Get Started with B2B Market Segmentation to Boost Sales
It’s easy to be drawn in by the constant hue and cry for more leads. But what if you could simply squeeze more juice out of the ones you already have? You can.
According to a study by Jupiter Research, marketers who segment their lists boost conversions by 355% and revenues by 781%. In a complex business world, people’s requirements differ. To grab attention, our messages need to be laser targeted to individual needs. It’s essential to segment your list so you can, for example, send relevant emails, offer valuable content and tailor one-on-one phone calls.
B2B market segmentation also enables you to maximize limited business resources. You can prioritize your efforts according to which segments have the greatest potential to buy, helping you to reach your revenue goals.
Easier Said than Done
Segmentation may sound like the cure for all that ails your marketing success, but there is a catch. In B2B marketing, segmentation is challenging because:
- Complex products require highly customized approaches, requiring you to slice and dice audiences that are already relatively small compared to those in B2C, creating micro-segments.
- Achieving a sale may necessitate communication with an array of purchasing influencers.
- Many companies do not have the required resources to segment their audiences successfully.
Of course, things that are good for you are not always easy, and that’s why they can set you apart from the competition. So, how do you get started?
Consider Your Business Needs
Generally, when we talk about segmentation, it’s all about the customer. You are, however, in business to make money. That means you also have to consider the business’s needs. For example, perhaps you’re entering the fall season a tad behind your revenue goals. You need to boost sales quickly before year end. In this situation, it makes no sense to initiate a campaign with Fortune 100 companies. Their buying cycles are typically long due to bureaucracy, the fickle nature of multiple decision makers and lengthy sign off processes. You’d be better off targeting more agile smaller companies that can make decisions and approve a purchase more rapidly.
Bite Off a Small Chunk First
You don’t have to overwhelm yourself with an all-you-can-eat smorgasbord of segmentations. Simply bite off a small piece and see how it tastes. Start your initiative with a small test. Measure your success and gradually add more layers of complexity. Below are some segments that you might want to check:
If an industry has specific requirements, either self-imposed or due to regulations, you would need to target them with specific messaging that shows how you can help them to address these issues. For example, if your company offers cyber security software, you might have a particular message for the healthcare industry which is dealing with the challenges of HIPAA compliance.
Job Role or Title
We’ve talked about the multiple influencers in the B2B buying cycle. Each is looking at the buying decision through their own lens. A technical person is mostly interested in how a solution works. A project manager, on the other hand, is more concerned with whether he or she will be able to save time and make projects run more smoothly.
In addition to the nature of buying cycles varying from small to large organizations, there are other differences. For instance, because a small business does not have the internal economies of scale of an enterprise-sized organization, SaaS solutions may offer greater economic benefits to a small organization than a large one. Depending on needs, you may be able to create different product or solution packages to appeal to different sized companies.
As you become more experienced with segmentation, you will likely want to go beyond demographics to needs-based segmentation. To some degree, you can do this by observing the content your leads download, the emails they open, and the ads to which they respond. To bring it to the next level, you can fine tune your needs-based segmentation through one-on-one business telephone calls. As you begin to build a relationship, ask questions to determine the problems prospects are facing and the information that would be most relevant to them.
The rewards for segmentation initiatives are high— increased conversion rates from email opens to closed deals. The more you can provide relevant content, whether via emails, white papers or conversations, the more likely you are to capture decision-makers’ attention and to build your organization’s credibility. Finally, by targeting your campaigns at smaller segments, you will be able to reduce costs and increase your return on investment.