Audience Segmentation: Is It Any Different in SaaS?

The target audience is the lifeline of any campaign whose needs are the primary drivers of product development and marketing. But if you’re a business in the SaaS space, how will identifying your customer base be different from the traditional methods?

Having a deep understanding of how your product will be perceived and accepted by your primary audience is a crucial step in marketing a SaaS business. However, there may be times when you need to cater to different types of customers with varying needs, and in this case, taking a one-size-fits-all approach might not work for you. 

Potential buyers are looking for something that’s both software and service, so it’s important to pattern your marketing strategy to your prospects’ specific needs. We detail why audience segmentation has a key role to play when selling a SaaS product.

Segmentation in SaaS: Identifying Your Target Market

Below are some key factors to consider so you can better pinpoint who your potential paying customers are:

  • Target Buyers – Determine your target audience, including the pages they frequently visit, hashtags they often use, and which search results are most relevant to the service you’re offering.
  • Product Information –  Do some target buyers not know the exact technical information about your service? Find out which terms they use to describe your offering when they’re looking for it online, and leverage those to boost your search visibility.
  • Purchase Decisions – Find out what your target buyers look for first before availing of your service. Are they more particular with the price compared to features, or vice-versa? Then based on your findings, craft content or messaging that will highlight your service in the market and guide your targets into choosing yours.
  • Pain Points – These are your target buyers’ unique needs that your service aims and needs to address. As a fundamental rule, your differentiated value proposition must communicate how your targets will benefit from your service compared to others in the market.

Market research continues to be one of the most effective ways to tap into your target segments. But to successfully secure your targets, your market research should be as agile as your software development phase. 

Morgan Molnar, head of product marketing and insights at SurveyMonkey, recommends thoroughly understanding the entire buyer journey before taking the plunge. “First, you want to be sizing that market and segmenting the prospective buyers,” Molnar explains. “What is that total addressable market? What do they want? What do they care about competitive intelligence?” A collective consumer behavior study will help you gain insights into your target buyers’ behaviors, attitudes, and opinions, all while developing your service so that it better fits their needs.

Finding the Right Audience for Your Service

Here are some strategies to help you improve your targeting and ensure that there are minimal or no service-market mismatches as you go along.

  1. Optimize your sign-ups. Seeing so many fields to fill out on your sign-up page might discourage potential buyers from leaving their information behind, contributing to your abandonment rate. Remember, the lesser the commitment, the greater the chances of prospects hitting that sign-up button. Instead, gather more information after they’ve signed up, then use that data to create highly personalized content depending on their specific needs.
  2. Create a simple pricing structure. A straightforward pricing structure for a subscription-based service would draw prospective customers in as this makes it easier for them to decide if they will avail of a free trial. Growth marketer Sujan Patel suggests implementing per-user pricing, as prospects may immediately be overwhelmed by seeing too many options and end up not knowing which package to choose or how much to shell out. A simpler payment scheme is more likely to bring better results and increase your conversion rate in the long run.
  3. Boost customer engagement. Segmenting is not enough; sustaining those segments and keeping them measurable is crucial. One of the best ways to do this is by personalizing engagement, depending on which stage the customers are in the buyer journey. Take a look at which audience segments deliver high satisfaction, use, and engagement rates. Figure out how these segments performed and apply the same approach to those that still need boosting in terms of the same parameters.

Final Thoughts

Defining your target audience pays (sometimes literally) to go back to the basics—jumping into software development without segmenting your target buyers first is often a disaster waiting to happen. And even after successfully building a stable customer base, it’s still essential to maintain a long-lasting connection with them and value their feedback to minimize churn—only then will your SaaS business be prepared enough for steady growth. 

Photography by Andrej Nihil via Unsplash

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