Why audience segmentation is imperative

Slicing and dicing your prospect and customer lists using key characteristics means you can hone your message to deliver the personalized content that engages that particular group of people. In an age where hyper-personalization is required in the buyer experience, they expect a very tailored message. This tactic helps increase engagement and can move your prospects to the next step in their journey.

A segmented list also informs your future marketing, supplying data to refine your personas and fine-tune your content for those audiences. Also, segmented campaigns get proven results: They have a 14.31% higher open rate, an unsubscribe rate that is 9.37% lower, and 2X the clicks.

You may be thinking, “Segmentation sounds great, but how do I do it?” Read on.

How to segment your B2B audience

Audience segmentation in manufacturing and distribution isn’t like B2C. There’s additional complexity, multiple decision-makers, and formal processes in your target customer organizations. Also, the buying cycle is generally longer and there’s a larger emphasis on personal relationships. All of these factors can lead to more nuanced segmentation possibilities – and make it even more daunting to tackle!

There are different methods to do a target market segmentation, but all of them require quantitative and qualitative data. It is the qualitative data that will determine your segments and refine your buyer personas. You likely have your list divided by characteristics like location, function, role, industry, and the size of the company. These, in data analysis lingo, are called firmographics. While they are important, they are broad, not likely to change, and don’t really give you what you need for further segmentation.

Messaging and engagement can be further segmented by purchase history, channel timing and frequency preferences, whether interactions have been passive or active, and which channel was used. The stage in the journey is important as well –  engaging with someone new to your site or one who has just started the sales cycle will need different information than someone further along.

Four B2B audience segmentation models

Which method you use to segment is going to depend on your unique goals, and there’s no one right way to do it. Here are four different models that work well for B2B to get your wheels turning.

1. Need-based segmentation
   
   Remember customer A and customer B? Need-based segmentation means that customer A never would have gotten that email highlighting the widget product category. Instead, they would receive an email about the electrical components they really need.
   
   This method is superior to firmographics because it is based on needs and attitudes, which means you can focus on their motivation for purchasing and their common pain points. Customer industry and size of target account can be good indicators of the need – if you have industry familiarity and a strong product/market fit, you should easily see the ways you can solve the unmet needs in this segment. And if you don’t, interviewing customers firsthand informs your understanding of prospects’ needs, too. So does observing how they interact with your content: Which blog posts are they reading?
   
   
2. Segmentation based on behavior
   
   This approach gives you clearer insights into what your buyers want. Look at which channels prospects use, what content they interact with, and how they interact with your products. By adding firmographic data as well as that from your CRM, you can craft a marketing strategy that’s based on who the prospect is, what they specifically want, and their behavior.
   
   
3. Customer tier-based segmentation
   
   This method looks at the annual revenue from customers in a recent time period and applies tiers that determine the appropriate amount of high-touch account management required. In many manufacturers that operate in a fairly closed market, it’s common for 80% of their revenue to come from 20% of their customers. Marketing to the “long-tail” segment can be a significant growth lever, driving greater share of wallet through digital touchpoints and self-service, while a more 1:1 account-based marketing (ABM) approach could be appropriate for larger customers, designed in lockstep with sales.
   To learn more about account-based strategies, check out our infographic.
   
   
4. Segmentation by customer sophistication
   
   This approach means you can tailor campaigns based on need, but with some important nuances. You’ll be dividing your audience based on product or industry savvy, looking only at their awareness of the problem solved by your product.
   
   An unsophisticated lead may be a company that hasn’t embraced the latest industry trends or a new company that doesn’t yet know its needs. A sophisticated target may be purchasing from a competitor, which makes it your goal to explain how your products are superior.

How do you put all of this into place? The first step is to create a segment of key accounts and then decide on your segment type. Gather both your quantitative and qualitative data as well as your market research, and then code and segment your customers and prospects.

The results of B2B segmentation

The right segmentation can make all the difference. Take a look at Fleetpride – their segmented campaign strategy is resulting in significant business impact, doubling average order value and driving incremental revenue.

Audience segmentation is the core of good marketing. It provides the detail needed to match your messaging to the specific preferences and needs of both your current customers and prospects to build relationships, earn loyalty, bring in leads, accelerate your sales cycle, and increase revenue. 

TL;DR - Key Takeaways: 

• Effective marketing means personalized messaging.

• Audience segmentation supercharges your marketing efforts by tailoring messages that address the wants and needs of specific targets.

• Segmented campaigns do the job of increasing engagement with more clicks, a higher email open rate, and fewer unsubscribed.

• There are different ways to perform market segmentation, but all of them have one thing in common: Qualitative and quantitative data.