Consider this: In B2B marketing, you can technically succeed without audience segmentation – true. However, settling for anything less than greatness – in this dynamic sphere dominated by personalization – seems counterintuitive.
Your business outcomes are bound to be far superior when you tap into the power of audience segmentation. Here are some numbers to corroborate our claims:
80% of consumers are likelier to purchase from a brand that provides tailored experiences.
71% of consumers expect companies to deliver personalized interactions, and 76% get upset when custom approaches are not delivered.
Therefore, let's explore audience segmentation in more depth – your professional catalyst – to set you apart in the competitive landscape.
Audience segmentation identifies and categorizes a specific group of individuals within a larger target audience – based on shared characteristics or behaviors.
Coined by Wendell R. Smith in 1956, this approach allows you to tailor your marketing efforts and messages to different segments effectively.
In the context of an ed-tech company, let's consider an example of audience segmentation. Its core demo includes both small private schools and large public universities.
It employs audience segmentation to divide its target market into segments based on relevant criteria:
The company then designs distinct segments and categorizes institutions using a matrix:
| Segment 1: Small Private Schools | Segment 2: Large Public Universities |
| Institution Size: 20-200 students | Institution Size: 2,000-20,000 students |
| Curriculum: General education with an emphasis on liberal arts | Curriculum: Diverse range of academic programs and majors |
| Technical Infrastructure: Basic computer labs and limited online resources | Technical Infrastructure: Extensive IT resources and online learning platforms |
With these segments established, the firm can develop tailored marketing messages and product offerings for each group.
For instance:
Successful audience segmentation involves five key pillars:
If you can't easily articulate the defining characteristics of a segment, then it shouldn't exist. Ensure each segment has unique attributes that can differentiate it from other groups.
An influential segment should be easily identifiable and predictable. For example, if you need help to place a prospective/existing customer into a specific segment, that segment may not be clearly defined or relevant.
A durable segment remains relevant and meaningful over time. It has a long-term effect and consistently guides you in making strategic decisions.
Ensure there are enough segments to address diverse customer needs. However, avoid creating excessive segments that give no value. Instead, they may end up draining your resources – since each group requires separate offers and strategies.
Hence, maintain a manageable number of segments for efficient resource allocation.
Your segments MUST represent viable market opportunities. Only then you can successfully target and engage with them. NOTE: In B2B markets, our experts at Revnew recommend focusing on around 3 to 6 segments.
By incorporating these five pillars into audience segmentation practices, you can ensure your segmentation efforts are:
– in driving marketing success and meeting the diverse needs of your customers.
As it's evident from the name, these audience segments comprise specific buyer personas within your B2B market. To create your personas, you can analyze factors such as:
As such, your buyer personas will represent different types of decision-makers or influencers within organizations.
It categorizes organizations based on their intentions or objectives when interacting with your business.
This segmentation considers different B2B buying process stages, such as:
You can align your marketing efforts by understanding the intent behind each stage.
Geographic segmentation divides organizations based on their geographical location. It considers factors such as:
As such, you can analyze:
– of different regions.
Hence, you can consider your customer’s specific geographic segment to customize your marketing strategies and offerings.
It groups organizations based on their:
– with your brand.
This segmentation considers factors such as:
By analyzing these behaviors, you can design targeted campaigns aligned with organizations' unique needs/preferences based on their past actions.
Technographic segmentation segregates audiences based on the technologies, software, or digital tools they use. It considers factors such as:
– utilized by organizations.
By understanding the technological landscape of different segments, you can focus on each organization's specific:
– in each technographic segment.
It involves categorizing organizations based on firmographic attributes such as:
Therefore, you can develop targeted marketing strategies that address the:
– of different types of B2B businesses.
Needs-driven segmentation focuses on identifying and categorizing organizations based on their specific requirements that your product/service can address.
For example, you may segment organizations based on their:
It divides organizations based on their stage in the buyer's journey. The buyer's journey typically involves stages such as:
Once you know where customers are in their buying process, you can deliver targeted, stage-based content and experiences:
For example:
Tier-based segmentation segregates organizations based on their importance or value to your business.
It considers factors such as:
By assigning different tiers to organizations, you can allocate resources and prioritize your efforts accordingly.
For instance:
It classifies organizations based on their:
– within your industry.
This segmentation considers factors such as your customers’:
When you segment organizations per their sophistication levels, you can avoid either oversimplifying or overwhelming them with information.
For example:
Mailchimp's research shows segmented campaigns perform significantly better than their non-segmented counterparts. The average performance of these campaigns is highlighted across various metrics, such as:
| Campaign Metric | Average Performance |
| Opens | 14.31% higher than non-segmented campaigns |
| Unique Opens | 10.64% higher than non-segmented campaigns |
| Clicks | 100.95% higher than non-segmented campaigns |
| Bounces | 4.65% lower than non-segmented campaigns |
| Abuse Reports | 3.90% lower than non-segmented campaigns |
| Unsubs | 9.37% lower than non-segmented campaigns |
Now that the numbers have spoken, let’s check out the benefits of B2B audience segmentation in detail:
When you break down your B2B audience into different segments, you really get to know their specific needs and what they're struggling with.
It enables you to create messages and solutions that speak their language. Hence, customers start to see you as a reliable partner. Therefore, this trust helps in closing your sales faster.
Segmentation helps determine which organizations are looking for what. It means you deliver precisely the correct and relevant information per your buyer's specific intentions or objectives.
Having custom messages that fit each segment makes closing deals much easier. You can adjust your approach to match precisely what they're looking for.
Your personalized approaches make customers feel that they're your center of focus. Such targeted attention increases customer retention and loyalty.
By understanding what's bothering your audience and solving those issues, you build trust and long-lasting relationships. When customers feel understood and supported, they don't leave as easily.
Breaking down your audience into segments shows you places where you can expand your market. Studying how different groups behave gives you new chances to grow.
Sorting your audience into segments helps you keep your customer info neat and tidy. This means you can easily find the right details for targeted campaigns and analyzing data.
Audience segmentation gives you insights into what different groups of customers really want. This knowledge helps you make better products that match their needs.
A user-friendly experience means giving people what they're actually interested in. When you design things this way for each segment, people engage more and enjoy it.
Focusing on specific segments lets you use your budget more wisely. You're not wasting resources on the wrong leads or messages that don't matter. This way, you run sales and marketing more efficiently and cut costs.
Clarify the specific outcomes you aim to achieve through audience segmentation.
For example, your goals may include:
Setting clear targets can align your segmentation strategy with your overall business and marketing objectives.
Next, select the specific factors or variables you will use to divide your B2B audience into distinct groups. These criteria can be:
Examples of segmentation criteria include:
Selecting the proper criteria is crucial to ensure the resulting segments are meaningful and relevant to your business.
Market research is vital in informing your segmentation strategy. It involves gathering relevant data and insights about your:
Market research methods can include:
To obtain a comprehensive view of your B2B audience, you should leverage multiple data sources – internal and external.
Internal data sources may include:
External data sources may encompass:
Qualitative data gives you insights into customer motivations, pain points, and preferences. You can gain this understanding through interviews, focus groups, and customer feedback.
Quantitative data, on the other hand, offers statistical analysis and trends through numerical data. It enables you to recognize similarities and patterns – for making wise choices.
Combining qualitative and quantitative data gives you a more robust audience understanding.
Once you have gathered data and identified your segmentation criteria, the next step is to cluster your accounts. Clustering involves grouping similar accounts or organizations based on your chosen segmentation criteria.
This process helps to identify commonalities and patterns among accounts. As such, it enables you to create distinct segments with shared characteristics.
After clustering your accounts, assign segment codes or labels to prospects and customers – based on their assigned segment.
This coding helps appropriately categorize and tag individuals within each segment. Therefore, you can track segment-specific interactions, behaviors, and responses.
Two critical theories in audience segmentation are Propensity Modeling and The Denominators Theory.
By understanding these theories, you can make informed decisions and prioritize segments based on their impact and potential.
Once you have established your audience segments, you must:
It involves monitoring key metrics and evaluating how each segment performs against your defined goals. By analyzing segment performance, you can:
Refining segment definitions may involve:
Establish Key Performance Indicators (KPIs) to monitor your segmentation approaches’ progress and success rates.
These KPIs can include:
By setting measurable metrics, you can:
With comprehensive audience segmentation, you get a deep understanding of each segment's requirements, preferences, and characteristics. Therefore, you can design custom marketing campaigns that are relevant to your targeted demographic.
It involves creating personalized messaging, content and offers that address each segment's specific pain points and interests.
Let’s finally explain B2B audience segmentation with a fictional case study. B2B software giant XYZ Inc focuses on offering productivity solutions to businesses.
| Customer Segmentation Example for A Software Firm - XYZ Inc | |
| Psychographic Segment | Usage-Based Segment |
| Innovators: Innovative companies invest in new technology | Power Users: Customers with a high level of software engagement |
| Efficiency Seekers: Prioritize their workflow | Occasional Users: Rely on essential features and may require periodic re-engagement initiatives |
| Collaboration Champions: Foster partnerships | |
As you can see, employing audience segmentation methods can create targeted strategies that enhance customer satisfaction and loyalty and drive growth.
Ready to unlock the potential of customer segmentation for your business? Connect with Revnew today and discover how our segmentation strategies and data analytics expertise can help you optimize your marketing efforts, drive customer engagement, and achieve business success. Contact us now for a personalized consultation.