While attending the Software Business 2008 conference last week, I sat through a panel discussion by a few venture capitalists entitled "SaaS Steps Up to the Plate."

One of the participants was Gordon Ritter of Emergence Capital and he mentioned the title of this post during the discussion.  "Awareness to advocacy" is a key component of growing and scaling a SaaS company according to Gordon.  Essentially this is nailing the process of having people hear about you, trying what you have to offer, and then telling someone else about it.  This is consistent with traditional approaches to building a pipeline of targets and then making them loyal customers over time.  The difference with an on-demand model is that you can quickly reach a wider group and more immediately get a product in their hands to use and share with others. 

He also talked through the need to be focused on unit economics.  Meaning, how much does it take to acquire a customer or how much do you make on that customer over their lifetime?  Target 2-3x the annual subscriber fee to acquire a customer early on with it ramping down over time to 1 to 1.