Taxonomy in SaaS is how you classify and name your software’s capabilities.

Let’s break down this definition.

Each software contains modules, features, and actions that help users achieve specific goals. These make up the software’s capabilities.

• Modules are self-contained platform segments, focused on a specific use case or functionality. For example, Contact Management and Sales Pipeline Management are CRM modules.
• Features are specific functions that software performs within a module. For example, the Contact Management module may include lead segmentation, scoring, and enrichment.
• Actions are tasks or operations users can perform within those features. For example, lead segmentation may include creating, organizing, and filtering contacts by segments.

So, taxonomy in SaaS refers to classifying and naming modules, features, and actions.

But what exactly do ‘classifying’ and ‘naming’ mean? Let’s take them one by one.

Classifying

This term involves grouping software’s capabilities based on specific criteria or characteristics.

You can classify:

• Modules by use cases, goals, user types, and more
• Features by modules
• Actions by features

By properly classifying your software’s capabilities, you:

• Make your platform easier to navigate, as users intuitively know where to find what they’re searching for.
• Allow people to quickly understand how the platform works, as everything is logically organized. Users can see the purposes of each item within the right context.
• Help users achieve their goals faster, as they don’t have to waste time on making sense of the platform.
• Encourage users to make better use of the platform. Clear categorization allows users to explore what’s available in specific modules.
• Improve user satisfaction, as a well-organized platform feels intuitive.
• Reduce errors, as logical grouping minimizes missteps when handling complex platforms.
• Eliminate confusion and overwhelm.

Common classification errors

• Misclassify items. For example, 0% fee or 24/7 customer support aren’t features.
• Create the wrong modules. For example, define software modules that don’t align with the platform’s core functionality or user needs.
• Group items the wrong way. For example, adding unrelated features to a specific module.
• Overcomplicate. Some companies create unnecessary modules for small or overlapping functions.
• Forget to update the classification. For example, when a new feature is added, the team may fail to identify the module it belongs to and keep it unclassified.
• Overload modules with many features. For example, some teams pack many unrelated or loosely connected features into a single module. This leads to confusion.
• Fail to prioritize user workflows. Some companies may classify items without considering how users navigate or use the platform. This may result in a disjointed experience.
• Duplicate feature classifications. Some teams include ****the same feature in multiple modules. This leads to redundancy and confusion.
• The list goes on. I continue to find classification errors as I work with SaaS companies.

Naming

This term refers to giving clear, concise, and meaningful labels to your software’s capabilities.

You can use conventional names when classifying modules, features, and actions. However, you must define and agree on specific, easy-to-understand labels for all your capabilities once you’re ready to go live.

You can name:

• Modules, using primary function or purpose
• Features, using descriptive terms that highlight their specific roles
• Actions, using verbs that indicate what users can do

By properly naming your software’s capabilities, you:

• Improve feature discoverability as clear names make it easier to find specific items.
• Allow users to easily understand the purposes and functions within your platform.
• Eliminate confusion, letting users know exactly what each part of the platform does.
• Avoid user frustration caused by ambiguous or unclear terminology.
• Communicate more easily by using consistent naming conventions for new features.
• Maintain consistency. For example, support documentation efforts by aligning platform names with user guides.
• Differentiate your product from competitors with unique, yet easy-to-understand labels.

Common naming errors

• Failing to reflect hierarchy. There should be a syntax difference between the module, feature, and action names. For example, modules could use broader terms, like Sales Management. Features could be named using specific functionalities, like Lead Qualification. Actions could use verb phrases, like Add Contact.
• Use technical jargon. Users won’t understand complex labels like Sequential Input Engine or Dynamic Data Aggregator.
• Use vague or ambiguous labels. A module named Management lacks context because it does not specify what it manages. The same applies to a feature named Connections. What does it connect?
• Use inconsistent naming conventions. Teams may name the same modules, features, and actions in different ways across the platform. This creates a lot of confusion.
• Use overly long names. These are hard to digest and remember. Users may feel reluctant to access a module called Automated Lead Generation and Nurturing System.
• Use abbreviations or acronyms. Don’t leave users guessing. Not all users may know that POC stands for Point of Contact.
• Use similar names for different items. For example, Lead Insights and Sales Insights may confuse users.
• Use generic labels. Feature names like Tool or Widget are too superficial. Don’t make users guess what purpose they serve.
• Failing to align with the terms people use. Some teams name modules, features, or actions using internal or developer terminology. These terms often don’t match the language users typically employ. For example, naming a feature Entity Management when users would expect Contact Management.
• Use trendy buzzwords. They may lose relevance over time.
• Use ‘clever’ or abstract names. Some teams try to be overly creative with their naming. This makes it hard for users to understand their meaning. For example, naming a feature The Brain to represent analytics when users would expect Analytics Dashboard.
• Use misleading names. Some companies use labels that don’t accurately represent what the module or feature does.
• The list goes on. I continue to find naming errors as I work with SaaS companies.

To conclude, SaaS taxonomy—classifying and naming—is far more complex than it seems.

You must consider multiple details to achieve clarity, consistency, and meaningfulness. And the first step is to avoid making these common mistakes in naming and classifying your software’s modules, features, and actions.