The marketing and sales goal is to satisfy customers’ demands while still earning a profit. However, people’s demands differ, so addressing them may necessitate various ways. Marketing is all about identifying client demands and detecting variances between groups of consumers.
Why are your companies’ marketing tactics the same if your customers aren’t?
B2B marketers have always struggled with personalization, especially when customers increasingly choose a B2C experience. Indeed, B2B sales used to depend on strong customer connections and face-to-face meetings, but that is changing with the rise of the internet and B2B market segmentation strategies.
Before contacting a sales professional, today’s B2B buyers advance 70% of their way through the buyer’s journey. Simply speaking, reaching customers with effective marketing messaging is more crucial than before. This is when market segmentation comes in handy.
What is Market segmentation?
“Market segmentation is a natural result of the vast differences among people”
— Donald A. Norman
Market segmentation is a way of dividing a target market into subsets with comparable characteristics. This consists of gender, wealth, age, personality traits, behavior, preferences, demands, or region.
These categories can improve product development, advertising, marketing, and sales activities.
Segmentation enables companies to develop strategies for various categories of consumers based on how they view the total value of certain services and products. They can confidently send a more tailored message, knowing it will be received satisfactorily.
For example, a SaaS firm with 100 people will utilize a work management system substantially different from a SaaS company with over 1,000 employees. A company can develop a targeted message for both types of businesses by using market segmentation.
The Advantages of B2B Market Segmentation
Market segmentation is critical since it leads to personalization, which is becoming highly valued by modern purchasers. 73% of B2B sales invoices now include millennial decision-makers, who are among the most personalized populations.
It’s expected that organizations with the most personalized approach are approximately 1.7 times more likely to win market share than those who merely use customization moderately. B2B segmentation offers several advantages, and customization is just the beginning.
Let’s look into some benefits of B2B market segmentation:
It Increases Revenue
Personalization can help increase sales by 10%, and market segmentation seems to be the most straightforward approach to building a customized campaign.
It Fosters Business Development
Market segmentation enables you to comprehend your key clients better. The more you understand your target audience, the better you can meet their demands. Use that information to develop new products suited to specific market segments.
It Helps Discover New Markets
Assessing market segmentation information can help you recognize prospective prospective B2B segments in previously unknown areas.
Help You Save Money On Marketing
You do not intend to squander your funds by tossing several marketing methods against a wall and waiting for what holds. A robust segmentation approach allows you to build targeted, individualized marketing that maximizes your budget.
Popular B2B Market Segmentation Methods
Following is a selection of the most popular B2B segmentation strategies to assist you in making a sound decision on the ideal segmentation method (or ways) for your company:
Segmentation Based On Firmographics
B2B marketers use firmographics in the same manner that B2C marketers utilize demographic data. This is a way of segmenting clients based on shared characteristics.
Customers are divided into firmographic segments depending on characteristics such as the size of the Business (number of staff or yearly revenue), location, sector, and other technologies employed by the targeted organizations.
Segmentation Based On Needs
Is a specific consumer group necessary to invest the lowest amount of money? Perhaps the most robust features or a product that surpasses the competition are required for this area. Customer segmentation based on needs classifies your consumers depending on what they’re searching for in a product.
This strategy divides customers into groups depending on their needs. Of all segmentation techniques, this one provides the marketer with the most precise way to target client categories. So because marketers can define as many needs-based categories as necessary, it is very scalable.
Segmentation Based On Tiering
Client tiering is a way of segmentation depending on how well a customer meets your company goals. It is an innovative way of segmentation. The method evaluates the significance of a client or leads depending on how much revenue that customer might deliver.
Segmentation Based On Behavior
Behavioral segmentation is a powerful addition to tier segmentation for need-generation marketers looking to maximize the value of their existing client base.
It examines how current consumers engage with the solution or product to discover two essential factors:
- Is it possible that this customer can benefit from extending their present solution?
- Is this customer on the verge of dismissing our solution?
Making the Most of B2B Market Segmentation
Want to know in-depth about segmenting the market? These tips can help you get started.
Organize Your Database
Clean up the database before trying to categorize your audience. Consider building a consolidated customer-data platform that collects external and internal information to keep it organized and easy to access.
Require Data? Buy It
You can acquire data if you do not have an extensive client information database. Same if you intend to build B2B market segments beyond your present base.
Several data companies can assist you in optimizing your B2B marketing strategy. They do so by supplying firmographic data about companies in your sector.
Recognize Your Client
You could best serve your consumers if you understand what they want. You must first identify your potential consumers before building B2B market categories. Who is purchasing your goods and why?
Determine The Segmentation Criteria
Build your B2B segments according to your results. Begin with firmographics and determine which criteria will yield the best-qualified lead.
Segmentation is the initial critical stage in marketing and the foundation for economically addressing demands. The segmentation is frequently driven by a combination of who-what-where and why.
The categorization of consumers with similar demands enables the selection of relevant target consumers and the establishment of marketing goals for all segments.
One can devise the plan after establishing the goals to achieve them with the help of strategic weapons such as product, pricing, marketing, and location.