When it comes to marketing, the ultimate purpose is bilateral. On one hand, there’s the purpose of satisfying your clientele’s needs and on the other, you also want to turn a profit at some point. The problem is, people have different needs, and trying to cater to everyone might not work if you only use a single approach.
As such, the heart of marketing is the talent of identifying different customer needs and recognizing the differences between target groups in general.
Let us elaborate.
The Evolution of the B2B Market
If you take a more thorough look at the B2B landscape, it’s easy to tell that the scene has managed to go through a lot just over the last decade. Today’s B2B markets look more like traditional consumer markets, with funnels, customer journeys, before a client actually manages to speak with a sales representative. In such a competitive and aggressive landscape, adopting a customer-centric digital approach is of utmost importance.
Some experts see the answer in market segmentation.
Before proper segmentation solutions, most B2B marketers struggled with identifying their target audience and creating a marketing environment where they already know who their potential customers are based on actual data.
Today’s comprehensive databases enabled B2B marketers to deliver more personalized experiences, more segmented campaigns, and more niche-focused branding tactics.
About Market Segmentation
The actual term was first used by Wendell R. Smith back in 1956. In its simplest way, market segmentation is the process of dividing your data/prospects into different subgroups based on various things like traits, facts, characteristics, or actions.
After creating these subgroups, you gain more info about them, then alter your communication strategy with which you wish to approach these groups. When the segmentation process is done right, the end result is a more optimized targeting mechanism that delivers more personalized experiences for existing customers and even potential prospects.
As a rule of thumb, there are four forms of segmentation that businesses use most. They can either be:
- Geographic
- Demographic
- Behavioral
- Psychographic
In the case of B2B marketing, things get a bit different. Instead of things like likes, dislikes, religion, location, gender, B2B markets look at companies and their traits. This is called firmographic segmentation and it makes perfect sense in the B2B landscape.
Firmographic Segmentation
Some experts claim that this segmentation type is basically the business equivalent of demographic segmentation.
More or less, there are seven prominent features most B2B marketers use as basic criteria when they forge their strategies. These are:
- Company Size
- Industry
- Location
- Status
- Performance
- Sales Cycle Stage
- Executive Title
There are earlier studies that showed that around 50% of B2B marketers used firmographic data for segmenting their email lists with the help of different platforms and firms that provide insight and reliable business information.
Why Use Segmentation to Improve B2B Processes?
Most B2B markets seem to follow the Pareto Principle, otherwise known as the 80:20 rule, which basically means that a small number of lucrative clients dominate the sales ledgers of most B2B firms in most cases.
Because of this, it’s imperative for your B2B digital agency to know which leads to focus on, and how to differentiate between prospects that will yield higher or lower returns on investment.
Market segmentation seeks to improve time management and maximize profits by eliminating mass-marketing tactics. Instead, the approach involves highly targeted segments with different methods to reach the best results.
Boosting Revenue
The approach of firmographic segmentation enables B2B marketers to gain insight into the structural makeup of any company and that gained knowledge gives tools to serve a specific segment with the content they want to engage with.
With such insight, B2B marketers can create more interactive digital marketing strategies, better SEO tactics, and overall, more targeted messages to get prospects interested.
According to a 2016 research, only 15% of B2B companies felt that they had a total view of their entire customer palette, and only 19% felt that they fully understood their segments’ customer journey, making it evident that there’s probably still work to do.
Investing in segmentation, researching those audiences enables businesses to create content that will be efficient and effective in targeting the right companies.
Nurturing Product Development
Companies are also always evolving. The scenery is constantly shifting, oftentimes driven by economic or political factors. Distribution costs and tax laws change. Expansion or downsizing may also occur.
In such a landscape, B2B companies need to be alert and flexible. They also need to be at the top of their game constantly and need to meet all changing demands.
For example, experts from Entrepreneur state that B2B companies must strive to bring value through innovation in order to achieve growth. Good marketing segmentation also means the ability to ensure that your products/services can evolve together with your clientele’s needs and are flexible enough to give you the competitive advantage to stay ahead of the curb.
Improve User Experience
To put it simply, in 2021, going digital is a must. And if you go digital there’s one thing you must be aware of: the need of offering an exceptional user experience, or UX. Creating a great website UX is a fine and intricate blend of a myriad of things. Web development, design, branding, SEO, credibility, aesthetics, overall web presence, and a lot more.
As such, poor user experience can deteriorate the relationship between you and your potential prospect even before you get an opportunity to showcase your products/services.
Also, as millennials are becoming the decision-makers in most companies, UX becomes even more important. According to Lead Forensics, this generation prefers personal research over vendor interaction and wishes to engage with sales representatives only if entirely necessary.
By understanding the preferences of these decision-makers, you can create a buyer journey that optimizes UX at every possible stage ensuring that your content will be engaging enough and served in a way that will eventually land you a contract deal.
Better Data Organization to Enter New Markets
As we said before, segmentation starts with making sense of the data you have at your fingertips. In order to make the most out of the info you have, you need to cleanse your database and organize everything to have more control over everything.
Plus, this can also give you the opportunity to discover new possibilities and business ventures you might have overlooked in the past.
Let’s say that you’ve found success as a chemical supplies vendor and worked with companies from the construction and farming industries. However, upon cleaning up your data and researching theirs, you found that for years, you’ve been neglecting the industrial cleaning industry. And now, you have a new potential segment to discover and target.
The Takeaway
In the ever-changing world of B2B markets, personal relationships have always played a pivotal role. And even though modern technology ushered in a new era, changing tactics and approaches that now seem futile, they also managed to create new opportunities and methods that enable companies to specify their messages and accommodate the communication preferences of their clients.
And as time passed, these aspects became more and more critical, serving as prerequisites to success.
B2B relationships are at a crossroads. Some might think that going entirely digital will make the scene impersonal. They are mistaken. Digitization enables customization, personalization, and precision targeting. Market segmentation in the digital era allows B2B companies to create impeccable services and products both online and offline while keeping their customers satisfied no matter how the market changes.
