How To Identify Your B2B Target Audience
September 28, 2022 Edwin Kooistra
Identifying and understanding your ideal B2B target audience is a core aspect of marketing in the SaaS sector, especially for startups. Answering how to identify and engage with your B2B target audience can streamline core strategies primarily branding, marketing, and sales efforts.
Researching all aspects of your B2B target audiences is the first step towards data-driven and informed decisions making. Knowing the target audience allows marketers to create enticing brand messaging while testing new ideas. It is also the most insightful activity when it comes to creating content and marketing it through relevant channels.
To identify their ideal target audiences, B2B businesses tend to segment the entire market analyzing different characteristics and demographics to determine ideal customer profiles. The idea here is to identify different buyer personas so that resources and efforts can be focused on these audiences.
When you’re starting a business, it’s important to identify your target audience. After all, you can’t sell to anyone if you don’t know who your ideal customer is.
In this blog post, we’ll tell you exactly how to identify B2B target audience for tech startups. Keep reading to learn more!
What is B2B Target Audience?
The B2B target audience is the specific group of potential customers defined by their unique demographics and buying behaviors, whose pain points your products can help solve. These are the most qualified audiences who will be interested in your marketing message and have the capacity to purchase your products.
By understanding important demographics including business size, number of decision-makers, annual revenue, age of business, location, etc., you can develop better content, branding, sales funnels, and customer service processes for these audiences.
Targeting personas in a B2B context can be extremely beneficial, especially when using content marketing strategies. For example, a SaaS company may create personas for each stakeholder involved in the purchasing process. A Consultant persona might be interested in blog content that addresses common pain points, whereas a CEO persona might be interested in white papers that contain a lot of data.
Why a B2B Target Audience Is Important To Grow Your Startup?
A 2014 McKinsey research of 3000 software and online service companies, concluded that to survive through failure, B2B businesses need well over 50% growth per year. The same research also identifies 5 critical enablers of SaaS growth, the target audience (market) being the most important factor for consistent growth for B2B businesses.
Two very crucial reasons startups don’t grow are:
- No market need
- User-unfriendly product
B2B target audience research remains a defining factor of sustainable growth as it primarily identifies the ideal customers who will buy your product. By understanding the values, behaviors, decision-making hierarchy, and opinions of the target audience B2B businesses can establish different buyer personas to optimize demand generation.
Another important reason to conduct target audience research is to find direction for your branding and content marketing. By identifying what motivates them and what they dislike marketing teams can develop messaging that more closely appeals to your buyer personas.
For startups, being cost-effective across their lead generation and sales processes are important to streamline operations. Consistent growth can only be achieved through highly target efforts aimed at audiences with the highest potential to purchase your products and not the entire market audience. Marketing collateral can then be created to attract, educate and convert only your ideal customer profiles.
As we read above, ‘no market need’ was the top reason that led to the failure of SaaS startups. With a defined target audience with specific needs, it becomes easier to create demand for your products, simply by associating with the pain points of the target audience. Consistent audience research also ensures that the products that you create are user-friendly, and have room for innovation.
4 Aspects of B2B Target Audiences To Analyze
1 – Understand their Needs
B2B SaaS providers must first understand the needs, pain points, and how their problems address them. Building trust by delivering value through content and solving their pain points through your product are two of the most essentials pillars of SaaS business.
It is significant for the overall success of your business to understand if the target audience has a need for your products. If there is no real need, then you are possibly analyzing the wrong audience.
Online collaboration software provider, Chanty, increased 18% sales when they engaged with their online target audience through in-person interviews. By understanding why customers switched to their products, the brand was able to create better marketing collateral, value proposition, and brand recognition.
2 – Find the Decision Makers
One of the most essential traits of your target audience is the decision-makers who authorize the purchase decision. Your marketing and sales teams must know where the decision-making power resides since these are the people your sales efforts will be focused on.
Understanding where the decision-making power lies is of great importance for sales and marketing teams as these are the primary target audience for tech startups. One of the most popular ways to connect with decision-makers is through LinkedIn. Connecting with mid or junior-level executives is the most common way sales teams build rapport with target audiences.
HubSpot mentions the same providing us with six steps to determine the decision-making target audience:
- Understand the unique value proposition of your products.
- Develop decision-maker personas for focused marketing messages.
- Research the company’s history, achievements, vision, and values.
- Engage with company representatives on LinkedIn.
- Create common connections through social networking.
- Build rapport with a senior decision maker.
- Conduct an interview with an audience qualification questionnaire.
3 – Create Urgency
The target audience can have its own urgency traits. This means they can fall in low, medium, and high urgency tiers. Audiences with lower urgency in finding solutions for their pain points are generally not the ideal customer profiles for a SaaS startup. These low urgency audiences can have slow decision-making, leading to higher customer acquisition costs (CAC).
It is therefore very important for marketing teams to analyze their target audiences to understand their stage of urgency. Content marketing can then be focused on driving urgency through value provision and product benefits.
For example, SaaS startups can use valuable content magnets like eBooks, whitepapers, newsletters, video guides, etc. to educate the audience about their problem, hence creating a need to solve this issue. Audiences in the low and medium urgency tiers will require unique customer journeys to reach the conversion stage.
MusicLawContracts.com experimented with urgency through CTAs. Using a simple CTA text that read “download this contract now” with a limited-offer sign along with a countdown timer, they were able to increase their conversion rate by 147% just by creating an extra urgency.
A great way to measure the urgency of your target audience is through simple questionnaires or interviews. Marketing teams can ask important questions including:
- So, what problem is it that you are looking to solve exactly?
- How quickly do you think you should resolve this problem?
- What is the additional cost of leaving this problem unresolved?
- Does this problem directly affect performance, productivity, and revenues?
- Has this problem affected your role within the organization?
- What is the best way to identify this problem to the senior management and present the ideal solution?
4 – The Buying Power
Budgets remain the most decisive characteristic for target audiences when making a purchase decision, especially for B2B SaaS. Expanding marketing efforts to audiences who have no buying power can be a massive waste of time, resources, and energy for a startup.
Target audience research remains critical for startups for this reason, so B2B businesses can not only find interested customers, but also those who can afford their product. It is important to distinguish affordability from the company budget. While B2B buyers will have the affordability to buy they may not have the budget to invest in your products at the time.
A great way to identify the budgets and willingness to purchase is through a series of polls, email surveys, or in-person interviews. Startups sales teams usually need a clear understanding of the budgets of B2B target audiences, important questions to ask can include:
- What is your current spend on SaaS solutions like our own?
- Have you contracted one of our competitors for similar solutions?
- Will you be reevaluating your budget or maintaining the same?
- What are your ROI expectations from this solution?
- How much would it cost for your organization to build this solution in-house?
- How important is the pricing to your purchase decision?
- Are you looking to invest beyond your budget for a better solution?
- Does our billing cycle satisfy your organization’s criteria?
5 Ways to Segment B2B Target Audiences for SaaS Startups
Before we begin to identify target audiences, it is essential to segment the market by company size, geographical location, niches, demographics, and psychographics. Once segmented, startups can better analyze every aspect of B2B target audiences, categorized by size, decision-makers, values, locations, etc.
1 – Business Size
Startups cannot possibly cater to all business sizes across all industries. Limited by their capacity, reach, and human resources, SaaS startups must focus on segmenting the market to identify the size of organizations to which they can cater.
Evaluating important factors like the number of employees and revenue can provide important insights into which size of organization best fits the criteria of qualifying as target audiences. Marketing efforts, including content, are then focused to engage ideal organization sizes that will find value in your product(s).
Also termed firmographic segmentation, since company size is a sub-set, categorizing B2B audiences based on their business age, industry, niche segment, geography, etc, are all great ways to identify dedicated audience clusters, and later engage target audiences from them through content & paid marketing campaigns.
2 – Location
While not a popular practice for startups, segmenting market audiences by geographical location identifies potential audiences in both local and distant markets. This type of segmentation identifies important opportunities, regional restrictions, and potential markets that are important for overall business strategy.
A great example of location-based segmentation comes from Spotify which hosts close to $422 million users worldwide. While not a B2B case study, Spotify uses offers a mix of techniques including behavioral, demographic, geographic, and psychographic segmentation to engage target audiences
3 – Niches
Segmenting the market into smaller niches can be extremely beneficial for SaaS audience research. This type of segmenting can both identify multiple needs for your product and identify your ideal customer profiles. With such microscopic targeting B2B startups can not only create better content & marketing pipelines but also build personalized customer journeys for different audiences.
Niche segmentation is an excellent way for B2B tech startups to engage a loyal target audience. For example, a content management system company segmenting different niches including journalists, bloggers, digital marketers, and, small & medium-sized businesses.
4 – Demographics
Creating your B2B target audience in accordance to multiple demographics including size, location, revenue, budget, no. of employees, etc. is common practice in the SaaS industry. This is also known as firmographic segmentation especially because we are evaluating organizations.
Since different buyer personas will have varying customer lifetime values and behaviors, it is essential to analyze a set of demographics to build better target audience profiles. Here are some important firmographics to better segment your B2B target audience:
- Company size
- Number of employees
- Sales and Revenue
- Growth trends
- Sales Cycles Data
When we discuss demographic segmentation we are primarily talking about the decision-makers in B2B organizations. This segmentation focuses on age, income, ethnicity, gender, family size, education level, and designation at the organization.
5 – Psychographics
A final way to segment your audiences and identify target buyer personas is by grouping them by spending patterns, brand preference, corporate values, motivations, and attitudes. This type of segmentation of market audiences is highly correlated to the needs of the organization.
Psychographic segmentation is highly beneficial for startups as it identifies the interests, values, emotional triggers, unique organizational decision-making, urgency, buying behavior, etc. This segmentation can clearly pinpoint why an audience supports their suppliers, what they value in B2B relationships, and how they operate as businesses.
Since we are looking to trigger certain psychological responses, this type of segmentation identifies audiences who have those unique behavioral traits & values.
For example, Chasm provides startup owners who are struggling with data-driven product marketing strategies. We develop content to engage B2B startups using a motivating approach while embracing their psychographic values.
Actionable Steps To Find your B2B Target Audience
The target audience research is the essence of any startup’s operations and directly affects sustainable growth. Important decisions regarding the product, brand positioning, content & social networking, SEO & SEM, customer services, etc. are all focused on delivering value to these target audiences.
Here are 4 simple steps we use at Chasm to find ideal target audiences for B2B startups:
1 – Know the Advantages of your Product
Instead of focusing on the features of your product and what it does, focus on telling stories about your product and how it helps customers. The target audience is not yet nurtured to instantly understand the complex features, but they are looking for a solution for their pain points.
When you know the pain points of your target audience, it becomes easier to identify businesses that have unique needs and how your product(s) fulfill these needs. Understanding the benefits of your products can clearly pinpoint multiple use cases, and identify different buyer personas.
One of the most prominent examples of knowing the advantages of products comes from HubSpot. The brand offers a brilliant copy on its website, identifying how its services help customers instead of what they do.
2 – Identify the Benefits Your Product Offer to a Niche
SaaS startups can easily determine their B2B target audience by focusing directly on the niche(s) that extract the most value from your products. These are generally your existing customers or those who previously used your product(s).
Your existing customers are an excellent source of insights for determining who your target audiences can be. By analyzing the benefits your product offers to a particular group, startups can easily identify buyer personas based on the use cases.
SaaS restaurant technology provider Toast is one such example, serving a niche. The renowned B2B provider offers tools to grow & manage successful restaurants, and their content marketing is similarly aimed at answering all the important questions of restaurant management.
3 – Find Their Pain Points
Primary research remains an essential step to understanding B2B target audience behaviors, what solutions they demand, and the pain points they experience. Identifying the pain points that your product solves can instantly identify the people who need solutions for them.
Startups utilize multiple techniques to research pain points and reach out to audience samples. One of the most popular is sending out a pain points survey to determine if their issues are related to productivity, finance, support, or process optimization. Other popular techniques include salesperson surveys, following customer journey maps, and monitoring user intent signals.
4 – Find Commonalities Closest To Your ICP
Another great way to identify target audiences is by matching the common traits between your ideal customer profiles and general audiences. The ideal customer profile is a hypothetical representation of the most relevant target audience who will purchase your products.
Similarities including pain points, values, buying behaviors, and motivations can identify more qualified audiences who will engage with your brand messaging. For example, a digital travel agency can find similarities between the sales representative of aeronautical and construction machinery organizations.
Examples of a Well-Defined B2B Target Audience
We found two excellent examples for startups to illustrate the B2B target audience research process, the names have been anonymized due to privacy reasons.
Fintech Product – Target Audience Profile
- Audience age range: 30-49.
- Audience gender percentage: 70% male, 30% female.
- Designation: Accountant, Senior Accountant, Chief Financial Officer.
- Conducts extensive research before making decisions.
- Consistently working to improve work-life balance.
- Not easily convinced by one-stop solution providers.
- Current financial legacy software is obsolete.
- The lack of features is affecting productivity.
- Senior management demands improved performance and efficiency.
- Prefer being approached over email.
- Popular LinkedIn users, especially for news.
- Enjoy attending educational webinars, and reading white papers, infographics, and case studies.
B2B Digital Travel Agency
- Audience age range: 30-55.
- Audience gender percentage: 45% male, 55% female.
- Designation: Office Administrator, Human Resource Manager, Procurement Officer
- Puts great work into building valuable supplier relationships.
- Difficult to build trust with, demands consistency across business relationships.
- Needs real-time data to make decisions.
- Requires information about travel concerns and restrictions.
- Researches Google for most common questions.
- Member of professional social media networks with similar job roles.
- Enjoys reading case studies and travel blogs, watching short videos, and browsing through photo albums.
B2B Target Audience FAQs
Should I Change or Update My B2B Target Audience?
Yes, it’s recommended to routinely (yearly or half yearly) update B2B target audiences to ensure your business is consistently adding new prospective customers into your sales pipeline.
Target audience research is generally a major element of a product marketing strategy. It dictates the direction of essential processes like content marketing, demand generation, social media feeds, and other brand collateral.
Still Unable to Identify the Right Target Audience for Your B2B Tech Startup?
Depending on different dynamics, even with the right tools, it may become difficult for B2B tech startups to identify the right target audiences. If you’re still unclear about how to identify a B2B target audience for tech startups, Chasm offers you data-driven product marketing solutions to engage loyal audiences to your startup.
Our professional team helps your business grow, assisting you with strategic market research insights that identify the right target audiences for your brand. Chasm consults with your team to identify strategic efficiencies within your organization while smoothing sales effectiveness for consistent revenue growth.