Ignite cloudware customers segmentation for b2 b saas

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As SaaS is a new business model that enables business customers to benefit from the most advanced technologies at a lower-cost subscription model. Keeping the customer acquisition cost (CAC) low and …

As SaaS is a new business model that enables business customers to benefit from the most advanced technologies at a lower-cost subscription model. Keeping the customer acquisition cost (CAC) low and manageable become critical factor for the SaaS vendor success
While planning B2B SaaS sales organization and processes, realistic customer segmentation definition becomes important than ever to the sales success!

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  • 1. Revital Libfrand, Co-founder Ignite Cloudware Customer Segmentation in B2B SaaS Sales– Overview
  • 2. 2 Is customer Segmentation for SaaS different from others? Customers segmentation is a common practice that divide the company target markets and/or customers into subsets that have something in common.
  • 3. 3 Is customer Segmentation for SaaS different from others? As SaaS is a new business model that enables business customers to benefit from the most advanced technologies at a lower-cost subscription model. Keeping the customer acquisition cost (CAC) low and manageable become critical factor for the SaaS vendor success.
  • 4. 4 Is customer Segmentation for SaaS different from others? Companies use customer segmentation to: • Address relevant offering to each segment • Allocate sales resources according to the relevant segment • Communicate with each segment in the relevant channel
  • 5. 5 Is customer Segmentation for SaaS different from others? Segmentation Definition Challenges in B2B SaaS Sales: • Different sales cycles are required when approaching B2B sub- segments • Allocating the required sales resources for each sub-segment directly affect the CAC • Mismatching resource with the relevant sub-segment creates a gap. My customer pays 199 $ MRR …and thinks he owns our company…
  • 6. 6 Common Segmentation Models- Overview Geographic Segmentation Segmentation By Customer Type Demographic Segmentation Behavioral Segmentation Segmentation By Occasion Segmentation By Value Where is my customer? What is he doing? Who is my customer? How is my customer using the product? When should I propose my product? How much the revenue I get?
  • 7. 7 Common Segmentation Models - Overview Geographic Segmentation Divide your target market By country, region, zip code etc Segmentation By Customer Type Divide your target market by their business, consumer vs companies Behavioral Segmentation Divide your target market according to their usage of your product Demographic Segmentation Divide your target market by age, gender, education etc Segmentation By Occasion Approach your customers is based on special products you sell specifically for special occasions Segmentation By Value Divide your customer according to potential revenue they would bring to your company
  • 8. 8 Common customer segmentation in B2B SaaS Companies Customers Funnel Small Business Geography Mid-size Business Geography Enterprises Geography Most of the B2B SaaS Companies divide their customers funnel to small, medium and enterprises companies; in accordance the company allocate sales REPs, usually geography based, to handle the sales processes.
  • 9. 9 Next Challenge: define each segment…. SaaS companies are struggling with providing an accurate definition to each segment… Characteristics for segment definition: • Small, medium and enterprise segmentation is defined according to customer’s yearly revenues; i.e. small business- companies with annual revenues of 1M$ • Small, medium and enterprise segmentation is defined according to customer’s number of employees; i.e small business with 100 or fewer employees Customer perspective • Small, medium and enterprise segmentation is defined according to the product package the customer bought. • Small, medium and enterprise segmentation is defined according to the annual/monthly revenues the customer contributes to the vendor Saas Vendor perspective
  • 10. Let’s take a look at the sales cycle process…. 10
  • 11. 11 Sales process characteristics EnterpriseMedium CompanySmall Business Each potential buyer within the organization has other interest/needs Intermediate difficulty Need is usually clear and easy to identify Identify need Involves several people from business side as well as IT side Involve few peopleUsually done by the business owner Decision making Complex alternatives process evaluation Intermediate alternatives process evaluation Not always done, might check other alternative pricing Solution Alternatives evaluation Usually complex and long process (few month to years) Intermediate sale cycle (few weeks to few months) Usually very short (days-to few weeks) Overall sale cycle
  • 12. 12 Sales process characteristics EnterpriseMedium CompanySmall Business Must have legal department to approve the contract…and they always have something to change Intermediate process, legal counsel will shortly approve the generic contract if no critical issues are present Short process, buyer will not involve a legal counsel if generic contract is proposed Contract Issues Many interactions to complete the sale process Intermediate number of interaction Few interaction# of interactions with customer Seriously evaluated prior purchasing The issue is evaluated slightly prior purchasing Standard support is usually accepted Maintenance & Support Willing and use to pay premium fees as long as ROI is demonstrated Price is one of the parameters been considered Price sensitivePrice
  • 13. 13 Sales process characteristics - summary Small business - short & simple sales process Medium company - Intermediate sales process Enterprise – long & complex sales process
  • 14. 14 How is the GAP created?
  • 15. 15 Suggested Segmentation for B2B SaaS Customers Funnel Geography Small Business Package Mid-size Business Package Enterprises Package • Adjust segmentation characteristics for each market - You can’t define a global homogenous characteristics for small, medium & enterprises without localizing the levels per geography. A medium size company in the USA with 1000 employees might considered an enterprise in a different country. • Evaluate the sector your company is targeting. For example: products targeting IT department; sales cycle complexity also depends on the IT department size; i.e. a huge constructions building company with thousands of employees but with medium size IT department
  • 16. 16 Suggested Segmentation for B2B SaaS Customers Funnel Geography Small Business Package Mid-size Business Package Enterprises Package • Create a package per segment The package should meet the segment needs (SLA, legal, security, availability etc) and must justify your investment in the sale process • The sale cycle must be adjusted to the customer nature way of doing businesses…sales process within an enterprise takes months even if your great product price cost only 199$/month
  • 17. 17 …and let’s ensure we make it work… Customers Funnel Geography Small Business Package Sales REP Mid-size Business Package Sales Manager Enterprises Package Sales Executives • Assign relevant sales professionals that would be knowledgeable with sales process and the customer nature
  • 18. Are you struggling with clearly define sales processes within your inside sales organization? 18
  • 19. 19 Inside Sales Organization Service HR Recruitment Selective hiring and rigorous screening ensures a top-rated, highly skilled, multi- lingual bench of candidates Cloudware School Ongoing education and training on leading edge SaaS developments, market trends and industry best practices Sales Assignment Dedicated focus on identifying the right fit between each customer’s needs and Ignite’s sales force Sales kit preparation Detailed, comprehensive, and template-free scripts tailored to each and every project Logistic & Support systems Full end-to-end provisioning and maintenance of required hardware and software Ignite Cloudware Provides wide Sales & Marketing services to SaaS vendors. Our inside sales team setup & ongoing management in a nutshell :
  • 20. 20 Ask me how to build an optimized inside sales team for your SaaS business www.ignitecloudware.com +972-72-2116601 revital@ignitecloudware.com