If you're selling or marketing a SaaS product, you’ve probably heard “market penetration” thrown around a lot. But what does it actually mean, and how do you measure it with something concrete—like data from Hginsights? This guide is for people who want a nuts-and-bolts way to figure out where their solution stands, spot gaps, and focus their efforts. No fluff, no hand-waving—just practical steps you can use, even if you’re not a full-time analyst.
What is Market Penetration, Really?
Before you go data-hunting, get clear on what “market penetration” means in the SaaS world. In simple terms, it’s the percentage of your target market that’s already using your product (or a competitor’s). It’s not just about vanity numbers; it tells you how much room you have to grow, and where.
Most teams get tripped up by vague definitions. Are you counting all companies out there, or just those that actually need your kind of software? Are you measuring seats, revenue, or just customer logos? Decide this up front—it’ll save you a lot of headaches.
What You Need from Hginsights
If you’re not familiar, Hginsights is basically a big database that tells you who’s using what tech, and where. For SaaS market penetration, you’re mostly looking for:
- Tech install data: Which companies use your SaaS, your competitors, or related tools?
- Firmographic data: Company size, industry, location, revenue, etc.
- Market sizing: How many “possible” customers are out there for your type of software?
- Signals and intent: Sometimes, you can spot companies considering switching.
You don’t need every data point Hginsights offers. Focus on the tech install and firmographic basics first. The rest is nice to have, not essential for most market penetration work.
Step 1: Define Your Target Market—Don’t Get Cute
Resist the urge to say “everyone with a computer.” Get specific. If your SaaS is project management software for mid-sized law firms in the US, that’s your market—not “all businesses.”
- List your key firmographic filters: size, industry, country, maybe tech stack.
- Write it down and share with your team. The point is to avoid hand-wavy arguments later.
Pro tip: If sales and marketing are arguing about your “ideal customer,” pause here and get agreement. Otherwise, your analysis will be a mess.
Step 2: Pull the Right Data from Hginsights
Here’s where a lot of people get overwhelmed. Keep it simple:
- Build your total addressable market (TAM):
- Use Hginsights to filter companies that fit your target profile.
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Save this as your “universe.”
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Identify current users:
- Pull a list of companies in your universe with your SaaS installed.
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Do the same for key competitors.
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Export the data:
- Download to Excel or Google Sheets. Don’t overcomplicate with fancy BI tools unless you really need them.
What to ignore: Don’t get distracted by intent data, lead scores, or web traffic at this stage. That’s “nice to know” stuff for demand gen, not market penetration.
Step 3: Do the Math—Calculate Penetration
Now, you’ve got two numbers: - Total number of target companies (your TAM) - Number of those companies using your SaaS (or a competitor)
Calculate your market penetration as:
(# of customers using your SaaS ÷ total target companies) × 100
Do the same for competitors to see where you stand.
Example: - You target 5,000 mid-sized law firms. - 400 use your SaaS. - Your market penetration = (400/5,000) × 100 = 8%
This is the number to track over time.
Step 4: Slice and Dice—Find the Real Gaps
Don’t just look at the big, ugly number. Break it down by:
- Geography: Are you strong in some regions but invisible in others?
- Industry sub-vertical: Maybe you’re huge with patent law, but nowhere in family law.
- Company size: Is your adoption only among the smallest firms?
Use simple filters in your spreadsheet. You’ll spot patterns fast—maybe there’s low-hanging fruit, or maybe you’re banging your head against a wall in certain segments.
What to ignore: Don’t start running fancy regression analyses unless you have a clear hypothesis. For most SaaS teams, basic pivots will show what matters.
Step 5: Compare Against Competitors (Honest Edition)
It’s tempting to focus only on your own numbers, but the real story is in the comparison.
- What % of the market does your biggest competitor have?
- Where are they dominant—and where are they weak?
- Are there segments where nobody has real traction?
With Hginsights, you can pull install data for multiple products. Just remember: install data isn’t perfect. Some companies might be missed, or counted twice if they use multiple tools. Don’t obsess over tiny gaps—look for big trends.
Pro tip: If you see a segment where everyone is under-penetrated, ask why. Maybe it’s a bad fit for SaaS, or there’s an entrenched manual process. Don’t force it.
Step 6: Sanity Check Your Data
Market data is messy—Hginsights is better than most, but it’s not magic.
- Spot-check a few companies manually. Are the installs accurate? Sometimes, products are misidentified.
- Compare with other sources: If you have CRM data or public customer lists, see if the numbers make sense.
- Update regularly: Companies switch tools all the time. Don’t treat this as a “set and forget” project.
If things look wildly off, double-check your filters and definitions. Nine times out of ten, the problem is one of those.
Step 7: Turn Insights into Action
Now for the whole point: what do you do with the numbers?
- Prioritize by opportunity: Go after segments where you have low penetration but competitors don’t dominate.
- Double down where you win: If you’re already strong in one slice, focus on upsell, references, or case studies.
- Ignore dead ends: Segments where nobody’s winning might be more hassle than they’re worth.
Don’t overpromise. Market penetration is a guide, not a crystal ball. It helps you focus, but you still need to test and adjust as you go.
What Works, What Doesn’t, and What to Skip
- Works: Clear definitions, focused filters, and regular updates. Simple math goes a long way.
- Doesn’t work: Getting lost in the weeds with too many variables, or trusting any data source blindly.
- Skip: Overly complicated dashboards, or “intent” signals unless you have a rock-solid use case.
If you’re new to this, just getting a basic penetration number is a win. Don’t let “perfect” get in the way of “good enough to act.”
Keep It Simple—Then Iterate
Market penetration analysis with Hginsights isn’t rocket science, but it does take discipline. Start small: define your market, pull the core data, and do the math. Use what you find to make actual decisions—not just pretty slides.
You’ll get better (and faster) each time you do it. The trick is to keep things simple, question your assumptions, and focus on what you can actually use. Good luck.