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B2B Market Segmentation: All You Need to Know

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B2B Market Segmentation: Unlocking Your Sales Potential

By segmenting your market, you can improve conversion rates, optimize ad spend, and deliver a more personalized user experience.

In this post, we’ll take a look at the different types of B2B market segmentation, how to use them to maximize your sales potential, and why it’s important to stay ahead of the curve.

What’s B2B Market Segmentation?

At a basic level, market segmentation is the process of grouping or dividing prospects and customers into buckets or cohorts. Segmentation typically improves conversion rates, optimizes ad spends, and delivers a more personalized user experience.

In the context of B2B sales, even though the decision makers are individuals, key variables such as where they work, how much authority they have to make a purchase, or what technologies they currently use all factor into the segmentation process.

Types of B2B Market Segmentation

There’s no one-size-fits-all approach to segmentation. You can segment your audience based on several factors. The best segments are built using multiple variables. Here’s a look at some of the different variables that you can use to segment your target market:

Firmographics

Firmographic data is any data about an organization that indicates its willingness to buy. The following are a few firmographic factors to base your market segmentation off:

  • Number of Employees: The number of employees in an organization can determine their affordability and willingness to invest in your product.

    For example, consider a product/service that enables businesses to cut down on the time, effort, and resources spent by their employees. The price of your product is similar to the annual salary of an employee. A business with a lot of employees wouldn’t mind the price point as it’ll help employees be more productive at a fraction of the cost.
  • Revenue: The more well-to-do a business is, the more likely it is to have funds available to invest in efficiency. 
  • Funding, Mergers, and Acquisitions: Recently funded/acquired/merged businesses are an indicator that they have the budget and are looking to expand, meaning a higher propensity to buy your product.

    Segmenting your market based on the funding or acquisition recency can be a great and easy way to go about segmenting your prospects because such prospects are eager to invest their newly acquired capital into growth avenues.

Depending on your product/service specifications, other firmographic factors such as geographic location and company structure can also be extremely relevant when segmenting your prospects. 

Using firmographic data to segment your market can help you target prospects a lot more easily and efficiently.

Technographics

Technographic data is an extremely precise indicator of buying intent. Technographics, or the interactions between a user and technology, can give away a ton of information regarding a prospect’s propensity to buy your product or service.

For instance, by analyzing tech stacks, you can find businesses that are already using products like yours. If a business ‌already uses a product supplemented by your own product, then that business is more likely to become your customer. 

You can further use technographics to find your competitors’ customers. Targeting your competitors’ customers is a sure-fire way of targeting prospects with a need for your product because they already have a use for a product like yours.

Thematic Intent

Thematic intent data refers to topics, keywords, and interests a business or individual is interested in. By analyzing thematic intent data, you can tailor your message to a specific target market.

For instance, if you’re selling a customer relationship management (CRM) tool, you can segment your target market based on their interest in CRM tools. This way, you can target businesses that are already interested in the product, and have a higher propensity to buy.

Conclusion

Market segmentation is a key part of any successful sales strategy. By segmenting your target market into smaller cohorts, you’ll be able to create more personalized campaigns tailored to the specific needs of each group.

Remember to consider all the key variables when segmenting your market, such as firmographics, technographics, and thematic intent. Doing so will help you create a more effective campaign and increase your conversion rates.

The 6sense Team

6sense helps B2B organizations achieve predictable revenue growth by putting the power of AI, big data, and machine learning behind every member of the revenue team.

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