In our last SaaS discovery article we answered the question, “How do You Know if Your SaaS Application is Viable in the Market?”
Assuming your app is, indeed, viable in the market, the next question you should be asking is, “Am I focused on the right audience?” This week we’ll look at why audience targeting is so important and how you can better clarify your potential audience. Keep reading to learn more.
My App is Great for Everyone!
When we ask new SaaS business owners who they’re targeting with their application, we don’t always hear, “everyone,” but we commonly hear, “this entire industry, geography, or large group of titled individuals like CEOs or CFOs.”
In theory, it’s quite possible the application could or would appeal to those audiences, but when we go through the discovery process, we often uncover much narrower audience segments within those spaces who are better suited to utilize the app.
Why a Narrow Focus Often Yields Better Results
As a SaaS startup or V2, narrowing the focus of your target audience will often yield better results and adoption rates than focusing on a large group of potential users for the following reasons:
- Limiting focus will increase early adoption of core users. These users will be the early adopters who are best suited to utilize the app within their industry. These users will act as the foundation upon which the app is built. By utilizing a small group of core users in the beginning, you’ll be able to receive valuable feedback from them which will drive feature builds. As features are added, the app can be marketed to a wider audience. Core users will also act as evangelists for your app.
- Limiting focus will allow for wiser allocation of marketing dollars. As is the case with most SaaS startups, most of the money gets utilized for development, leaving less for marketing. Limited marketing dollars often dictate a narrower focus on audience.
- Limiting focus will allow for greater ability to pivot. It’s not uncommon that an app designed for one purpose ultimately ends up serving a different purpose. Perhaps your core users are only using one of five primary features. That single feature use may open the door to pivot and either push development in a different direction or push the app to a wider audience.
Metisentry on Segmenting Your Audience
Metisentry helps you apply your value proposition to the market segments which would benefit from it. Understanding the Total Addressable Market (TAM) of your SaaS Product is the first step, but often people stop there and assume the TAM is their market space - it is not. From the TAM, we help you understand which market segments are most likely suited to benefit from your solution. This portion of the TAM is called the Service Addressable Market (SAM). This resulting market size is much smaller than the TAM, and demonstrates specific need for the solution being provided by your SaaS.
Metisentry on Targeting Your Audience
Metisentry looks at audience targeting based on revenue opportunity, time to market and risk. Rather than casting a wide net, we believe that a market focus which correlates directly to your solution offers the greatest revenue return and poses the lowest risk.
At Metisentry, we’ve helped SaaS businesses define and refine their audiences based on the work we do as part of our SaaS discovery process. This, in turn, has allowed them to better focus on the segments of their market who will be best served using their application.
Metisentry on Positioning To Your Audience
Metisentry helps you then understand the adoption rate of the SAM based upon market dynamics, fit to the market, and several other factors to predict adoption rate of your SaaS offering. This resulting market space is called the Service Obtainable Market (SOM), or the market you can expect to obtain over time, and which creates an ROI to the business model MET helps you develop.
In short, MET helps you understand and capitalize on the market segments which fit your value proposition to generate the most revenue in the shortest amount of time. Further, we use business models and product roadmaps to ensure your solution generates sustained revenue into the future.
Contact us today to learn more about defining the market and the SaaS discovery process as a whole.