In Part One of our blog: 6 Steps to a Stellar B2B Segmentation Strategy, we took an in-depth look at three prep-steps you need to take in order to choose the right marketing segmentation strategy. In Part Two, we continue our journey with the final three steps that are essential to your B2B segmentation success.
Step Four: Consider the Many Ways to Segment Customers
There are countless ways to segment your customers, but below we will cover some of the more popular approaches. Some of the segment types, like firmographics and geographics, are quick and simple to do. However, others, such as customer needs and customer behaviors, require more time and effort, but their ability to produce meaningful results makes them worthwhile endeavors.
Firmographics – Easy and economical, grouping customers according to the characteristics that define their business is what firmographics is all about. The logic in doing so is that companies of a similar size and industry will naturally have some things in common as they consider the solutions your company is offering. In short, firmographics allows you to be both targeted in your approach and reach a broader audience.
Examples of Firmographics: Industry; Number of Employees; Annual Revenue; Non-Profits; Government Agencies
Demographics – In recent years there has been a shift in B2B marketing in recognizing that customers are people, and as such, it can be beneficial to borrow approaches from the B2C world. To use demographics to segment your customers in a B2B setting, you will want to focus on the characteristics of the decision-makers you are targeting. In addition to standard demographics like age and educational background, you will want to think about who your decision-makers are in the working world. What roles do they play at their company? What are their interests and passions? If you have developed customer personas, use them to narrow your list of demographic focal points.
Examples of B2B Demographics: Job Title; Seniority; Gender; Age; Education; Interests
Geographics – Location is one of the most popular ways to segment customers with the natural assumption being that if your customer base has a large number of people within it that come from a certain area, it is a good idea to target others in this area, too. Depending on the type of products/services you offer, geographics can be used to develop seasonally relevant campaigns and well-timed pieces that tie-in with the weather in a specific region.
Examples of Geographics: Neighborhood; Town; City; County; State and Country
Psychographics – Marketers know that the decision to purchase is driven by the emotions of the buyer. Psychographic segments make the most of this knowledge by enabling marketers to hone-in on the psychological factors impacting their buyers’ decisions, such as values, attitudes, interests and behaviors. To develop psychographic segments, you can conduct surveys and focus groups with customers and prospects that seek to answer “why” they made a particular decision. Another way to gather psychographic data is to talk to members of your sales and service teams to find out what customers are telling them. Adding a social media listening tool to your marketing stack, (i.e. Mention, Hubspot or Awario, etc.) or to your stack is also a wise way to gather valuable psychographic data.
Examples of Psychographics: Social Class; Lifestyle; Values; Generation; Preferences
Customer Needs – To segment your marketing lists according to needs you will need to spend some time researching all the ways in which your products/services benefit your customers and rank them according to their importance. Keep in mind as you prioritize needs that most B2B decision-making processes involve seven or more decision-makers, most of which will have different reasons for considering your products/services. Moreover, it is entirely possible that if you develop a campaign that focuses on individual needs, the decision-makers in one company could receive different campaign pieces based on their unique needs.
Examples of Customer Needs: Price; Quality, Features, Customer Service; Support; Brand Reputation; Reliability; Customer Experience; and Ease of Doing Business
Customer Behavior – Understanding customer behavior is critical to your ability to identify, predict and enhance customer lifetime values (CLVs). Easy to gather and track over time via your data dashboard, customer behavior data looks at the actions (or inactions) your customers are taking as they engage with your brand. A primary benefit of monitoring customer behaviors over time is the ability to become better and better at predicting future customer behaviors. A few of the common behaviors to watch that shed light on whether or not your marketing message is being heard or your customer experience (CX) is all it should be are click-throughs, time spent on various pages, purchase frequency, brand loyalty, churn rates, campaign interactions across all channels, etc.
Examples: Average Spend; Product/Service Usage; Number of Transactions Over Time; Information Requests; Time on Site; Longevity; and Referrals
Step Five: Valuate Segments and Prioritize Spending
Segmenting your customer base, and tracking those segments over time, enables you to identify and target the customers and prospects that are producing the most value for your company. From segments who do the most business with your company, and those who buy more premium offerings, to those who influence purchases, or send a greater number of referrals your way; there is much to learn and gain from putting your eggs in a variety of baskets. As you determine which segments are doing the most to grow and sustain your business, you can prioritize your marketing spend toward these individual segments and develop offers that specifically address their needs.
Step Six: Develop Distinctive Campaigns for Each Segment
The ultimate purpose of developing a segmentation strategy is to become a more effective and targeted marketer. Today’s B2B customer expects you to provide them with personalized offers that are relevant to their unique needs. In fact, current research has found that among B2B customers:
- 78% will only engage offers personalized according to their previous engagements with a company
- 87% state personally relevant branded content positively influences how they feel about a company
- 77% have chosen, recommended, or paid more for a brand that provides a personalized service or experience
- 63% are highly annoyed by companies that rely on the old-fashioned strategy of blasting generic messages
In short, every segment you create requires a message that specifically addresses what is important to them. Images, messaging and offerings for each of your segments should be recognizably different and personally relevant to the members within each segment, while remaining true to your overall brand look and voice.
To create individual campaigns with confidence, we recommend focusing on your top two segments first and then tackling the remaining segments according to how you have prioritized them. As you plan your marketing campaigns for each segment, follow these proven guidelines:
- Create an outline of the typical buyer journey within each segment
- Develop a calendar of content needed at each step of the journey
- Make ongoing personalized communications scalable by automating campaign content
- Track and monitor campaign performance and make decisions based on data
- Be sure to consider preferred communication channels of individuals within your segments