The Untold Story of Gender Marketing Segmentation in the Age of SaaS

The Great Divide: How SaaS Has Fallen Behind the Rat Race

The SaaS (Software-as-a-Service) industry emerged from the cable television subscription model very quickly, becoming synonymous to innovations, cutting edge technologies, and groundbreaking marketing acquisition techniques. SaaS start-ups were founded by a new generation of data-driven leaders that spoke a new language of ROI, Lifetime value, and churn rates. This new generation of leaders preferred Growth Rates, Bookings, and Revenue over Consumer Profiles and Personas. Actual people became ‘growth rates at the end of the quarter’ and market segmentation became an outdated term from the ‘retail space’. In less than 10 years, the size of the global public cloud software as a Service (SaaS) market grew 16x from $5.56 billion in 2008 to $92.75 billion in 2016 (during the same time period, according to US Commerce Department, web sales increased 2.4x, from $141 billion to $341 billion). By 2020 SaaS businesses projected to grow to a whopping $132.57 billion.

In order to support and accelerate growth rates that no other industry ever experienced in the history of the internet, a formula of success had to be created. This new formula of success multiplied “Innovations”, “Speed”, “Technology”, “Data”, “Product” and “Marketing”, however, in order to accommodate the growth rates — subtracted “Quantity over Quality”, “Personal Touch” and “Consumer Loyalty”. As result of this new fast-paced reality — “old” data collection techniques and marketing approaches became outdated. Gender marketing was one of the first metrics to disappear. The new age of post-modernistic marketing was now in charge of old fashioned realism.

Why Haven’t SaaS Companies Used Gender Marketing Segmentation?

This is the million dollar question that could yield million dollar results if answered and adhered to. Could it be that marketers in this industry are purposely ignoring this data set? Have they given it a shot, but failed? Or maybe it’s been overlooked all this time? The most plausible answer is all of the above.

Generally, SaaS businesses formulate their marketing efforts using marketing segmentation only. This includes basic segments such as Geo, acquisition channel and platform, that generated using data and meta data points gathered from customers throughout the acquisition funnel or aggregated from customer’s IP address. It’s very rare for SaaS companies to use gender marketing segmentation to improve or understand acquisition funnels, retention, churn, lifetime value, product usage and other KPIs frequently utilized by SaaS businesses.

SaaS model assumes that software is a gender neutral product/service and is used the same by both sexes, but this has yet to be proven. Also, most SaaS businesses don’t ask prospects for their gender. The fact that SaaS companies are ignoring this important data set reveals their disdain for stepping outside their comfort zone, even though this very technique has helped online retailers to excel for decades.

It’s Time for a Change in the SaaS Industry — 6 reasons why ignoring gender marketing is no longer an option:

  • SaaS businesses find the acquisition funnel to be a top priority. Their main goal is to move prospects through the funnel seamlessly, with the intention of transforming them from site visitors to subscribers. During this process, barriers are eliminated that can slow down the sign-up process, so only basic information is being collected. Consumer’s meta data such as geo-location, browser info, acquisition channel is collected by backed processes without disturbing the funnel experience. There’s no collection or back-filling post registration or purchase of demographic data, such as age, gender and personal preferences. Thus, since data is not collected and doesn’t exist in the database — there is no longer gender marketing strategy at marketers and product owners disposal
  • The online retail industry grew tremendously between the 90s and early 2000s. The internet has enabled brick-and-mortar retailers to shy away from traditional advertising methods, such as direct mailers, billboards and catalogs towards search engine ads, websites and email marketing. Old fashioned stores slowly transitioned into the online space, along with their old consumer databases, which included different types of data collected over the decades, such as age, gender, household income, etc. They managed to preserve some of the “old fashioned” marketing techniques and added new approaches. The SaaS industry didn’t exist until well into the 2000s, and had to build products, design services, collect data and build databases from scratch. SaaS had the benefit of shaping a new industry, but they also had a pitfall — much ‘old fashioned’ techniques were falling between the cracks and gender marketing segmentation was one of the first to go.
  • The SaaS companies started out online, so they quickly grew accustomed to what converted the most consumers, which was a quick and seamless acquisition funnel. This includes asking for the least amount of information as possible. Their main focus was on optimizing numbers rather than understanding who their customers are. The human aspect of acquisition funnels was ignored and replaced with numbers, conversion rates, and pseudo-analytics of data-driven decisions.
  • SaaS acquisition funnel is very fragmented, and most of the time marketers and data analysts overlook the benefits of using gender marketing analytics. On average, SaaS businesses typically convert between 1% and 2% of their total visitors. This means the profitability of SaaS companies relies heavily on bringing in the right traffic (Quantity over Quality). It also shows that at least 98 percent of traffic never submit their information before leaving the website. Unlike online retail customers that tend to return to shop for new or seasonal products or new items SaaS visitor appeared to carry one and done mentality — once they leave without subscription — they rarely return. This makes first impressions crucial and as SaaS marketers like to say “there is no second chance to make a first impression”. Thus rather than trying to personalize the experience, they are generalizing and stereotyping their audience.
  • Creating marketing campaigns that are personalized can get expensive, especially when there are multiple customer profiles to address. Generally, SaaS marketers are following the 20:80 rule, where 20% of customers are driving 80% of the revenue. With this concept, the marketer is targeting as few people as possible, using high-performing marketing segments.
  • SaaS companies are mainly founded by males. According to Techcrunch.com, women founders only made up 9.5% of the SaaS industry. It later increased to 18% in 2014. However, this is still a small number, especially as it compares to the customer, who is predominantly women (60% and growing). This is an issue because the services and products are being created in a male dominated industry. There’s an inevitable disconnect, which can be improved with improved marketing segmentation using profiles and personas rather than just conversion rates in the acquisition funnel.

How SaaS Businesses Can Become Savvier Marketers

If the SaaS industry wants to better understand their consumers and target specific marketing segments, then they should look to the retail industry. There are various marketing techniques that can be used by SaaS companies that are already being employed by retailers. Advanced marketing segmenting is a basic and simple way to optimize the conversion funnel and improve churn, engagement and lifetime value. It offers a more rewarding and cost-effective approach that will assist companies with understanding their customer’s behavior, and allow proper adjustments to be made to marketing campaigns.

SaaS businesses can seamlessly integrate gender marketing tactics into their strategies without disrupting current processes and funnels.

The first step is to download a list of first names based on gender. This can be used to match with your own list of customers to determine the gender of each individual. Doing it this way will eliminate the need to go back and survey each of the customers you’ve already acquired or adding additional fields as part of the acquisition funnel. You can simply move forward with your marketing efforts using the data collected from the gender database.

SaaS businesses can use their own database and re-run all the same reports and insights that their company normally runs, but with an additional dimension — gender. So there’s no extra cost to run these analyses, nor do you have to bother customers, since you can use the data already captured.

NameGenderPro.com offers a database that SaaS companies can utilize to create segments for their marketing. NGP has done all the heavy lifting by collecting one of the largest lists of first names sorted by gender. These names were gathered from the censuses conducted in the U.S., UK and other major countries.

At the cost of $149, you’ll have instant access to a list of over 177K first names, allowing you to quickly analyze and segment your list of names by gender. This is all possible without any additional costs or effort. After downloading the list from NGP, all you have to do is join NGP’s first names to the first names you’ve collected. It’s guaranteed that the match rate for US non-buyers will be over 85%, and a 95% match rate for consumers that have submitted credit card information.

After matching the names, you can begin running your typical reports, such as cohorts, retention, churn, lifetime value and all the others, but with one new addition — gender. This is the data discovery phase, where you can identify the difference in male and female buyers.

Once the re-running of reports is complete, you can begin implementing your findings into your marketing strategies. Now, the testing phase can begin, with a focus around your consumer profiles. You’ll be equipped to target male and female consumers with varying email content and offers and language styles.

The opportunities are increased at this point, which means you can potentially boost your conversion rates from 1–2% to something much more.

Be one of the first in the SaaS industry to start using gender marketing and sharpen your competitive edge!

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Serial Entrepreneur. Founder of datasetsDB.com, NameGenerPro.com. Scholar. Expert in Data Analytics, Marketing Segmentation, Growth Hacking and Data Science.

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Alex Zbooker — Founder of datasetsDB

Alex Zbooker — Founder of datasetsDB

Serial Entrepreneur. Founder of datasetsDB.com, NameGenerPro.com. Scholar. Expert in Data Analytics, Marketing Segmentation, Growth Hacking and Data Science.

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