Solved: Questioning Facebook Ads Strategy for B2B SaaS Product

Hi there,

Thanks for reaching out. It sounds like you're thinking strategically about how paid advertising can play a role in building value for a potential exit, especially with a B2B SaaS product. It's a smart way to look at things – focusing on customer acquisition and MRR growth even if the immediate return on ad spend isn't high, because an acquirer values that recurring revenue stream highly.

However, while the maths on paper might suggest 'pour money in to stack MRR', the reality of running paid advertising, particularly for B2B SaaS on platforms like Meta, introduces quite a few complexities that makes it less straightforward than just breaking even on LTV.

We'll need to look at targeting precision and platform choice...

One of the first things to consider is the platform you're using. You mentioned Facebook Ads (Meta Ads). For B2B SaaS, reaching the *right* decision-makers at the *right* companies can be a real challenge on Meta compared to, say, LinkedIn. LinkedIn is built for that precise B2B targeting – job titles, industries, company size, etc. Meta's B2B targeting options are much more limited, often relying on inferred interests or broad categories like "small business owners".

This isn't to say Meta *can't* work for B2B SaaS. We've certainly seen successes, like generating thousands of software trials at a reasonable cost per trial using Meta Ads. But it's often harder to consistently dial in the targeting to reach your truly ideal customer profile compared to platforms with more robust B2B filters. This lack of precision can mean you're paying for clicks and leads from people who aren't ever going to convert into paying customers, which pushes your actual Cost Per Acquisition (CPA) for *qualified* customers much higher than you might expect if you only look at lead costs.

I'd say you need to think about scaling dynamics...

Another major factor is the nature of scaling paid ad campaigns. It's rarely linear. As you increase your budget significantly, especially on a single platform like Meta, you tend to exhaust the easiest, most receptive segment of your audience first. To maintain spend, you have to broaden your targeting or increase bid prices, which almost inevitably leads to your Cost Per Acquisition rising.

This is something we've seen quite often with SaaS clients. There's a sweet spot where you can acquire users profitably, but pushing beyond that threshold to just 'pour money in' can see your CPA jump significantly. That $100 CPA you calculated might become $150 or $200 quite quickly, making the break-even-on-LTV model fall apart in practice, even if an acquirer values them higher.

It often requires continuous testing – finding new audiences, testing completely different creative approaches (we've seen great results with things like UGC videos for SaaS, for instance), and constantly optimising to try and maintain efficiency as you scale.

And crucially, the funnel and offer matter more than you think...

Before traffic even hits your site, and then once they are there, the conversion rate of your website and the appeal of your offer are absolutely fundamental, especially in B2B. You mentioned your software charges $10/month. Even at that price point, it's a business decision, a change in their workflow. Businesses are hesitant to switch core systems like accounting (just using that as an example, not sure what your software does exactly) unless they have a compelling reason or it's incredibly easy and risk-free to try.

We've critiqued SaaS websites before where, frankly, the offer and messaging made it very hard for ads to work. Things like not offering a free trial can be a major barrier. A demo is okay, but a completely free trial where they can just jump in and use it for themselves often works much better to get people in the door for SaaS. You can then onboard and nurture those trial users.

Your landing page copy also needs to be highly persuasive, clearly articulating the value proposition. If your website converts poorly, even the cheapest clicks will result in expensive customers.

So, while boosting MRR for an exit is a valid goal, simply increasing ad spend without optimising the rest of the acquisition system (targeting, creative, website conversion rate, offer) isn't a guaranteed path to cost-effective growth.

Based on this, here's a quick overview of areas I'd suggest looking at:

Implementing and testing all these elements effectively, especially when trying to scale efficiently for a specific goal like an exit, requires quite a bit of hands-on experience and constant optimisation. It's not just about increasing the budget; it's about building a robust, scalable acquisition machine.

Navigating these nuances can be time-consuming, and getting it wrong means you're essentially burning cash without building that valuable MRR base. Working with someone who has experience scaling B2B SaaS through paid channels can help you build that system effectively and avoid common pitfalls.

If you'd like to chat through your specific situation in more detail and explore what a tailored strategy might look like, we're happy to offer a free consultation. No pressure at all, just a chance to get some more specific insights based on your current setup and goals.

Regards,
Team @ Lukas Holschuh