As a sales consulting company selling business-to-business (B2B) solutions, we use B2B strategy for ourselves and for our clients. One problem that we see with many new clients is that they don’t have a strong segmentation strategy.
Often, this means they are getting killed by the competition, and/or they’re frustrated because they recognize market potential but don’t know how to tap into it. Today’s blog will explore segmentation and the top 3 segments we’ve identified as most important for B2B buyers.
Segmentation - a Quick Refresher
Before we dive into the rules of segmentation, let’s quickly review the term. Segmentation is the strategy of dividing a broad target market into subsets of customers (segments) who share commonalities with one another. The goal of segmentation is to identify high-yield target segments, meaning those with the most growth potential or profitability for your company, and develop approach strategies, messaging, campaigns, offers, etc. for each.
We’ve said it before and we’ll say it again: “Everyone is not your prospect”. Through a universal approach, a company is unable to prove how its product or services alleviate a prospect’s pains. The competition swoops in or the prospect decides to look elsewhere, and deals are lost. Furthermore, without segments, sales and marketing efforts aren’t targeted and internal resources are wasted. Segmentation allows you to market and sell effectively to a targeted group that will find value in what your company has to offer.
6 Advantages to Segmentation
- Set yourself apart: Find your competitive differentiators and use them to your advantage.
- Talk the talk: Better understand prospect motivations and pains, and increase credibility by speaking your prospect's language.
- Prioritize deals: Know the qualifying characteristics of a high-yield prospect, and focus resources there.
- Tell the right stories: Case studies and storytelling are shown to increase win rates, but only if they apply to the prospect. Show experience in your segments with meaningful messaging and content.
- Simplified offerings: By understanding your target buyers, you can reduce variance between customers, and save time internally by knowing what the prospect wants.
- Save money: Focus company resources on a particular group or groups more likely to buy, and steer sales and marketing activities in the right direction.
Specific to B2B Markets
There is no one way to segment customers and prospects; it depends on what you sell and who you are selling to. Segmentation is often thought of in business-to-consumer (B2C) terms such as demographics and psychographics, however this does not exactly apply in B2B segmentation. While consumers buy largely based on status, security, comfort and quality, business buyers are looking for profitability, productivity, and reduced costs for their companies.
A B2B sale is generally more complicated than B2C, with multiple people involved, a longer sales cycle and a greater emphasis on buyer/seller relationship and consultative selling.
Our Top 3 B2B Segments
We’ve identified the following 3 groups as the most important when segmenting B2B buyers:
- Customer buying process: Group prospects based on their position in the buying process and influence on a purchasing decision.
- Customer profitability: Group prospects based on their yield potential for your company, either in terms of immediate profitability or growth potential (long-term or upsell opportunities).
- Needs-based: Group prospects based on their business pains and unmet needs. This is a more complex type of segmentation that requires deeply understanding the prospect and being able to clearly communicate your differentiators and value to them.
There are many advantages to segmentation in a B2B market. If you're not getting the results you want, it may be related to lack of or poor segmentation.
Our sales consultancy can work with you on segmentation: first, by analyzing your marketplace and buyer processes, then developing target prospect personas, approach strategies, messaging, and more that will provide value to the prospect, set you apart from the competition, and provide clearer focus to your sales and marketing teams. Give us a call or schedule a 30-minute complimentary consultation to get started.