Definitive Guide
to B2B Market Segmentation

Effective B2B market segmentation can be achieved via a variety of techniques to gather and determine insightful information.

Each type of segmentation strategy focuses on different variables that can be used to define key groups within target markets and guide B2B campaigns. As such, every strategy should be tailored specifically to the project in hand to create not just detailed but accurate buyer profiles.

It can be effective to utilize a combination of market segmentation methods and a myriad of data variables to create a complete picture of prospects, their respective organizations, and how they can be organized. Here are some target market segmentation examples below:

Example of Insights From Market Segmentation For Social Media Content Creator

As demonstrated in the infographic above, each B2B segmentation method reveals different insights about prospects, their business goals, their company, and factors that may potentially influence a final purchase decision. This data can be interpreted to create specific groups and targeted strategies.

Below, we explore each form of segmenting target audiences in greater detail.

Demographic data is simple to record and due to its static nature, is generally more stable than other data types, plus the type of information it provides is often actionable.

For example, annual income data can be used to quickly segment target accounts into identifiable groups that share common characteristics, in this case purchasing power.

Marketers can use this information to avoid wasting time and resources by targeting low-income prospects that are unlikely to become buyers or prospects who are unlikely to influence a buying decision.

This approach is fundamental to ensuring that each campaign’s core messaging is personalized correctly. Demographic segmentation marketing also paves the way for further segmentation of leads into more detailed subcategories with the introduction of additional variables.

Before attempting to market and sell a product or service, companies first need to determine its characteristics and features, who they can sell it to, and how much it is worth.

This is where practical know-how meets industry application as target market segmentation strategies and knowledge of how to segment a market can be used here to inform and inspire strategies across the four main pillars of B2B marketing, incorporating product creation, pricing, placement, and promotion.

This is what a company sells, and the creation of a product or service requires a great deal of knowledge about the market in which it will be sold. Typically, a successful product will be modeled on existing and potential demand indicators or by providing an innovative solution to a commonly experienced problem.

Discover key indicators for forecasting demand.

At this stage the most important aspects to consider are how the brand is displayed, the packaging of the product or service to the right clients, and the product or service itself.

Market segmentation can provide the deeper level of data needed to create a product that is unique and offers genuine value in the marketplace, and appeals to a specific need that resonates with decision-makers within target accounts.

In the international B2B marketplace, the place or location of your product is as relevant as ever, even for online or multi-national companies that operate on a global scale.

More often than not, companies must identify where their clients are and go to them. Not the other way around. Geographic segmentation data is therefore crucial in this respect.

Place takes into account not just a physical location in the real world, but also which channels potential clients use, which local markets are ripe for growth, and which are already dominated by a competitor.

Upon learning a target market is already crowded marketers can turn their attention elsewhere, saving time and resources.

Buyer personas are semi-fictitious marketing profiles created using data on existing and potential clients to help determine their behavior, develop a better understanding of their needs and what kind of content they respond well to.

As such, buyer personas serve as another tool for segmenting target markets and are essential for any B2B company planning to or already running an ABM campaign.

Due to their artificial nature, detailed buyer personas need to be constructed from a variety of reliable, qualitative data sources, and which can then be used to inform subsequent marketing and sales strategies.

But beware, they can backfire if the requisite care is not taken. Due to their fluid nature, buyer personas require constant adaptation and perfecting to ensure they provide marketers with the right approach.

Failure to address leads in the right way will lead to wasted investment and greater churn as they reject clumsy advances and look for alternative, more attentive providers.

Buyer personas are a useful method through which to connect with prospects on a deeper, more personal level and serve as another example of how effective marketing segmentation can provide more power to campaigns.

The principle of niche marketing is to promote and sell a product or service to a specific, often smaller, and unique section of the market. This process starts by identifying and categorizing potential clients that form the consumer base and who might be unique in terms of goals, outlook, or demand.

Niche Markets

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Niche markets can typically be defined by using the following B2B segmentation methods and other data categories:

The whole point of identifying niche markets is to enable companies to micro-market and target their product or service to an often smaller, more nuanced client base which might otherwise make lead generation challenging.

Accuracy is crucial for ensuring that campaigns are personalized effectively, with language, tone and style important variables to get right.

As a result, niche marketing strategies can really benefit from the level of detail provided by market segmentation, in particular the more qualitative data afforded by psychographics and behavioral research.

For example:

• Firmographics can be used to determine which organizations within a niche market offer the most potential, as well as who best to contact within those companies by providing insights into individuals who may sit on a buyer committee.
• B2B psychographic segmentation can identify the distinguishing human characteristics of niche markets which can later be leveraged to determine the preferred channels of communication, together with the right language and style to employ to optimize personalization and outreach.
• Geographic segmentation at a granular level can be utilized to identify niche markets and guide personalization by adjusting to location-based factors influencing decision processes.

Having analyzed and defined target niche markets, companies can employ predictive analytics to forecast future trends and behaviors, opening up yet more opportunities for growth in otherwise restrictive territory.

To get the most out of any niche marketing strategy requires continuous research and testing to ensure that campaigns remain effective over time and that products are positioned correctly.

It can often be a time-sensitive operation in which companies need to respond quickly to changes to avoid missed opportunities. Or worse, to become irrelevant.

Benefits of nailing down a niche market typically include higher brand loyalty, higher prices due to specialization, higher profit margins on individual items, and less competition. Negatives include smaller, more nuanced consumer bases and lower total profits, while some niche markets may be vulnerable to external influences, like fashion, which can affect greater competition or a reduction in the consumer base based on social trends.

For modern B2B marketing and sales strategies to reach and influence decision-makers on buying committees to be successful, companies can no longer get away with being uninformed or creating campaigns which fail to communicate on the right level. Personalization is oh so important and anything less is likely to fail to influence buying decisions and be ignored.

As such, the depth of detail generated via a multitude of B2B market segmentation methods concerned with the needs, aspirations, interests, opinions, locations, buying power, and tone of content and the preferred channels of communication of target audiences is invaluable.

Realistically, companies cannot successfully plan ahead without it.