Agencies Create Content That Converts?
Content marketing has also been a cornerstone of SaaS demand generation for years. However many agencies are finding that traditional content methods are producing diminishing returns.
The Content Crisis
- Saturation of Content: Every SaaS category is saturated with the same blogs, whitepapers, and ebooks
- Shift in focus: 52% of blog posts never see engagement
- Generic content creates a trust deficit and does not provide real authority
- Unrelated content: Assets not intuitively connected to buyer trip level
Go to the REAL LIFE EXAMPLE: The security SaaS content fail
With over $120,000 spent to construct a vast resource library for the endpoint security client SecurePoint, CyberShield Agency trained up. Over 9 months, we churned out 75+ blog posts, 12 whitepapers, and 4 ebooks, but lead generation had only increased by 6%.
“We were generating good traffic with high-quality content, but it wasn’t converting,” explains Devon Miller, CyberShield Content Director. “There was a fundamental disconnect between content consumption and conversion.”
How Leading Agencies Are Solving This
The best SaaS agencies are revolutionizing their content approach:
Activate Demand With Original Research: Rather than relying on opinion pieces, they’re generating proprietary research that offers unique insights customers cannot find anywhere else. With the help of a cybersecurity analyst, CyberShield surveyed 500 CISOs to understand their endpoint security challenges, producing an annual State of Endpoint Security report that drove 380% more leads compared with traditional content. The research approach worked because it did the following:
- Answered questions rivals weren’t addressing
- Supplied benchmarking data security leaders couldn’t find elsewhere
- Developed a newsworthy aspect that brought in industry press
- Established thought leadership positioning in a saturated market
“The report of ours got mentioned in Dark Reading and Security Week,” says Miller. “That type of third-party validation was worth dozens of regular blog posts.” The changing element was making the research actionable, not just informing. Each finding came with actionable recommendations, and the report tied all of these back to features in SecurePoint’s solution.
Interactive decision tools: Conventional content is being substituted by interactive tools that assist prospects in making decisions while tracking intent data. GrowthForge Agency designed an ROI calculator for their marketing automation client that converted at 35% vs 2% for their traditional whitepapers. These tools are incredibly effective for demand generation because they:
- Optimize your current data and make the best out of it.
- Gather actionable first-party data about the needs and challenges of prospects
- Follow-up campaigns with natural segmentation
- Show some product value without a full demo
“The calculator was our client’s most powerful sales enablement tool,” says Taylor Wong, Strategy Director at GrowthForge. “Sales reps would ask marketing to send leads through the calculator first because it so effectively primed conversations.”
Content Experiences: Where forward-looking agencies are designing holistic journeys around their content, as opposed to a singular piece. And the “Conversational AI Readiness Assessment” they built for their chatbot client, which directed prospects down personalized, content-themed pathways based on answers, led to a 215% increase in sales-qualified opportunities. The experience of the assessment included:
- A 7-question diagnostic on technology readiness, use cases, and goals
- Individual results with tailored suggestions according to response trends
- A custom resource library with industry- and stage-specific case studies for the prospect
- Email drip addressing specific challenges identified as you would follow up
“Compared to our whitepapers, where prospects are spending 90 seconds on average, they’re spending 14 minutes with the assessment,” says Jordan Taylor, Experience Designer at Digital Velocity. “Most importantly, the sales team got background on every lead.
Micro-Content for Multi-Channel Distribution: Dividing rich content into small chunks unique to a platform expands accessibility and engagement. TechMarketing Agency turned their client’s 25-page guide into 15 LinkedIn posts, 8 short-form videos, 3 infographics, and a 5-part email series and generated 3.4x more leads from the same core content. The micro-content strategy worked because:
- Connecting with prospects on their favorite platforms and formats
- Providing different paths into the conversion funnel
- Longer shelf lives for content through diverse distribution
- Using performance data to experiment with messaging angles
We stopped thinking about the content in pieces and started thinking about the content in systems,” says Dana Rodriguez, TechMarketing’s Content Director. “Every component has its role in the buyer journey.”
Accelerated Social Proof: Top agencies are strategically collecting and promoting success stories from their clients. For data integration client CloudMark Agency, they created a “customer evidence engine” that automated the collection of user testimonials, usage statistics, and success metrics, and generated new social proof every week — instead of every three months. This approach generated:
- 55+ customer reviews (up from 8)
- 12 in-depth use cases, with ROI-specific metrics
- Sales Enablement Videos Soundbite Library
- Customer success stories as ongoing social content
These strategies proved immensely effective, as CyberShield saw their SecurePoint conversion rates rise from 1.2% to 5.7% and over the following quarter, generated 189 qualified opportunities. From cost center to revenue driver as measurable pipeline attribution grows from 12-41% of all opportunities
Challenge #3: How Can Agencies Align Marketing and Sales for Better Conversion?
One of the highly frustrating demand generation challenges for SaaS agencies is a gap between marketing-generated leads and sales team follow-up. 98% of MQLs don’t close into sales, according to SiriusDecisions.
The Alignment Problem
- Quality issues: Sales teams dismiss marketing leads as “poor quality”
- Follow-up shortcomings: 50% of good leads get no sales follow-up
- 2 Timing Mismatches: Lead handoff typically happens too early or too late in the buyer journey
- Inconsistency in messaging: Promises made in marketing do not match with the conversation in sales
- Lack of holistic mapping: Important context is lost in friction between systems
The Enterprise SaaS Disconnect — A Real-World Example
For instance, RevGrowth Agency was generating 200+ MQLs a month with one of their clients — YetaScale, an enterprise billing software. Yet sales was converting to opportunities only 2.3% of the time —far behind industry standards.
“The sales team had an overtly adversarial relationship with our leads,” explains Sarah Chen, RevGrowth’s Client Success Manager. “They said prospect after prospect wasn’t budget-qualified, or they were just ‘tire-kickers. We were going around in circles blaming one another.”
How Leading Agencies Are Solving This
The top-performing SaaS agencies are doing away with the marketing-sales divide:
Service Level Agreements (SLAs) are formal agreements between marketing and sales that define criteria for lead quality, lead handoff processes, and accountability metrics. RevGrowth introduced an SLA requiring sales to call MQLs within 4 hours of their capture and dial them at least 6 times before rejecting them.
Total Pipeline Ownership: Progressive firms are adopting revenue responsibility over lead targets. For example, Amplify Agency moved from MQL targets to opportunity creation goals that the marketing and sales teams both shared, resulting in 34% better alignment and conversion rates.
Integration with Intent Data: Buyer intent signals offer vital context that can be applied across marketing and sales systems. Catalyst Agency had a client whose sales rep was not able to know exactly what content prospects had already consumed or what competitors they had researched, so they integrated third-party intent data with the client’s CRM.
Sales Enablement Content: Building materials that are tailored to the referral stage, supporting sales teams to give context to foster dialogues. For their B2B payment client, Strategic Digital produced “conversation guides” for the sales team that pinpointed talking points about the top objections for each buyer persona.
Closed-Loop Feedback Systems: Setting up processes for sales to provide feedback on lead quality that can inform the marketing efforts for future opportunities. DigitalEdge Agency designed an easy one-click feedback system (implemented in Slack) that lets sales reps rank leads and give quick context, to generate insights that would help them target better.
RevGrowth Agency’s difficult client experience MQL-to-opportunity conversion point before and after introducing their full alignment program—after two quarters with zero new leads.
The Future of SaaS Demand Generation
If we look into the future, they will have to constantly evolve their strategies for demand generation. Several trends are emerging that will define this evolution:
AI-Driven Personalization: Scaling to hyper-relevant content/ outreach powered by machine learning. The most innovative agencies are already doing:
- Recommendations of the content you should explore, based on engagement behavior
- Email soundness times with AI optimization like when to send emails tailored to the specific recipient behavior
- Dynamic website experiences based on visitors’ intent signals
- Automating personalization of outbound series according to prospect digital footprints
Valor Digital recently launched an AI system that followed prospect behavior across channels so that the system intelligently shifted messaging focus between pain points, ROI and competitive differentiation depending on engagement patterns. The end result was a 47% improvement in response rates.
First-Party Data Strategies: Building owned audiences and communities as third-party data become scarce Forward-looking agencies are:
- Building gated value tools to collect first-party intent data
- Creating branded media properties that pull in target audiences
- Interactive diagnostic assessments that TAILORED their metering of firmographic and technographic data
- Building progressive profiling systems that grow prospect profiles with time
“The agencies that will succeed are those that help clients build their own data assets versus renting access through ad platforms that are becoming costlier and costlier,” foresees marketing analyst David Chen.
Product-Led Growth Integration: The Mixing Up Of The Classic Marketing Message And Product Experiences That Create Demand Some innovative approaches include:
- Tools that are of important value for free and demonstrate product features
- Limited feature products that show value before committing to full-use interactive product tours baked into marketing collateral
- Community editions that provide easy adoption before requiring payment
“open sandbox” where prospects could explore the core functionality of the product without having a sales conversation. This resulted in a 280% increase in the qualified pipeline.
Vertical Specialization: Racing super turbo-charged in specific SaaS categories, instead of generalist play The benefits include:
- Thorough knowledge of the specific pain points and buying processes of each industry
- Cultivated corporate connections with niche publications and influencers
- Able to compare performance with relevant competitors
- Best-in-class talent with domain knowledge
“Our healthcare SaaS practice had 215% growth last year and our generalist business only 12%,” says Christina Vega, CEO of Spectrum Agency. “The demand among clients for agencies that have an inherent understanding of their particular market dynamics has grown.”
Revenue Operations Alignment: Breaking down the silos of the old departments to act on unified growth strategies. Leading agencies are:
- Integrating tech stacks that connect marketing, sales, and customer success data
- Setting up cross-disciplinary teams structured around customer experience, not building, a department.
- Creating unified reporting dashboards with a revenue impact focus
- Shared pipeline metrics as a basis for compensation models
“The best demand generation programs we’re seeing don’t differentiate between marketing activities and sales activities,” says Marcus Lee, an operations consultant. “They are focused on orchestrating buyer experiences at every touchpoint.
Sustainable, Long-Term Demand Strategy: Wants to break free from short-term lead generation tactics to create sustainable, long-term demand-building engines. This involves:
- Walking the Line Between Tactics for Immediate Acquisition And Brand-Building Efforts
- Building thought-leadership platforms to earn inbound interest over time
- Creating unique frameworks and methodologies that set clients apart
- Developing resources for buyers’ enablement that help in self-education
“The agencies providing the most value are the ones helping clients balance the ‘now’ with the ‘next,’” notes marketing strategist Sophia Williams. “They’re creating an immediate pipeline while building assets that decrease CAC over time.”
Conclusion: Transforming Challenges into Competitive Advantage
Only the SaaS agencies that innovatively adapt to this business-tough environmental factor will succeed. Other forward-thinking agencies have achieved measurable pipeline impact for their clients by taking a holistic approach that confronts rising acquisition costs, content conversion challenges, and marketing-sales misalignment head-on.
Successful agencies have a few things in common:
Data-Driven Decisions: They leverage strong analytics to constantly improve campaigns, enabling speedy responses to market shifts.
Cross-Disciplinary Expertise: They combine expertise across disciplines—from content creation to conversion optimization to sales enablement—into cohesive demand generation engines.
Continuous Testing Culture: Experimentation is systematic; 15-20% of client budgets are set aside for testing new approaches while investing in proven channels.
Tech Savvy: They humanize martech stacks to enable automation of low-value processes and refocus on creative, high-value strategy and content
Outcome Orientation: Their success metrics are aligned with client business outcomes — they emphasize pipeline and revenue impact over vanity metrics
As Megan Foster, chief executive of TechGrowth Partners, puts it: “Agencies that are going to thrive in this new environment aren’t just service providers — they are strategic partners who care about business results.” “Their selling leads, they’re not selling leads, they’re delivering pipeline.”
For SaaS companies’ assessment of agency partners, the critical questions should focus on these challenges:
- In your specific category, how will the agency combat increasing CAC?
- How do they put out content that truly converts?
- How will they keep your sales team and marketing efforts in lock-step?
- Which technologies and methodologies are used to measure as well as optimize the performance?
- How do they optimize short-term results without eroding long-term demand generation assets?
As the demand generation landscape evolves, agencies that can move quickly and execute these proven strategies not only will survive, they will also become indispensable growth partners for their SaaS clients.
The way ahead is unambiguously clear: in an increasingly competitive and complex world, the most valuable agencies are strategic partners who turn demand generation challenges into advantages that translate to meaningful business impact.
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