Personalization in the B2C world depends heavily on demographic data i.e., data about the people. B2C companies use this data to curate content for their audience and personalize their outreach efforts when converting leads to customers.
In the B2B scenario, firmographic data does to organizations what demographic data does to people in the B2C world. Personalization is equally important here. Although using only firmographic data is not sufficient to achieve the desired levels of personalization, it is, however, a starting point for most B2B sales and marketing people.
What is Firmographic Segmentation?
Firmographic segmentation is the method of segmenting the B2B target audience and grouping them based on their organizations’ attributes such as industry, size of the company, geographical location, leadership, business model, and more.
B2B companies use firmographic segmentation to understand their target audiences so they can address their needs and pain points.
The 7 Firmographic Segmentation Variables
Predominantly, there are seven factors that are typically used by B2B companies to perform firmographic segmentation:
This refers to the type of industry a company is part of based on the type of products or services they produce or the services they provide. For example, a company that focuses on recycling waste to produce eco-friendly products may not require the same tech stack that a high-end department store like Saks Fifth Avenue would use. Hence, targeting your audiences based on the industry they belong to cannot be overlooked.
2. Geographical Location
The geographical location of a particular company or organization is another important factor. When used in the context of firmographic segmentation, some of the factors considered are city, country, continent, climate, topography, and most importantly, culture. Understanding the geography of your target markets allows organizations to determine which regions hold the most promise, what their strengths or weaknesses are, and where they should spend more time and resources.
3. Company Size
This is a factor that can be further broken down into annual revenue and number of employees. Identifying the annual recurring revenue (ARR) and budgets of your target organizations is vital to understand their purchasing potential. It is necessary to ask the question—is your product or service affordable? If not then, then will you offer custom pricing or move onto the next organization on your list? While the revenue numbers tell you all this, the number of employees will tell you if an organization is a startup, a small-medium sized business or an enterprise account. Based on this classification, you can ensure that the account is handed over to the right AE and the respective accounts get the necessary attention they require.
This factor is subjective—it depends on how you determine it. Status as a factor of firmographic segmentation focuses on the relationship one business has with another, like a parent company and its franchise or subsidiary, or the legal status of a business that determines if it’s a limited liability company, an individual company or a private corporation. Understanding the relationships between companies and their status will allow you to create actionable target market segments.
This firmographic factor can tell you a lot about how the company was established, how it made a name for itself and what its achievements are. Few criteria to help gauge the performance of a company are P&L statements, customer satisfaction scores, employee growth, increase or decrease in revenue over time, and financial ratios, to name a few. Armed with these insights, you can further classify your target audience into appropriate segments.
6. Executive Title
As the name suggests, this firmographic factor provides you insights into who the decision makers for purchase decisions pertaining to your product are for a company. Is it the Senior Business Development Manager, the CTO, or the VP of Sales? Knowing who the decision maker is will allow you to tailor your sales and marketing strategies to ensure that you convert this prospect into a customer.
7. Sales Stage Cycle
This allows you to determine which stage of the sales cycle is the prospect at. Are they at the awareness stage (getting to know your brand/company) or at the consideration stage (contemplating whether your product is a viable option or not).
By being able to identify the sales cycle stage, you can gain insights into how to nurture your leads and turn them into prospective customers.
For a deeper dive into firmographic variables check out our blog on firmographic data examples.
Now that we have identified different factors that influence firmographic segmentation, it’s time to take a look at the value that it brings.
How to Use Firmographic Segmentation to Convert Leads Into Customers?
Accurate firmographic data helps strengthen not only your sales efforts but also aids your lead generation strategy.
Here’s a step-by-step breakdown of how to leverage your firmographic data and segmentation efforts:
Step 1: Classify the audience you are attracting
Once you start to collect more firmographic details about your leads and prospects, you will start to notice patterns that emerge. These patterns are key to classifying your target audience into their respective segments.
Let us consider the following hypothetical example:
You have a tool—we’ll call it XYZ.ai—that aids with optimizing on-page SEO to help your landing pages rank better on various search engines. For a tool like this, you will notice the following patterns while collecting firmographic data:
- Freelance content writers, content marketers, and copywriters who acquire the mid-level plan after making use of the free trial retain the tool for at least three years at a stretch.
- Small to medium-sized businesses developing their blogs, and marketing collaterals who use the free trial convert to buying a basic plan for 2-3 months before canceling permanently.
- Enterprise-level accounts that have 1000+ employees require multiple user accounts for 2-3 years continuously.
Based on these patterns, you can immediately see that your biggest target market is going to be freelance content writers and copywriters, closely followed by enterprise accounts. This set of accounts provides the most value to your business and it makes sense to focus your efforts on targeting this cohort.
Step 2: Construct relevant messaging and offers
Now that you have identified your target audience, it’s time to attract them to your product i.e., XYZ.ai. Here are some of the things you would try to do so that your target audience gains awareness of your tool.
- Advertise on social media groups that consist of freelance writers, marketing agency owners, copywriters, etc., who are bound to keep an eye out for such tools.
- Leverage PPC—run campaigns with Google Ads, Facebook Ads, and LinkedIn Ads to reach your audience.
- Create separate landing pages that talk about the key benefits of XYZ.ai mapped to each segment of your target audience.
- Provide referral benefits to your target audience as they are most likely to be connected to many other individuals or agencies in their field of operations.
Step 3: Implement targeted sales and marketing campaigns
Now that your high-value targets are identified, it’s time to reach out to them.
Firmographic segmentation can help you elevate your sales and marketing campaigns. A sales intelligence tool like Slintel can equip you with a ton of firmographic data attributes that you can incorporate into your outreach efforts.
For example, let’s say you want to take XYZ.ai to a particular target company. You reach out to the CFO of a company that has 200-500 employees whose team currently uses a competitor’s SEO optimization tool. You can simply book a demo with our salespeople to see how Slintel can help you with it. To give you an idea, Slintel gives you the option to add multiple firmographic filters that will narrow your results to make them as accurate as it gets.
Step 4: Use lead scoring to qualify and convert your leads
Now that you have a ton of leads coming into your system with the help of your marketing campaigns, the firmographic data and segmentation you used to bolster your lead generation strategy can help you convert these leads into your customers.
Use the same firmographic data to create a lead scoring system that your sales teams can use to evaluate the leads to assess their potential deal value. In this step, you need to focus your efforts on understanding if the leads coming into your funnel are the best fit for your product and company.
A sales intelligence tool like Slintel provides buying intent scores that can help you score your leads better, allowing you to take a call on how you want to proceed further—either reach out to the lead or discard it.
Firmographic data is one of the must-have data points for any B2B company that wants to upgrade its customer journey and lead generation funnels.
As always, it is vital to understand who your audience is, what their needs are, how to effectively reach them, and finally, convert them to become a part of your loyal set of brand advocates.
The most important aspect of using firmographic data to elevate your lead generation funnel is not to just generate leads. It is important to know how to take action once a lead enters your funnel. Therefore, it is vital to have a sales intelligence tool that not only helps you identify your target audience but also scores your leads.