Discover how to segment target accounts effectively in your SaaS business to maximize ROI. Explore key concepts like ideal customer profiles, buying intent, budget allocation, and more.
Welcome to our deep dive into account based marketing for SaaS, where we'll explore effective strategies for segmenting your target accounts to maximize your ROI. In this blog, we'll break down key concepts such as account segmentation, Ideal Customer Profile (ICP), account fit versus intent, and much more to help you create a focused and impactful ABM strategy.
Account segmentation is a critical step in developing a successful account-based marketing strategy. It involves dividing your total addressable market into distinct groups based on specific criteria, allowing for targeted marketing efforts. By understanding the unique needs and characteristics of each segment, you can tailor your messaging and outreach to resonate more effectively with potential customers.
Effective segmentation not only improves engagement but also maximizes your marketing ROI. For SaaS companies, where every customer interaction counts, knowing how to segment your accounts can mean the difference between positive or negative ROI. Let's dive deeper into the various aspects of account segmentation and how to implement it effectively.
Your total addressable market (TAM) represents the total revenue opportunity available if you capture 100% of the market share. It encompasses all potential customers who could benefit from your product or service. Understanding your TAM is essential because it sets the foundation for all your marketing strategies.
For instance, if your product is a comprehensive project management tool, your TAM could include any business, regardless of size or industry, that requires project management. This broad view allows you to see the full potential of your offering. If your TAM is too small (200 companies for example) unless every customer is worth millions of dollars per year in revenue your company will have very little room to grow.
However, it's crucial for a successful ABM strategy to narrow down from this broad TAM to a more manageable segment that aligns with your ideal customer profile (ICP). How many accounts should you target? This is not an easy question, and it changes based on deal size, vertical, growth stage, revenue goals, marketing budget, etc. Too often companies are either targeting too many accounts (TAM) or they decide to just focus on a few "whales" (like Fortune 500 companies).
Your ideal customer profile (ICP) is a detailed description of the type of company that would benefit most from your product. This profile goes beyond basic demographics and includes characteristics such as company size, industry, revenue, and specific pain points.
To create your ICP, analyze your existing closed-won deals and identify common traits among your most successful clients. Look for patterns in their engagement, the challenges they face, and how your solution addresses those challenges. The more precise your ICP, the more effectively you can target your marketing efforts.
For example, if your best customers are mid-sized food manufacturing companies located in the US that are using Salesforce, your ICP would focus on similar companies to optimize your marketing resources.
Once you have established your ICP, the next step is to identify specific characteristics and patterns among your ideal customers. This involves digging deeper into your CRM data to uncover insights that inform your marketing strategy.
Consider factors such as:
By understanding these characteristics, you can tailor your messaging and outreach efforts to align with the specific needs of each segment. This targeted approach ensures your marketing resonates with potential customers, increasing the likelihood of conversion.
Especially in large accounts there will be multiple people involved in the buying decision for your solution. It's very crucial to identify in great details who these people are, what are their titles, and what are their role in the decision. Are they the final user of your product? Are they a potential influencer or blocker? Are they the ultimate decision makers? Who is your champion in these deals?
Unless you are a very early-stage company, you have already closed several deals, so there is no need to guess at this stage. From your CRM you can pull a report with all your closed-won opportunities and the contacts associated to them. From that list you should identify the following:
Once you have identify these titles, each target account should be mapped with all the relevant contacts, so that you can engage them in a proactive way from the beginning.
When it comes to targeting accounts, it's essential to understand the difference between intent data and account fit. Intent data provides insights into the behaviors and signals that indicate a potential customer's readiness to buy. This data can include website visits, content engagement, and social media interactions.
On the other hand, account fit refers to how well a potential customer aligns with your ideal customer profile. While intent data can help identify accounts that are actively researching solutions, account fit ensures that those accounts are the right match for your product or service.
To maximize your marketing efforts, combine both intent data and account fit in your segmentation strategy. This dual approach allows you to prioritize accounts that not only show intent but also align with your ICP, increasing the chances of conversion.
One common mistake is to over-prioritize intent vs. fit. For example, many of our clients would like to target only accounts that are already in the market for a solution similar to their platform, leaving out every other company. There are 2 problems with this approach:
An account with high-intent but low fit is not very valuable. It could turn into a very small deal, or it could churn very quickly. I always rather focus on high fit accounts, and allocate my marketing budget to build relationships and engagement with those companies.
Effective segmentation is the backbone of any successful account-based marketing for SaaS. By categorizing your target accounts, you can tailor your messaging and campaigns to meet the unique needs of each group. You can segment your target accounts by:
Once you've established these primary segments, consider sub-segmenting them further. For instance, you can also create sub-segments of departments within each account (sales, HR, finance), which is particularly important when you are selling multiple products.
Sub-segmenting accounts into tiers is crucial for optimizing your marketing efforts. For example, you might categorize software accounts into tier one and tier two based on their potential value. Allocate a larger portion of your budget—say, 70%—to tier one accounts that are more likely to convert, while reserving 30% for tier two accounts.
This strategy not only maximizes your budget but also allows for flexibility. If tier two accounts show a higher conversion rate, you can shift your budget accordingly. Always keep an eye on performance metrics to make informed decisions.
Geographic segmentation is another effective strategy, particularly for companies expanding into new regions. If your sales team is just starting in Europe, for instance, you may allocate a smaller budget to European accounts compared to North American ones where you have more resources. Understanding regional dynamics can help you optimize your outreach efforts.
Another important aspect of segmentation is categorizing accounts based on their buyer stage. This could include cold accounts, warm leads, existing customers, churned customers, or lost opportunities. Tailoring your campaigns to these stages ensures that your messaging is relevant and timely.
For example, you wouldn’t approach a churned customer in the same way as a cold lead. Instead, offer them new features or services that might reignite their interest in your solution. This targeted approach can significantly improve your conversion rates and will allow you to focus more budget on the stage where leads are stuck.
Once you have clearly defined your segments, the next step is to build a comprehensive target account and contact list. This is a crucial phase in your account-based marketing strategy. Start by identifying the key attributes of your target accounts, such as industry, company size, and decision-makers within those organizations.
Utilize tools and platforms that help you compile this data, but remember that maintaining an up-to-date list is just as important. Contacts change roles, companies merge, and new businesses emerge. Regularly revising your list will save you time and money in the long run.
Below I have listed some of the platforms that we use to build account and contact lists:
Managing your list is a continuous process. Assign someone on your team to oversee this task—often a rev ops or marketing professional. A stale list can lead to wasted resources and missed opportunities, as you may end up targeting individuals who no longer work at the company or whose roles have changed.
Investing time in keeping your list current will enhance your outreach effectiveness and contribute to a higher ROI in your account-based marketing efforts.
With your segments and target accounts in place, it's time to prioritize your marketing budget. Start by identifying your low-hanging fruit—those accounts that are already engaged or have shown interest in your offering. These are typically warmer leads that are more likely to convert quickly.
Additionally, consider re-engaging lost opportunities. Often, these accounts can be reactivated at a low cost but offer high potential rewards. Targeting churned customers with updates on new features or services can also be fruitful, as they may not have left due to dissatisfaction with your product. Creating custom campaigns to retarget the bottom-of-the-funnel prospects (opportunities, engaged leads, etc) will have a high return on investment.
When deciding where to allocate your budget, always follow the revenue. Focus on accounts that are closest to making a purchase decision, such as those that have received proposals but haven’t responded. These accounts represent a quick win for your sales team and can yield significant results with minimal investment.
Revisit your budget allocation regularly to shift funds toward segments that are showing traction. This adaptive approach helps ensure that you are always investing in the most promising areas of your strategy.
In conclusion, effective segmentation, diligent list management, and strategic budget prioritization are vital components of a successful account-based marketing for SaaS. By focusing on high-value accounts and tailoring your approach to their specific needs, you can enhance engagement and drive conversions.
As you move forward, continuously analyze your results and refine your strategies and budget allocation.
Account-based marketing for SaaS is a targeted approach that focuses on creating personalized marketing campaigns for specific high-value accounts rather than casting a wide net. By aligning sales and marketing efforts, SaaS companies can significantly increase conversion rates and ROI.
To improve account segmentation, start by defining your ideal customer profile and identifying key attributes of your target accounts based on your closed-won deals. Use multiple data sources such as ZoomInfo, Apollo and Clay to build account and contact lists, and group your accounts based on multiple attributes such as industry, size, and engagement level.
An updated contact list ensures that your marketing efforts reach the right individuals within target accounts. This reduces wasted resources and increases the likelihood of successful engagement and conversion.
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