Navigating the dynamic landscape of Software as a Service (SaaS) requires more than just an innovative idea. To truly succeed, understanding your target user inside out is crucial.
That’s why many are turning to SaaS market research. It is the best resource for strategic decision-making, providing the insights needed to tailor your product, identify opportunities, and stay ahead of the competition.
But how do the experts approach this critical task? In this blog, we'll delve into the best practices for conducting SaaS market research, sharing the methods and tools that our market research company uses to help clients gain a competitive edge.
Whether you're launching a new product or looking to refine an existing one, these expert strategies will help you make informed decisions and propel your SaaS venture towards success.
What Is SaaS Market Research?
In our experience, SaaS market research can look like a few different things but what it normally comes down to is research on the end user or target audience (aka the customer) in some shape or form.
Whether it’s direct customer surveys or competitive intelligence looking at how other companies speak to customers, the end goal for SaaS is to know more about the user.
It’s all about figuring out what people want from software that lives online. New features? Errors? Problems with the software? All of these are questions that SaaS companies want answers to from their customers.
Our experience has shown that this type of research is vital for the success of any SaaS company. It points the way to where a business can go and helps avoid wasted effort. And in a field that's expected to be worth over $800 billion soon, that matters a lot.
Why SaaS Market Research is Usually Different
While not extremely different from other market research types, SaaS does focus primarily on the customer in an obsessive way. It’s because there aren’t as many working parts in SaaS besides the product and user.
When you think about it, most businesses come down to that, product and user.
Timely feedback matters
What is mostly different about SaaS market research is the speed of which the results can matter.
We mentioned before that SaaS is a fast market. Hundreds of products are created a week and hundreds also die (based on the market). That’s a pretty quick turnaround time.
From what we’ve seen in the industry, that means that with any big shift in the market, results can change even overnight. Of course, with bigger companies this is less likely to happen. Still, it’s something all SaaS companies should think about.
Therefore, our market research company often recommends conducting online surveys. Of all the methodologies they provide the quickest feedback without sacrificing quality. The quicker the feedback, the faster your team can work to make necessary changes and updates.
The need to stay ahead of market changes
One last differentiator is because of the quick response from users and companies, implementing market research data can show quick changes (as long as goals are aligned with customer desires).
Depending on the quality of data, these changes could be both good or bad but the changes are fast nonetheless.
It’s all about what the market desires from a SaaS product and staying ahead of the market changes help bulletproof SaaS companies.
Why Market Research Is So Crucial
In our work with cloud services, we've found that thorough market research in some capacity is key for business success. Here's why.
Keeping tabs on customer needs
Market research is crucial because it grounds a SaaS company's business strategy in real-world data. Being aware of customer needs and market trends helps us create solutions that people truly want.
For example, market research helps us figure out the main problems our product can solve.
You can finally ask your end customers, "What's bugging you?" and "What do you need that you’re not getting?" Answers to those questions can be invaluable for some SaaS companies that are still wondering those things.
Keeping tabs on competitors
Statistically, the SaaS industry is booming. It's predicted to hit over $800 billion in revenue by 2025. So, knowing the competition is a must.
Also, by understanding competitor strategies, pricing models, and feature offerings, SaaS companies can identify gaps in the market, innovate their products, and strategically position themselves to attract and retain customers.
Keeping tabs on new opportunities
Finding new opportunities for your SaaS is another key output of market research.
If your original intended audience seems small, market research can help you identify alternative segments or niches that also need your product. By analyzing industry trends, customer feedback, and competitor activities, you can uncover underserved markets or emerging needs that align with your offerings.
This proactive approach not only broadens your potential customer base but also enhances your product’s relevance and value proposition, paving the way for sustained growth and expansion.
How to Conduct a Market Research Project For SaaS
Now you’ve heard all the great things about what you get from market research, here’s how to actually do it.
1. Figure Out Your Goals
Whenever starting a market research project, you’ll always start by establishing clear, precise objectives.
For a SaaS company, this might mean identifying opportunities for a new feature, understanding current customer satisfaction, or identifying why you’re losing market share to a competitor.
This is the step that a lot of people miss with market research, it’s certainly easy to just start randomly asking customers questions, but identifying what you want to use your market research to find will help make the process smooth on you in the long run.
That way you can get the data you actually need and do something with it.
2. Determine Your Target Audience or Market For Your Product
Next, we determine who you want to ask questions. This can be current customers, potential customers, certain subsections of your market, or any other certain qualifiers that make sense for your market research goals.
This part involves deciding on demographics, job titles, industries, and company sizes to create a detailed profile of our ideal user.
This will be the audience your market research partner will target with a focus group, survey, or whichever methodology is chosen for your study/project (it will likely depend on your goals you set in the first step).
3. Write Questions For Your Audience
Regardless of the methodology you choose for your project (online surveys are generally the best choice). You’ll have to sit down and write some questions to your respondents.
Crafting the right questions is crucial. Drive Research focuses on questions that get you closer to your market research goals.
Some examples of good questions are ones that seek to reveal the user's daily challenges, preferences, and the value they seek from SaaS solutions. This is also a great opportunity to measure their awareness, perceptions, and usage of competitors.
4. Collect Your Data
Whether it be through online surveys, focus groups, or a hybrid market research approach, now it's time to collect feedback from your target audience. Another option we like to include in this stage is secondary research on competitors.
Especially since businesses get cloned, replicated, copied, and ripped all the time. You’ll need something to distance yourself from a cloned competitor of yourself.
We like to compile data on competitors and analyze industry reports for big in-depth insights to spot trends, assess market conditions, and benchmark offerings for the client.
5. Analyze All Your Data
Speaking of in-depth insights, this is likely going to be one of the most important parts of the process.
Analyzing the raw data you get in order to come up with real insights that can be used in business decision making is important to get right.
The better quality of insights, the better confidence you’ll have when making decisions about your SaaS and the direction it’s heading in.
That’s why it’s important to work with experts! You don’t want to guess what the data means, you’ll want to really know what it means. Always consult with a market research company or expert if possible.
6. Come Up With a Plan!
The final step is crafting a strategy based on findings. With high quality data, great insights, and good decision making - this step is easy.
What a lot of companies might not understand is whether they know their data is good or not and whether they should have confidence in their insights or not.
That’s why we at Drive Research put so much focus on data cleaning for data quality.
Also, as market research experts we provide clients with expert-level analysis of the data to improve their business decision making. We love consulting with businesses to come up with a plan for their next moves in order to improve revenue.
Secondary vs. Primary Research in SaaS
Depending on the budget and resources of your SaaS company both primary and secondary market research can be beneficial.
If you're just starting out or needing some general answers about your market, secondary is a fine choice and is almost always more affordable.
If you need more in-depth answers and unique audience insights into your specific product or service, primary and custom research is your best friend. You’ll be able to get much more out of primary that can help set you apart from competitors.
Let’s dive a little more into the differences.
Secondary Market Research
In our experience, smaller SaaS companies or start ups may not have the budget for full-scale market research. With so many moving parts and components, it can be challenging for smaller companies to really afford and get the full benefit of market research.
That’s where conducting secondary research can be a big help.
While not as impactful as primary research, secondary research involves relying on existing data gathered by others, such as industry reports, market statistics, academic studies, and online databases, to inform decision-making.
Secondary research is great for smaller companies or companies just getting started in SaaS market research. It can help answer a lot of surface-level questions about the market and audience in general.
Primary Market Research
Usually primary research is where SaaS companies go to get in-depth answers about differentiating themselves and improving their product. Primary research is usually custom market research aimed at a specific market/audience for a specific company with a certain goal in mind.
Primary research is all about fresh data, uncovering new answers, and being able to deliver unique insights. It’s our favorite but that doesn’t mean secondary research doesn’t have a place.
It’s much better for SaaS companies that have the budget and customer base since they will actually be able to benefit from it more.
Contact Our SaaS Market Research Company
Drive Research is a full-service market research company specializing in qualitative and quantitative methodologies for SaaS companies. Our team of market research experts believe in the power of extracting customer insights to drive decision-making for sales, marketing, and overall business strategy.
To learn more about our services, contact Drive Research today.
- Message us on our website
- Email us at [email protected]
- Call us at 888-725-DATA
- Text us at 315-303-2040
Austin Parker
Austin has an extensive background in SEO as he's been blogging since 16 years old back when the internet was in its infancy. As fitting, he holds a Bachelor's degree in English with a concentration in creative writing.
Learn more about Austin, here.
