Segmentation in B2B

I recently met a prospect who wanted to approach consumers first, SMBs second and large companies third with his product (a software). So I asked him, “What do you mean by consumers? Which ones? Could you be more specific?”

In B2B more often than in B2C, segmentation, or rather hyper-segmentation, is extremely important. I always repeat this mantra: a market is a group of buyers who consult one another when they make a buying decision. Segmenting, and hyper-segmenting, is identifying the elements that compose the characteristics, motivations and other criteria that help us identify a group of buyers, in order to facilitate the approach to one or more markets.

Let’s imagine who could be the buyers of accounting systems. We could start by saying that every companies are. But that’s too wide a scope. Let’s be more specific, or even hyper-specific. Let’s imagine that these are companies who manage the installation and maintenance of heating and cooling systems, employ 5 to 15 people, and are located in Quebec and in Eastern Canada. These have one thing in common: they are independent companies with a part-time accounting employee. This represents a market in itself. Continue the exercise and regroup is necessary.

Segmenting can be done in many ways: by geographic or environmental factors, psychographic criteria, behaviour related to a company’s criteria (company size, sales, code NAICS). Don’t forget to consider the targeted buyer and how he or she is related to the company or organisation (role, department, employee status).

Segmenting is a major element in B2B. The more defined the segment, the more marketing dollars provide ROI, that is, quality and qualified prospects.

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