It seems marketing is often an ISV’s least favorite part of doing business. ISVs are often frustrated by minimal return on investment of time, resources, and money and struggle to find ways to improve marketing results. A Staples survey found that it’s a common problem across all industries: 50 percent of business owners don’t know how to reach new business prospects on their own, and more than one-third have difficulty developing marketing materials. Precisely defining your target market, however, can help overcome these challenges.
Aim for the Target
If your ISV has been taking a shotgun approach, stop. Shotgun marketing works for companies that want to reach a very wide demographic and may work if your software is suited to a horizontal market. But most B2B software is developed for specific verticals or niches, so spending time and budget to broadcast your messaging broadly will probably be less effective.
It’s also more expensive. According to Meridian Capital’s Software-as-a-Service Spring 2017 M&A Update, SaaS companies with precisely targeted markets acquire customers at a cost eight times lower than companies without a well-defined market. Furthermore, dealing with a targeted customer base can also mean less churn and relationships that lead to future sales.
Start by Understanding Who Your Best Customers Are
To define your target market, start by evaluating your current customers. Which customers are most happy with your application? Which are having the greatest success with it? Who is spending the most on your products?
When you’ve identified that group, look for commonalities, such as the industries or niches they work in, the size of their businesses, annual revenue, and geographic region. It can also be helpful to identify the decision maker at each company that chose your product. This can help you determine if there is a common title, age group, or other characteristic among typical buyers.
Also, identify your best customers’ behaviors and values. Are they tech-savvy or does your software seem to appeal to people who have never used a software application for their jobs before? Do your customers use your software only work or are they the type of people who work all the time, anywhere? What industry shows do they attend? What associations do they belong to?
Once you determine the profile of your best customers, find others like them.
Articulate (and Use) Your Value Proposition
The next step is to make sure you have clearly defined the problems your software solves and the value it can provide. After evaluating your best customers, you may find you need to revise your value prop — the benefits may differ from those you anticipated when you first launched the application.
Use this insight to list all of the types of people who could benefit from your software. Don’t look at the process of defining your target market as an exercise to narrow your reach. It may broaden. You don’t need to make your audience smaller — just more precise.
You also can’t market in a bubble. Stay aware of what your competition is doing. You need to define how your application is different from others in the market and know which people that will appeal to most.
The Dilemma of Multiple Verticals or Niches
After your analysis, you may find you’re application has value for two or more distinct niches, and sales are strong in each area. But there’s no need to choose. This just means instead of marketing to your entire list of prospects with each campaign, you need to segment your list and design campaigns relevant to each part of your database.
A good example is a solution designed for merchants. Your application may work for retail stores, restaurants, and grocery stores, but effective marketing campaigns to prospects in each of those areas will differ. Those businesses have different challenges, and they’re looking for solutions that address their operations specifically, not all merchants’ businesses in general. Targeted campaigns will produce the best results.
Determine the Size of Your Market
Now that you’re sure you know the correct market for your software, do one more thing— make sure it’s big enough to meet your business goals. There are tools available to help, such as Facebook Audience Insights. It allows you to enter demographic information that describes your target audience, give you an idea of the size of your market, and, with insights such as where the people you’ve described are located or the devices they commonly use to view ads, help you make marketing even more effective. If the market you’ve defined is too small, reconsider some of the parameters, such as geography, which you may be able to expand through reseller partners.
Now Launch Successful Marketing Campaigns
Now that you know who you are marketing to, marketing becomes easier. You know what to say because you know how to capture your audience’s attention, and you know where to engage with them. Of course, you need to monitor campaigns for effectiveness, adjusting them if necessary, and following a strategy that consistently keeps your brand in front of your audience. You may even need to adjust the market you are targeting as the industry changes or as you introduce new products. The key is knowing who you need to talk to by precisely defining your target market — and then starting the conversation.