What Is a Good ROAS? Best Tactics for ROAS in SaaS

Online advertising is a must-have in our noisy digital world, and almost all SaaS companies advertise online nowadays. 

When you advertise as a company, you want to have positive ROAS because, in business, every dollar spent should be met with more. 

As a SaaS business owner, you may realize you can only increase your subscribers when you have positive  ROAS. Otherwise, there is no point in spending more money on strategies that do not work. 

It’s time to stop wasting money on advertising that doesn’t bring you the results you need and start taking steps to implement a proven strategy. 

As a SaaS PPC agency with over five years of experience, we have spent millions of ad dollars on SaaS projects, learned valuable data-backed strategies, and conducted a few failed experiments. 

But we have also had some very successful experiments, having spent thousands of hours testing different concepts until we found some crucial elements that have been proven to improve the ROAS of our campaigns.

In this article, our experts will delve into the significance of ROAS in the SaaS world, exploring what it means, how it differs from ROI, and crucial strategies you can use to optimize it. 

We’ll also shed light on why you should consider partnering up with a SaaS marketing agency such as Camel Digital in order to create winning SaaS PPC marketing strategies for your business. 

The Significance of ROAS in the SaaS World

Understanding the world of ROAS is important for any SaaS professional. ROAS, or Return on Advertising Spend, is a key metric used to evaluate ROAS in marketing. It tells you the exact revenue that is generated from advertising efforts compared to the cost of those efforts. 

Cost-Effectiveness

SaaS companies often operate in competitive markets where the efficient use of resources is crucial. ROAS, or Return on Advertising Spend, helps us understand how effectively advertising budgets are being used. 

For example, let’s say a SaaS company looks at how well its social media and PPC (paid search) campaigns are doing. They find out that every $1 spent on social media brings in $5, while every $1 spent on PPC brings in $6.

Even though social media is doing well, PPC turns out to be a better deal because it doesn’t need as much money to get started. So, the company decides to spend more on PPC where they get more bang for their buck, and maybe cut back or tweak how much they spend on social media.

Related reading: How to Build a SaaS PPC Strategy That Drives Leads and Boosts Subscriptions

Performance Measurement

SaaS businesses frequently use various digital marketing channels such as paid search, display advertising, social media, and content marketing. 

ROAS provides a standardized metric for measuring the performance of these channels, enabling businesses to compare and optimize their marketing mix.

As an example, a SaaS company is running paid search, display advertising, and content marketing campaigns to promote its new software product. 

By using ROAS, the company can assess the performance of each channel. 

If the paid search campaign has an ROAS of 3, the display advertising campaign has an ROAS of 1, and the content marketing campaign has an ROAS of 2, the company can identify that the paid search campaign is delivering the highest performance in terms of revenue generated per advertising dollar spent.

Customer Acquisition Costs (CAC)

Your ROAS can be compared to your Customer Acquisition Costs (CAC), and you can use both of these metrics to assess how sustainable and scalable your customer acquisition strategies actually are.

For instance, a SaaS company calculates that it spent $10,000 on advertising in a month and as a result, acquired 500 new customers. 

The CAC here would be $20 per customer ($10,000 / 500). If the average revenue per customer is $50, and the ROAS is 5 (5:1), the company knows that for every $20 spent on advertising, it generates $100 in revenue, making the customer acquisition cost sustainable and scalable.

Decision-Making

SaaS professionals can use ROAS data to make informed decisions about where to invest their advertising budgets. 

If a particular channel or campaign consistently delivers a higher ROAS, it may warrant increased investment. Conversely, underperforming channels may require adjustments or reallocation of resources.

Let’s consider a scenario where a SaaS company is running two advertising campaigns: Campaign A on a popular industry blog and Campaign B on a social media platform. After analyzing the ROAS for each campaign over the past quarter, the SaaS professional discovers the following:

Campaign A (Industry Blog):

ROAS: 8 (for every $1 spent, $8 in revenue generated)

Campaign B (Social Media):

ROAS: 3 (for every $1 spent, $3 in revenue generated)

Given this data, the SaaS professional can make informed decisions about advertising budgets:

Increased Investment

Recognizing that Campaign A consistently delivers a higher ROAS of 8, the SaaS professional may decide to increase the budget allocated to the industry blog advertising. 

This decision is based on the understanding that the return on investment is higher for Campaign A, indicating that additional funds spent here are likely to generate more revenue compared to Campaign B.

Adjustments or Reallocation

On the other hand, Campaign B, with ROAS of 3, is underperforming in comparison. 

The SaaS professional might decide to either optimize the social media strategy to improve performance or consider reallocating some of the budget from Campaign B to Campaign A or other potentially more lucrative channels.

When using ROAS data in this way, the SaaS professional can make sure that advertising budgets are strategically allocated to maximize returns and drive the overall success of the marketing efforts.

What Does ROAS Mean for SaaS?

When companies want to sell things, they spend money on ads to make more money. How good those ads are at making money is really important.

What is ROAS? ROAS is like a measuring tool that helps you figure out how effective your ads are. It shows you how much money you’re making compared to how much you spent on ads.

For people who sell software services (SaaS professionals), ROAS is a very helpful guide. It helps you see which ads are working well and making real money.

Imagine ROAS as a smart guide that can change and adapt to new situations. Ads and marketing are always changing, and ROAS helps you make quick decisions based on how well your ads are doing right now.

This guide helps you choose the best ways to spend your money on ads so you can make the most money back. That way, you know that you’re making a profit and selling your services efficiently!

What is Considered a Good ROAS?

When asking “what is a good ROAS?”, the general benchmark varies across industries, but in SaaS, achieving a ROAS of 4:1 or higher is often considered commendable. 

However, you need to recognize that what constitutes a “good” ROAS can depend on the specific goals and circumstances of each SaaS business.

Suppose a SaaS startup sets a goal to achieve a ROAS of 5:1 for its new product launch. After the campaign, the company evaluates its performance and discovers that the actual ROAS achieved is 6:1. This surpasses the initial goal, indicating a highly successful advertising initiative.

How to Calculate ROAS

There are 4 key steps to calculating your ROAS. 

Determine the Revenue from Ads

SaaS businesses typically use the LTV (Lifetime Value). Simply multiply your total number of conversions by the LTV, and you will get an estimated revenue.

Identify the Cost of Ads

Calculate the total cost associated with the advertising efforts, such as platform and agency fees, hiring a marketing manager, fees from working with a consultant, and any other costs directly related to running the advertising campaign.

Apply the ROAS Formula

Want to know how to calculate ROAS? Just plug the values into the formula: 

ROAS = Revenue from Ads/Cost of Ads 

​Interpret the Result

The resulting number is the ROAS, representing the return on investment for the advertising campaign. 

For example, if the ROAS is 5:1, it indicates that for every dollar spent on advertising, $5 in revenue was generated. 

How to Set Up Analytics Platforms to See Your ROAS

Now that you know how to calculate your ROAS, let’s go over how you can set up your analytics platforms to track it during your campaigns (because you need to first track your ROAS in order to calculate it).

Google Analytics

You can start tracking your ROAS on Google Analytics if you have made your ad spend data (cost data) available in the reporting view. 

Here are a few steps you can take to set up your ROAS tracking on Google Analytics: 

1. You can access ROAS data in Google Analytics by navigating to ‘Acquisition’ > ‘All Traffic’ > ‘Channels.’ Here, add the ROAS metric under the ‘Conversions’ section. Make sure you have eCommerce tracking or goal values set up to see this data.
2. Connect your Google Ads account to Google Analytics to track ROAS for those campaigns automatically. This integration allows for the automatic importation of cost data.
3. For platforms like Bing Ads, manually import cost data into Google Analytics or use tools like Opteo or Revealbot.
4. Accurately assign monetary values to each goal conversion to reflect the revenue generated from each action.
5. Ensure you have a minimum of 30 days of SaaS conversion data, goal conversion data, and cost data for a robust analysis.

Google Ads

On your Google Ads for SaaS dashboard, go to “columns/ conversions” and pick the metric “conv value/cost – this is your ROAS.

Bear in mind that to use this metric, you need to apply a conversion value under the conversion settings or use Google Tag Manager and data layers.

Facebook 

On your Facebook Ads dashboard, click on “customize columns” and then pick ROAS to start tracking it. 

For this to work, make sure that you have sent the conversion value data to Facebook. When you download Facebook pixel events, add a conversion value in the event code. 

See the full list of standard event codes for Facebook Ads to use when setting up your conversion tracking.

One of the best ways you can track your data across Google Analytics, Google Ads and Facebook all at once is by using Google Tag Manager and sending your data to its data layer.

Challenges of SaaS ROAS

1. Data Discrepancies

Discrepancies in data across advertising platforms can lead to inaccurate insights. Variances in reported metrics between platforms may complicate efforts to evaluate the true impact of advertising campaigns.

Implement efficient analytics and reporting tools such as Mixpanel or use tracking marks such as UTM marks that record all conversions and revenue at their backend to compare the actual number as opposed to the numbers that are displayed in analytics platforms. 

As such, you are consolidating data from multiple platforms and ensuring consistency and accuracy in your measurement.

2. Attribution Challenges

Attributing conversions accurately to specific ad campaigns is complex, especially in a multi-touchpoint customer journey. Challenges include tracking only first-touch interactions, attributing all conversions (including those not directly linked to ad clicks), and measuring conversions from brand awareness campaigns. 

To overcome these challenges:

• Set up all necessary events on advertising platforms, preferably using Google Tag Manager.
• Ensure all tracking pixels are implemented correctly.
• Use UTM tags at the end of URLs.
• Leverage SaaS company backends or CRM systems to capture UTMs, GCLID, and FBCLID cookies for conversion tracking.

Implement advanced attribution models, such as multi-touch attribution, to more accurately distribute credit across multiple touchpoints and channels.

3. Data Quality Issues

Relying on incomplete or inaccurate data for decision-making poses a significant challenge. Inaccurate customer information or missing conversion events can lead to unreliable insights.

Regularly audit and clean data sources, ensuring data accuracy and completeness. Invest in data quality tools and practices to maintain a reliable dataset.

4. Adapting to Algorithm Changes

The ever-evolving algorithms of advertising platforms can impact the performance of campaigns. Sudden changes in algorithms may require quick adaptations to maintain ROAS.

Stay informed about platform updates, be agile in adjusting strategies, and diversify advertising channels to mitigate the impact of algorithm changes.

Opportunities for SaaS ROAS

1. Advanced Analytics and Machine Learning

Using advanced analytics and machine learning algorithms can increase the effectiveness of your targeting and optimize ad spend based on your existing performance data.

Invest in tools like Google Analytics that incorporate machine learning to analyze user behavior, predict outcomes, and dynamically adjust advertising strategies.

In order for machine learning to work on any platform, data is needed. In the first months of investing in your advertising, you need to get as much data as possible. 

• Conversion tracking should be in place
• You should send conversion values back to the platforms. you can use Google Tag Manager and feed the GTM data layer and send it back to advertiser platforms. 
• You should be getting actual conversions. 

You should measure as many conversions as possible, including: 

• If someone signs up on the platform – that’s a sign-up conversion. 
• If someone becomes a lead – that’s another conversion. 
• If someone subscribes to your service, it’s another conversion. 

Each campaign on any advertising platform should be optimized towards one main goal. 

For instance, if you own a mapping software where users subscribe to a $20 plan/month, your main goal should be getting subscribers – paid users. 

If you want to get as many signups as possible regardless of payments – you can set up sign-up as the main goal. If you want sales leads, you should set up a demo or form submissions as your primary goal. 

You need to feed as much data as possible. From the very beginning, try to remove spam submissions and conversions. You need only the best data for advertising platforms. 

How to Change User Targeting 

If you get a lot of spam submissions from your campaigns, you’re most likely training algorithms to attract spammers, so make sure form submissions or sign-ups are good quality right from the start. 

How can you do that? 

• Filter your traffic – add negative keywords to Google Ads. If you are getting students or old people but want more business users, adjust your demographic targeting, remove people 18-24 years, 65+ years.If you are getting insurance quotes and not insurance agents to use your software, then change the targeting; try to target people in the business space according to their demographics and interests. 

• For Google ads, you need to have had 30 conversions within the last 30 days. You can do the job with 5-10 conversions, but the more the better when it comes to machine learning. Bear in mind that you should always structure your campaigns to be machine learning-friendly. 

• For Google Ads, use multiple match types under one ad group, and try to group similar keywords together. You want to have more impressions per ad group per week – that way, Google can actually start learning because you are getting impressions. The more impressions you get, the better chance for Google to understand what your conversion is. 

• On Facebook, try not to use very narrow targeting. Aim to target 1M people in your group – FB likes broader audiences for their algorithms to understand and learn from lots of people interactions – who will be the guys converting more. If your target is too narrow, Facebook won’t be able to learn. 

• Aim to have fewer ad sets under the campaign. Don’t divide placements. Use automated placements. Ideally for Facebook, it needs 50 conversions in 7 days to exit the learning phase and start using machine learning optimally. 

• For LinkedIn, try to target at least 100K audiences to give the platform a chance to learn. If a person sees an ad 6-8 times, they are more likely to convert, so try to use 5 different images or creatives in the ads and increase their frequency.

2. Personalization and Segmentation

Personalized and segmented advertising can significantly improve your ROAS, and tailoring messages to specific audience segments based on their preferences and behavior enhances engagement and conversion rates. 

However, broader audiences perform better for platforms such as Facebook and Linkedin. If the target audience is too specific, it will limit machine learning and make the costs per impression very high.

Utilize customer data to create targeted campaigns, implement dynamic content personalization, and conduct A/B testing to optimize messaging.

3. Cross-Channel Integration

Combining your data and strategies across various channels is a strong approach, as you get to have an overall view of your customer journey, which optimizes your ROAS. 

4. Customer Retention Strategies

Investing in customer retention strategies can enhance the lifetime value of your customers. The link between ROAS and customer retention becomes especially important for SaaS models.

You can develop and advertise loyalty programs, personalized communication strategies, and customer feedback mechanisms that retarget your existing users and existing signups with case studies. 

You can even introduce new offers, such a limited-time subscription offer, that encourage your users to become paying subscribers. 

These strategies can also be used to retarget people who carry out an action inside the tool and hit the paywall. 

For instance, if you have existing users who want to access a locked resume template but find out that they need to pay to access it, you can create an ad about templates that target that group.

How to Improve ROAS for SAAS

It’s good to note that one of the key factors in improving your ROAS is for you to have a very good conversion rate. If your average cost per click is $10 and the conversion rate is 1% to become a paying user, then it will cost $1000 to get one paying customer. If you can convert 2 out of 100, it is already $500; if you can convert 4, it is $250, and so on. 

Your conversion rate can be improved with: 

• The quality of traffic is coming in. You can do this by constantly monitoring negative keywords and ensuring the right audience is coming to your site. 
• Your landing page. Is it clear? Can users understand what it is about the second they lay their eyes on it? Is it solving their pain points, and does it give actual value? You need to factor all of these in when creating the page. 

If you’re wondering how to increase ROAS, consider the following tactics to improve performance and reduce acquisition costs. 

Right Targeting

• Identify and understand your ideal audience or customers.
• Use demographics, interests, and behaviors to target the right people.
• Focus on reaching those most likely to be interested in your product or service.

Dynamic Ad Content

• Create ads that automatically change based on the user viewing them.
• Tailor your ad content to match individual user preferences or behavior.
• Increase relevance by showing personalized content, which can boost engagement and conversions.

Leverage Retargeting

• Re-engage with the users who have visited your website but didn’t make a purchase.
• Show ads to people who have already shown interest in your products.
• Use personalized messaging to remind potential customers about your offerings.

Optimize Landing Pages

• Ensure your landing pages are relevant to your ad content and user expectations.
• Streamline the conversion process on landing pages to reduce friction.
• Test and optimize elements like headlines, images, and calls to action for better performance.

Here’s a comprehensive guide on how you can improve the ROAS for your SaaS company:

1. Right Targeting

When it comes to your main audience, you should aim not to be too specific, as algorithms need to learn who to target. 

Adjust the ad copy to be super relevant to your target audience, and advertise the solution to meet their deepest pain points, reassuring them that you can solve their problem quickly. 

To do this in the most efficient way, you should know your ideal customer profile – ICP – and target them on different advertising platforms. 

You should target your ICP’s location, their interests, job titles, what industry they are in, and what things they are interested in.

For example, your ICP can be based in the urban areas of North America, has an interest in technology for business growth, has the job title of a Chief Technology officer who oversees the overall technology strategy of their business, is in the Financial Services sector, and has a particular interest in automating repetitive tasks. 

Targeting is one of the ways to increase your conversion rate, and the better the traffic that comes to the website, the higher the chance of it actually converting. The higher your conversion rate, the higher your ROAS will be. 

2. Use Right Messaging

Do you own a freelance invoice generator and need more users? 

Well, you need to target people who are interested in small business, freelancing, freelancers and other relevant niches. 

Your messaging should be based on their biggest pain points. 

Consider how freelancers need to do everything themselves, deliver work, communicate with clients, and write invoices, and contracts. 

An invoicing tool that can do invoices automatically for them is exactly what they need. 

As such, your messaging can look something like this: 

“Create invoices online in seconds – automate your invoice creation and spend time on delivering work, not writing invoices.”

Using the right messaging words that address the pain points of your target users (in this case, having to do all their work alone and needing assistance with creating invoices) can increase your conversion rate and ROAS in turn.

3. Retarget the Smart Way

So how can SaaS companies retarget their audience to effectively improve their ROAS?

Well, if you have a lot of traffic, the most efficient way is to retarget people within 1-3 days as more than 50% of people tend to convert within 24 hours. 

At Camel Digital, we can usually see under the “time lag” section in our clients’ Google Analytics under the “time lag” that the majority of users convert in the same day. 

So, you should carry out dynamic retargeting ads while your users are “hot” and in the mood for shopping.

Now, you may be wondering, how do you retarget high-intent audiences?

• If your users started checking out, entered the credit card for their services and then left, you need to create a pixel event for that, collect your audience’s data, and then retarget them with the ads to finish their subscription. Perhaps you can even offer them an incentive such as a discount!

• Now, what if you have users who want to use a feature that is locked under the paywall? They realize that they need to pay to download it. Retargeting your interested audience is the most wise decision you can take. Do this by encouraging them to purchase a premium plan through a tailored message that addresses their pain. This type of audience is more likely to pay. Why? Because they are much closer in the funnel.

4. Optimize Landing Pages

Your landing page is super important for anyone looking at how to improve ROAS, since small design fixes can impact conversion rates. The higher your conversion rate is, the much lower your acquisition cost will be. 

When creating your landing page, make sure that it is answering your users’ pain points and needs. It should be optimized towards one single goal. 

Your messaging and positioning should be clear from the very start, as well as provide at least 3-4 value propositions as to how a user can solve their problem. 

For example, if your user’s issue is invoicing, the solution would be to create invoices automatically, save their valuable time, and use templates that will not require the user to start from scratch – one that is very easy to use and there is no set up needed. 

Your call to action, the first thing users can do when they sign up, should address what they want to do, so it should look something like “Create your invoice”

To show your credibility, make sure to add social proof and reviews from platforms such as G2 and Capterra somewhere higher on the page, and have a list of features at the bottom of the page.

Boosting SaaS ROAS: Camel Digital’s Insight

At Camel Digital, a trailblazer in SaaS marketing strategies, we have consistently demonstrated our ability to optimize the ROAS of our clients. 

Let’s take a look at one standout case study that showcases our ROAS SaaS success and overall impact, emphasizing the numbers and infographics that underline our success.

How We Achieved a 233% ROI in 2 Months for Hopper HQ Social Media Scheduler

In collaboration with Hopper HQ, a leading social media scheduler in the SaaS industry, our team at Camel Digital executed a strategic campaign that brought about remarkable results. 

Our strategy resulted in an astounding 233% Return on Investment (ROI) within a mere two months. 

By optimizing ad placements, refining creatives through A/B testing, and implementing advanced analytics, we not only achieved unprecedented ROI but also significantly enhanced Hopper HQ’s brand visibility and user engagement.

For a deeper dive into this success story and to explore more examples that underscore Camel Digital’s commitment to driving SaaS ROAS to new heights, visit our case studies page. 

Our team continues to set the standard for excellence in SaaS marketing, providing tangible and measurable results for our clients.

Ready to boost your ROAS game and achieve long-term success for your SaaS business? Get in touch!

What Is the Difference Between ROAS and ROI?

Distinguishing the difference between ROAS vs ROI is fundamental for shaping effective strategies

ROAS lets you see how much money you are making compared to how much you are spending. The higher your ROAS, the more return you are getting for your money!

On the other hand, your ROI tells you how profitable the whole investment is for you, not just your advertising costs. 

The ROI formula, often used alongside SaaS ROI analysis, considers all your costs, providing a general view of how profitable your business is, while the ROAS is more concerned with how profitable your ad spend is. 

Understanding these differences is crucial for SaaS strategy. ROAS is a key performance indicator for marketing efficiency, guiding decisions on individual campaigns. 

Meanwhile, ROI paints a comprehensive financial picture, influencing strategic decisions on resource allocation and overall business health.

Taking account of these distinctions empowers SaaS professionals to fine-tune their strategies for both immediate advertising efficiency and sustained business profitability.

Tracking and Enhancing SaaS ROAS

To calculate your ROAS, take the money you made from your ads and divide it by how much those ads cost you. Then, multiply by 100 to get it as a percentage. 

This formula will give you a clear picture of how awesome your campaign is (or not). 

For a practical illustration, let’s consider a scenario where a SaaS company spends $1,000 on a marketing campaign and generates $5,000 in revenue. The ROAS calculation would be:

ROAS = $5,000/$1,000 x 100 = 500% 

This means that for every dollar spent on advertising, the company generated $5 in revenue, or a 500% return on advertising spend.

It goes without saying that implementing advanced tracking tools and technologies is essential for accurate measurement and analysis. 

While tracking ROAS, it’s imperative to avoid common measurement mistakes. You should take note of data discrepancies, attribution challenges, and data quality issues to ensure precise insights. 

Misinterpreting or neglecting these factors can lead to inaccurate assessments of your campaign’s performance.

Avoiding Common Measurement Mistakes

You need to address these common mistakes that we are about to mention to make sure you are fully measuring your campaign’s performance.

Incomplete Tracking Setup

A lot of individuals fail to set up comprehensive tracking for all relevant metrics. Make sure that tracking tools are correctly implemented for all aspects of your campaign, from clicks to conversions.

Ignoring Attribution Models

Overlooking the different touchpoints a customer may have before making a purchase is a mistake.

So, use appropriate attribution models to understand the contribution of each touchpoint in the customer journey.

Not Considering Customer Lifetime Value (CLV)

Only focusing on immediate sales without considering the long-term value of a customer isn’t very helpful. Be sure to factor in CLV to measure the overall impact and sustainability of your campaigns.

Relying Solely on Click-Through Rate (CTR)

Don’t try to place too much emphasis on CTR without considering other crucial metrics. Look at a range of metrics (conversion rate, cost per conversion) for a more holistic view of performance.

Forgetting to Exclude Internal Traffic

Don’t include visits from your team or yourself in the tracking data. You can implement filters to exclude internal traffic, ensuring accurate metrics that represent genuine customer interactions.

Not A/B Testing

Try not to roll out campaigns without testing variations to understand what works best. You can conduct A/B tests to identify the most effective elements of your campaigns and optimize accordingly.

Data Discrepancies

Different sets of data that don’t match will lead to inaccurate results, which won’t make you able to see the actual performance of your campaign. 

A SaaS company runs an advertising campaign across multiple platforms, including social media, search engines, and a third-party analytics tool. After the campaign concludes, they compare the performance metrics from each platform. 

However, they notice a significant variance in the reported click-through rates and conversion numbers. 

The social media platform reports higher engagement, while the analytics tool indicates lower conversions. This discrepancy makes it challenging for the company to accurately assess the true impact of their advertising efforts. 

To avoid this mistake, they should invest in more robust tracking systems or rely on a single, reliable analytics platform for consistent data. 

By consistently using utm metrics, picking up google and other advertising cookies in their backend or CRM, and using third party in-depth analytics tools like Mixpanel, Segment and Funnel, the company can understand every aspect of your campaign.

Attribution Challenges

Accurately attributing conversions to specific ad campaigns is complex, particularly in a multi-touchpoint customer journey. Determining which touchpoint gets credit for the conversion can be challenging.

A SaaS company uses a multi-channel marketing approach, involving social media ads, email campaigns, and influencer partnerships. 

A potential customer interacts with the company’s social media ad, receives an email, and later makes a purchase after clicking on an influencer’s recommendation. 

Determining which channel gets credit for the conversion becomes complex. If the company attributes the conversion solely to the influencer, it overlooks the role of the social media ad and email in the customer’s journey. 

To address this attribution challenge, the company should employ advanced attribution models or tools that provide a more general view of the customer journey, giving credit to multiple touchpoints that contributed to the conversion.

A good way to do this is to use various tools in Google Analytics, such as the ones below: 

Attribution Models 

• Navigate to your Google Analytics account and select the desired property/view.
• In the left-hand menu, click on “Conversions” and then “Attribution.”
• Here, you’ll find the “Model Comparison Tool” that allows you to compare different attribution models.
• Google Analytics offers several attribution models, such as Last Interaction, First Interaction, Linear, Time Decay, and more.
• Experiment with these models to see how they assign credit to different touchpoints.

Multi-Channel Funnels

• Within the “Conversions” section, go to “Multi-Channel Funnels” and then click on “Overview.”
• This feature provides insights into the various channels that contributed to conversions.
• Explore the “Top Conversion Paths” report to see the sequences of touchpoints that led to conversions.

Assisted Conversions

• In the “Conversions” section, go to “Multi-Channel Funnels” and click on “Assisted Conversions.”
• This report shows you the number of times each channel assisted in conversions, even if it wasn’t the last interaction before conversion.

Custom Reports

• You can create custom reports to tailor your analysis. In the “Customization” tab, click on “Custom Reports” and add the dimensions and metrics relevant to your attribution analysis.
• Include dimensions such as Source/Medium, Landing Page, and Campaign, along with conversion metrics.

Google Analytics 360 and GA4

• If your business has more advanced analytics needs, consider upgrading to Google Analytics 360 for enhanced features, including more customizable attribution models.
• GA4 (Google Analytics 4) is the latest version and provides a more user-centric and event-based tracking system, allowing you to better understand your user journeys.

Third-Party Tools

You can also explore third-party tools like Attribution, Bizible, or Wicked Reports that provide you with a more advanced attribution modeling, beyond what Google Analytics provides.

Data Quality Issues

Using wrong or not enough information during data collection is a big problem. 

Let’s imagine a software company that sends emails to people and uses a computer system to keep track of who opens the emails and buys things. But, when they check, they find out that the computer is not always getting all the information the company needs. 

For example, the system might not know when someone buys something from a specific webpage. So, the company thinks fewer people are interested or buying, when really, the computer isn’t showing the whole picture.

To fix this, the company needs to check and improve how it collects data. They might need new tools such as Mailchimp to track things better, make sure the information is consistent, and regularly check if everything is correct. 

Practical Steps to Implement SaaS ROAS Strategies

Now, how exactly do you implement the best strategies to increase your SaaS business’ ROAS in a practical way? 

Well, it starts by creating a marketing campaign that makes full use of your data. Let’s cover a few steps on how you can do this. 

Clearly Define Your Objectives 

Start by clearly defining your marketing objectives within your overall SaaS marketing funnel. Whether it’s increasing sign-ups, increasing your free trial conversions, or expanding your user engagement, having specific and measurable goals is so, so important. 

Carry out A/B Testing 

Carry out A/B testing on various elements of your marketing campaign, such as email subject lines, ad copies, and landing page designs. It is this iterative testing that helps optimize your strategies based on your real user responses.

Utilize Your CRM Data 

Implementing customer relationship management (CRM) data into your marketing efforts lets you have a general view of your customers’ interactions, preferences, and history, which then lets you carry out personalized communication and campaigns that target that group.

Measure and Optimize 

Regularly analyze the performance of your campaigns using key performance indicators (KPIs), optimize them based on the data insights, adjusting any of your strategies that are not delivering the results you seek. 

Invest in Your Customer Feedback 

Yes, your customers’ opinions matter, and more so than you may think. So, collect and analyze customer feedback so you can understand their needs and pain points. This data can also be used to improve your product, address customer concerns in your marketing campaigns, and showcase all your customer success stories.

Integrating ROAS with Other SaaS Metrics 

ROAS doesn’t operate in isolation. Explore how it aligns with other critical SaaS metrics like Customer Acquisition Cost (CAC), Lifetime Value (LTV), and churn rate. Understanding these interactions provides a holistic view of your SaaS performance. 

When integrating ROAS with other metrics, you can optimize resource allocation, identify areas for improvement, and enhance overall business profitability.

Setting Realistic ROAS Targets for SaaS

Begin by clearly defining your business objectives. Whether it’s acquiring new paid users, increasing free trial sign-ups, or promoting specific features of your product, you want to align your ROAS targets with these broader goals.

Be sure to review past performance data from your advertising campaigns. Analyze the ROAS achieved in previous campaigns to understand what has been realistic for your SaaS company historically.

Your customer lifetime value is very important when setting your ROAS targets. Understanding how much revenue a customer is likely to generate over their entire relationship with your company provides a fuller perspective on advertising ROI.

Research and benchmark your ROAS targets against your SaaS marketing budget and typical industry standards, which can provide helpful context that aligns your goals with common performance levels in your sector.

Lastly, try and consider the length of your sales cycle when setting your ROAS targets. If your product requires a longer decision-making process, be patient and set realistic expectations for the time it takes to see returns on your ad costs. 

Beyond Numbers: The Human Aspect of SaaS ROAS

According to a comprehensive report on ROAS statistics by First Page Sage, insights into consumer behavior and preferences are essential for SaaS companies. 

In particular, SEO-centered marketing, which involves keyword research based on what people search for and thus need the most, yielded a ROAS of 9.10 for its clients. 

Understanding the human element—what resonates with the audience, their pain points, and aspirations—converts your data points into meaningful connections. 

As explored by Alekos Creates, it is super important for ads in the SaaS industry to sound more human – be more relevant. The trick is to mix successful marketing tactics that have been tried and tested before with facts and numbers available to us as we speak. 

This way, the ads aren’t just about getting money; they’re about making connections with your users. In the big world of SaaS, being real and making an impact that genuinely helps people is a must to be successful (and stand out!)

ROAS and Customer Experience: The SaaS Interplay

When people stick around and keep using your software, that’s customer loyalty. This is very important, especially for subscription-based companies, where keeping your customers happy means a steady source of income.

To make this happen, you need to focus on making your website and user journey as smooth and enjoyable as possible. 

Happy customers are more likely to respond well to ads, leading to more sales and a better ROAS. This shows that when you put your customers first, not only does your business look good, but you also make more money. Sounds like a win-win situation, doesn’t it?

Related reading: Developing a High-Performance SaaS Marketing Plan: Step-by-Step Guide

Final Thoughts

In the world of SaaS, ROAS marketing strategies help gear your campaigns toward measurable success. 

As we’ve explored the challenges and opportunities surrounding ROAS, it’s obvious that partnering with an experienced agency is essential to grow your business.

Improving your ROAS an an SaaS business needs you to combine data-driven insights, strategic planning, and of course, the right marketing partner.

Our success stories spanning over 5 years and millions of dollars at Camel Digital showcase the experience needed to take on the improvement of ROAS in the SaaS world. 

So, don’t just take our word for it when we say that we are the go-to choice for any SaaS professional who wants to seriously increase their ROAS, achieving sustainable growth for the long term.