Why Behavioral Insights Are Key to Understanding Your SaaS Customers

The Software as a Service (SaaS) industry has never been more cutthroat. With the sector projected to hit a valuation of over $600 billion by 2023, more companies than ever are rushing to claim a slice of the pie. Accordingly, the saturation of the industry should be unsurprising, and thanks to this congestion, standing out has become a challenge.

This is where behavioral insights kick in. Marketers who take the time to understand their customers’ behavior tend to grow three times as fast as those who don’t and are nearly 475% more successful at attaining their goals. To aid the SaaS marketer, we’ll walk you through what exactly customer behavior is and why you should pay attention to it. 

What Is Customer Behavior?

Customer behavior (also known as consumer behavior) is all about understanding the whys behind a purchase decision, the hows that make up the way customers interact with your product, and the whats in terms of their unfulfilled needs. 

While this can seem difficult, it’s feasible if you segment behaviors into broad categories. Understanding customer behavior thus falls under the ambit of customer research and can be separated into three categories:

Demographic Attributes

A customer’s background plays a huge role in determining their purchase decisions. Their ethnicity, income, personality, culture, gender, and age all play an implicit role that influences their behavior. For instance, if you were selling construction software you’d vary the messaging based on who you’re targetting. For administrative professionals, who tend to be women, you might focus on the emotional benefits of productivity. Conversely, if you were targetting on-site workers (who tend to be blue-collar males) you could position the software as something that helps you get things done.

Even within the SaaS space, these data-segmenting attributes are crucial. SaaS marketers could leverage this to sharpen their marketing efforts to curate campaigns specifically for certain demographics by using appropriate language and suggesting products that they would be interested in based on their attributes. For example, more flamboyant language could be used when targeting younger consumers while utilizing more moderate language for older audiences may be prudent.  

External Trends

Trends are externally induced and can influence the buyer significantly. They’re influences that can emerge from every corner, from a peer’s recommendation to passing fads. Though trends aren’t always the easiest to predict and account for, ignoring their influence is asking to be left behind.

An example of a relevant SaaS trend would be the increased demand for collaborative software solutions. With remote work dominating the landscape in many industries across the globe, SaaS customers are actively on the hunt for ways to ensure everyone is kept in sync. Acknowledging a trend like this and actively stepping in to satiate the newfound demand is imperative to remain competitive. Just look at providers like Slack who’ve taken advantage of the trend and where they are now if you aren’t convinced. 

Behavioral Responses

By far the most fickle amongst the categories, behavioral responses are how buyers react to something at a given time. A customer who has a terrible day at work may not be as open to hearing out a new business proposal as opposed to a customer who’s just been given a hefty raise. 

Realistically speaking, accounting for every reaction a customer may have at every point in time is impossible as there are far too many variables. But when thought of broadly, SaaS marketers can anticipate broad trends and respond accordingly. To give an example, if there’s a severe economic downturn, you might want to temper your expectations when trying to secure leads depending on your industry. So, while it won’t tick a box in the buyer’s persona, this category is still useful for grasping a snapshot of a customer’s potential reaction.

Why Must You Understand Your SaaS Customers?

While information is the name of the game when it comes to succeeding in the SaaS industry, businesses must be careful not to conflate their understanding of their product with how their customers perceive and react to their product. 

A good understanding of customer behavior can be used to also drive sales and loyalty, and keep churn at minimal levels. 

Personalization 

In this buyer-centric era, most customers won’t be happy if they feel like another cog in the marketer’s wheel. Nowadays they’re looking for a tailored experience, so much in fact that close to 50% of consumers reported changing to other brands because they believed that content sent to them was not personalized enough.

But from marketing to onboarding, personalization is only possible if you understand the behavioral makeup of your ideal customer. Perhaps you know that a certain customer feels daunted by the prospect of dealing with major software updates, so you could directly send a handbook to them through email to guide them through the process. It’s the little things like this that add up to make customers feel like they’re valued. 

Adaptation

Knowing your customers on a deeper level and providing them with solutions and content based on their preferences is a sure way to reduce churn. This can be achieved by putting yourself in their shoes and anticipating what unfulfilled needs they may have.

Perhaps a survey may indicate that your customers find it disappointing that their loyalty to your product goes unnoticed. In response, you could implement a reward system to recognize loyal customers by providing access to exclusive events and discounts on future purchases. Likewise, you may also find a lack of engagement on your platform which could warrant further investigation to fix the issue. 

Optimization

A SaaS marketer’s coffers are always restrained by the say-so of the C-suites, which is why it’s imperative to get the most out of every cent spent as optimally as possible. To understand your customer is to gather data that can be used for this very purpose.

With behavioral data, marketers will be able to craft a list of characteristics that form the ideal customer. You could find that the customer you’re looking for is particularly aged, high-earning, agreeable, and risk-averse which will help you concentrate your marketing efforts, keeping expenditure at a minimum as opposed to opting for a more broad-stroke approach.

Sales Begin with Understanding

Gathering behavioral insights into your customer base is not just about understanding who they are and the motivations behind their purchases. It’s about you and how you can make your marketing efforts more effective, targeted, and optimized. 

Understanding customer behavior is a data-intensive task that takes specialized expertise and time – a task that not all SaaS marketers are equipped with. At Brighttail, we’ve carved a name for ourselves when it comes to analyzing customers and launching targeted campaigns, so why not find out how we can benefit your B2B SaaS company?