TLDR;
- Your early paid ads likely failed because of a weak offer and fuzzy targeting, not just because you ran them "too early." Ads amplify what you have; if the foundation is shaky, you'll just spend money faster.
- Stop defining your customer by demographics ("SaaS founders"). Instead, define them by their career-threatening nightmare (e.g., "Head of Engineering terrified of his best developers quitting"). This is the key to creating ads that actually get clicked.
- The "Request a Demo" button is a conversion killer. Your offer must provide immediate value. A free trial, a freemium plan, or a free tool that solves a tiny piece of their problem will outperform a demo request every single time.
- You can't optimise what you don't measure. Use our interactive calculator in this letter to figure out your Customer Lifetime Value (LTV). This tells you exactly how much you can afford to pay to acquire a customer and frees you from the trap of chasing cheap, low-quality leads.
- Never use "Brand Awareness" or "Reach" campaigns on platforms like Meta. You're literally paying the algorithm to find the people least likely to ever buy from you. Always optimise for conversions like sign-ups or trials from day one.
Hi there,
Thanks for reaching out. Your experience growing your SaaS really resonated, especially your points about talking to users and avoiding overbuilding features. These are challenges we see many founders face.
Your point about paid ads not working early on is especially interesting. It’s probably the most common and costly mistake we see. Most people blame the timing, but the truth is usually a bit deeper than that. It's less about when you run ads and more about what you're running them to. An ad platform is just an amplifier; it takes your existing message, offer, and targeting and shows it to more people, faster. If there's a crack in the foundation, ads will just expose it by burning through your cash.
I thought I'd jot down a few thoughts from my experience running campaigns for other SaaS companies. We’ve managed everything from getting a medical job platform's user acquisition cost down from £100 to £7, to generating over 5,000 trials for another B2B software client on Meta ads. The patterns for success (and failure) are surprisingly consistent. It all comes down to getting three things right: your Ideal Customer Profile (ICP), your Offer, and your Maths. Get these sorted, and paid ads can be an incredibly powerful growth engine for you.
Your ICP is a Nightmare, Not a Demographic
The first step, and where most ad campaigns fall apart, is targeting. I'm sure you have an idea of your customer, but I'd wager it looks something like this: "SaaS founders," "Project Managers," or "Companies with 10-50 employees." This is a demographic profile. It's sterile, generic, and completely useless for writing an ad that grabs someone by the collar and forces them to pay attention.
Generic targeting leads to generic ads. If you're targeting "small business owners," you'll end up writing copy like "Automate Your Workflow and Save Time!" The problem is, every one of your competitors is saying the exact same thing. It’s white noise. You have to go deeper.
You need to stop defining your customer by who they are and start defining them by their most urgent, expensive, and career-threatening problem. Their nightmare. Your ICP isn't a person; it's a specific, painful problem state.
Let's take your automation tool. Who feels the pain of its absence most acutely?
- Is it the agency owner who spends 10 hours every Sunday manually pulling reports for clients, terrified one mistake will cost him a major account?
- Is it the Head of Sales at a Series A startup who just missed quota because her best reps are wasting a third of their day on manual data entry instead of selling?
- Is it the non-technical founder who knows he needs to connect his CRM to his billing software but gets a cold sweat just thinking about APIs and webhooks?
These are nightmares. When you understand the nightmare, you can write an ad that speaks directly to it. You're no longer selling a vague promise of "automation." You're selling a direct solution to a very real, very urgent pain. This is the difference between an ad that gets ignored and an ad that feels like a life raft to a drowning person. Before you spend another pound on ads, you need to define this with absolute clarity.
The Old Way: Demographic ICP
"We target Project Managers at tech companies with 50-200 employees."
Generic Ad Copy
"The #1 Automation Tool for Project Managers. Save time and increase efficiency!"
The (Bad) Result
Ad is ignored. High cost per click, low-quality leads who don't understand the value.
The Right Way: 'Nightmare' ICP
"We target PMs who are manually copy-pasting status updates from Jira to Slack for 5 hours every week."
Specific Ad Copy
"Tired of being a human copy-paste machine? Stop wasting hours syncing Jira and Slack. Automate it in 2 minutes."
The (Good) Result
Ad resonates deeply. Lower cost per click, high-quality signups who are already sold on the solution.
I'd say you need to delete the "Request a Demo" button
Now we get to the second reason ads fail: the offer. I took a quick look at your site, and like 99% of B2B SaaS companies, your main call to action is probably something like "Request a Demo" or "Book a Call."
Let's be brutally honest. This is one of the most arrogant calls to action in marketing. It presumes that your prospect, a busy professional wrestling with their own nightmares, has nothing better to do than schedule a 30-minute meeting to be sold to. It's high friction and offers zero immediate value. It instantly frames your product as a complicated, expensive vitamin, not an urgent, life-saving painkiller.
Your point that "Onboarding is everything" is absolutely correct, and your offer is the very first step in that onboarding process. The job of your ad and landing page is to provide a moment of undeniable value—an "aha!" moment that makes the prospect sell themselves on your solution.
For a SaaS tool like yours, you have a massive advantage. The best way to create this "aha!" moment is to let them use the product.
- Freemium Plan: Can you offer a version of your tool that's free forever for a limited set of features? This is the lowest friction way to get users in the door. They can experience the value at their own pace.
- Free Trial (No Credit Card): This is the gold standard. Give them full access for 7, 14, or 30 days. Let them solve a real problem with your tool. Once they've automated their first painful task, the idea of going back to the old way becomes unbearable. The sale is practically made for you.
If you aren't a SaaS company, or if a free trial isn't feasible, you are not exempt. You have to bottle your expertise into something that provides instant value. A free, automated tool that does one small thing well. A detailed template. A short, actionable video course. For us, it's offering a free 20-minute strategy session where we audit an ad account and give concrete advice. We solve a small problem for free to earn the right to solve the bigger one.
You MUST replace "Request a Demo" with an offer that delivers value before you ask for their time or money. This single change can dramatically increase the number of signups you get from your ad spend.
You probably should calculate the maths that unlock real growth
The third piece of the puzzle is the maths. Most founders get obsessed with metrics like Cost Per Click (CPC) or even Cost Per Lead (CPL). They try to get them as low as possible, thinking that's the goal. It's not. Chasing cheap leads is a trap that fills your pipeline with tyre-kickers who will never convert.
The real question isn't "How low can my CPL go?" but "How high a CPL can I afford to acquire a fantastic customer?"
The answer lies in your Customer Lifetime Value (LTV). This is the total profit you can expect to make from an average customer over the entire time they stay with you. Once you know this number, everything else in your advertising strategy becomes clearer. You'll know exactly how much you can afford to spend on ads to get a customer (your Customer Acquisition Cost, or CAC) and still be wildly profitable.
The calculation is simple:
LTV = (Average Revenue Per Account Per Month * Gross Margin %) / Monthly Churn Rate
Let's break it down:
- Average Revenue Per Account (ARPA): What's your average monthly subscription price?
- Gross Margin %: After server costs, support, etc., what percentage of that revenue is profit? For SaaS, this is often very high, maybe 80-90%.
- Monthly Churn Rate: What percentage of your customers cancel their subscription each month? This is a critical health metric for any SaaS.
Let's run a scenario. Say your ARPA is £100, your gross margin is 80%, and your monthly churn is 5%.
LTV = (£100 * 0.80) / 0.05 = £80 / 0.05 = £1,600
In this case, each new customer is worth £1,600 in gross profit to your business. A healthy LTV:CAC ratio for a growing SaaS is at least 3:1. This means you can afford to spend up to £1,600 / 3 = ~£533 to acquire a single new customer.
Suddenly, that £50 lead from a LinkedIn ad doesn't seem so expensive, does it? It looks like an absolute bargain. This is the maths that allows you to scale your ad spend confidently. Use the calculator below to plug in your own numbers and see what's possible.
Interactive SaaS LTV & CAC Calculator
You'll need a campaign that actually converts
So, we've defined our ICP by their nightmare, we've created a value-first offer that isn't "Request a Demo," and we know our numbers. Now, and only now, are we ready to build an ad campaign.
A Message They Can't Ignore
Your ad copy should follow a simple but powerful framework: Before-After-Bridge.
- Before: Paint a vivid picture of their current world. Agitate the pain. Describe their nightmare in detail. "Your Monday mornings are a frantic scramble, manually exporting three different CSVs and copy-pasting data into a spreadsheet that's already out of date."
- After: Show them the promised land. A world where their problem is solved. "Imagine opening your inbox on Monday to a perfectly formatted, up-to-the-minute report. Your team is already discussing strategy, not fixing data errors."
- Bridge: Position your tool as the clear, simple bridge to get them from Before to After. "Our tool is the bridge. Connect your apps in 5 minutes and put your reporting on autopilot. Start your free 14-day trial today."
This structure works because it connects with the prospect emotionally first, then presents the logical solution. It's far more effective than just listing features.
Choosing Your Battleground (Platform & Targeting)
Where do you run these ads? For B2B SaaS, your best bets are usually LinkedIn, Google, and Meta (Facebook/Instagram).
- LinkedIn Ads: This is great for targeting very specific job titles, company sizes, and industries. If your nightmare ICP is a "CMO at a FinTech company with 50-200 employees," LinkedIn is the only place you can target them with that precision. It's expensive, but the leads can be very high quality. I remember one campaign we ran here that brought in leads for just $22 CPL for a B2B software client.
- Google Search Ads: This is for capturing high-intent prospects. You target keywords that people search for when they are actively looking for a solution, like "zapier alternative" or "how to automate salesforce reports." They are already problem-aware and solution-aware, so these can be some of your most valuable leads. One software client we worked with generated 3,543 users at only £0.96 per user using Google Ads.
- Meta Ads (Facebook/Instagram): Don't dismiss this for B2B. While the targeting isn't as precise as LinkedIn, you can target interests (e.g., people who like "Salesforce" or "HubSpot"), and more importantly, you can build powerful Lookalike audiences. Once you have a list of 100+ trial signups or paying customers, you can ask Meta to find millions of other people who look just like them. It's incredibly powerful and often cheaper than LinkedIn. One of our B2B SaaS clients got 4,622 registrations at just $2.38 each using this exact method.
And for goodness sake, please avoid the "Awareness" trap. When you create a campaign on Meta and choose "Brand Awareness" or "Reach" as your objective, you are literally telling the algorithm: "Please find me the cheapest people to show this ad to, regardless of whether they ever click or buy anything." The algorithm dutifully finds people who are not in demand because they don't engage with ads. You are paying to reach the worst possible audience. Always, always, always optimise your campaigns for the action you actually want—a signup, a trial, a lead. Let the algorithm do the heavy lifting of finding people who convert.
We'll need to look at the right structure...
Okay, that's a lot of theory. How does this translate into an actual ad account structure? You want to think of it like a funnel, guiding people from being unaware of you to becoming happy customers.
Here's a simplified structure I'd recomend for Meta ads, which you can adapt for other platforms:
- Top of Funnel (ToFu) - Cold Audiences: This is where you target people who have never heard of you. You'll use your 'Nightmare ICP' research to build your audiences. This could be a Lookalike of your best customers, or detailed targeting based on interests (e.g., people interested in competing software). The goal here is to drive them to your landing page to sign up for your value-first offer (the free trial!).
- Middle of Funnel (MoFu) - Warm Audiences: This is for retargeting people who have shown some interest but haven't signed up yet. This includes people who visited your website, watched 50% of your video ad, or engaged with your Instagram page. You show them different ads, maybe a customer testimonial or a case study, to build trust and persuade them to take the next step.
- Bottom of Funnel (BoFu) - Hot Audiences: This is for people who got very close to converting but didn't. They started the signup process but abandoned it, or maybe they visited the pricing page multiple times. The ads here can be more direct, perhaps reminding them of the key benefit or offering a little help to get them started.
By seperating your campaigns like this, you can tailor your message to the prospect's level of awareness, which makes your ads far more effective and your budget go further.
I hope these initial thoughts are helpful. It's a shift from just "running ads" to building a proper, measurable customer acquisition system. It takes more work upfront to define your ICP, perfect your offer, and understand your numbers, but it's the only way to make paid ads a reliable and scalable source of growth for your SaaS. It’s definately not about just finding the right timing.
I've detailed my main recommendations for you in a table below to make it more actionable:
| Action Step | Description | Why It Matters |
|---|---|---|
| 1. Define Your 'Nightmare' ICP | Move beyond simple demographics. Identify the specific, urgent, and expensive problem that your ideal customer is facing right now. Document it in detail. | This allows you to write hyper-relevant ad copy that speaks directly to their pain, making your ads impossible to ignore and dramatically improving click-through rates. |
| 2. Rework Your Offer | Replace "Request a Demo" with a value-first offer like a no-credit-card free trial, a freemium plan, or a valuable free resource (e.g., a template, a checklist). | It drastically lowers the friction for a prospect to experience your product's value, which will significantly increase your conversion rate from ad click to signup. |
| 3. Calculate Your LTV & Target CAC | Use the LTV formula (or the interactive calculator above) to determine what a customer is worth to you. From there, set a target Customer Acquisition Cost (CAC), typically LTV / 3. | This gives you a clear budget for your marketing. It stops you from chasing cheap, worthless leads and allows you to confidently invest in acquiring high-value customers. |
| 4. Launch Conversion-Focused Campaigns | When setting up campaigns on platforms like Meta or Google, always choose an objective that aligns with your business goal (e.g., 'Leads', 'Sales', 'Signups'). Avoid 'Reach' or 'Awareness'. | You are telling the platform's powerful algorithm exactly what you want it to do: find users who are likely to convert. This is the fastest way to get qualified traffic. |
| 5. Test 'Before-After-Bridge' Messaging | Structure your ad copy to first describe the customer's current pain ('Before'), then paint a picture of the ideal future ('After'), and finally position your product as the 'Bridge' to get there. | This narrative structure connects with prospects on an emotional level before presenting a logical solution, making your message far more persuasive than a simple list of features. |
Putting a system like this in place can feel daunting, especially when you're also trying to build a product and talk to customers. Many founders find it helpful to get an expert second opinion to make sure they're starting on the right foot and not repeating those early, expensive mistakes.
If you'd like, we offer a completely free, no-obligation 20-minute strategy call where we can take a look at your specific situation and give you some actionable advice on how to get started. It's often enough to get you pointed in the right direction.
Regards,
Team @ Lukas Holschuh
