7 B2B Market Segmentation Examples to Boost Your Sales in 2024
Market segmentation is the process of dividing your target market into smaller groups based on common characteristics, needs, or behaviors. By doing so, you can create more personalized and effective marketing campaigns that resonate with your potential customers and increase your conversion rates.
But how do you segment your B2B market? What are some of the best practices and examples of B2B market segmentation? In this article, we will answer these questions and show you how to apply market segmentation to your B2B business.
KEY TAKEAWAYS
B2B market segmentation helps you identify and prioritize the most profitable and loyal customers for your business.
B2B market segmentation helps you tailor your value proposition, messaging, and content to the specific needs and pain points of each segment.
B2B market segmentation helps
Why is B2B Market Segmentation Important?
B2B market segmentation is important for several reasons:
- It helps you identify and prioritize the most profitable and loyal customers for your business.
- It helps you tailor your value proposition, messaging, and content to the specific needs and pain points of each segment.
- It helps you optimize your marketing budget and resources by focusing on the most relevant channels and tactics for each segment.
- It helps you improve your customer satisfaction and retention by delivering more relevant and personalized solutions and experiences.
How to Segment Your B2B Market?
There are many ways to segment your B2B market, depending on your business goals, industry, product, and customer base. However, some of the most common and useful criteria for B2B market segmentation are:
Firmographics
This refers to the basic characteristics of a company, such as industry, size, location, revenue, number of employees, etc. For example, a software company may segment its market by company size, targeting small businesses with a different marketing strategy than larger organizations.
Needs
This refers to the specific problems, challenges, goals, or desires that a company has and that your product or service can solve. For example, a consulting firm may segment its market by the type of service they need, such as strategy, operations, or marketing.
Behavior
This refers to the actions, preferences, or patterns that a company exhibits in relation to your product or service. For example, you might segment your market by how often they purchase your product or service, the average order size, when they purchase your product or service, where they purchase your product or service, or the channels they use to prospect and purchase.
Tier
This refers to the level of importance or value that a company has for your business. For example, you might segment your market by the potential revenue they can generate for you, the cost of acquiring them, the lifetime value they have for you, or the level of loyalty they have for you.
Customer Sophistication
This refers to the degree of knowledge, experience, or expertise that a company has in relation to your product or service. For example, you might segment your market by how familiar they are with your industry, how advanced they are in using your product or service, or how innovative they are in adopting new solutions.
7 B2B Market Segmentation Examples
To illustrate how B2B market segmentation works in practice, here are some examples of how different businesses have applied it to their marketing strategies:
1. Canon
Canon used firmographic segmentation to target different segments of the printer market based on their industry and size. They created different value propositions and messages for each segment, highlighting the benefits and features that were most relevant for them. For example, they emphasized speed and reliability for large enterprises, while focusing on affordability and ease of use for small businesses. As a result, Canon was able to increase its market share by up to 40% in some segments.
2. MetLife
MetLife used behavioral segmentation to target different segments of the insurance market based on their purchasing behavior. They identified four segments: loyalists (who buy multiple products from MetLife), switchers (who switch between different providers), shoppers (who compare prices and features before buying), and price-sensitive (who buy based on price alone). They then tailored their marketing campaigns and offers for each segment. For example, they offered discounts and rewards for loyalists, personalized recommendations and testimonials for switchers, educational content and free trials for shoppers, and low-cost plans and guarantees for price-sensitive customers. As a result, MetLife was able to reduce its customer acquisition costs by $800 million.
3. HubSpot
HubSpot used needs-based segmentation to target different segments of the marketing software market based on their needs and goals. They identified three segments: starters (who need basic tools to get started with online marketing), professionals (who need advanced tools to grow their online presence), and enterprises (who need sophisticated tools to manage their complex marketing operations). They then created different products and pricing plans for each segment, as well as different content and resources to educate them and guide them through their buyer journey. As a result, HubSpot was able to attract and retain customers across different stages of growth and maturity.
4. Slack
Slack used behavior-based segmentation to target different segments of the collaboration software market based on their usage and engagement. They identified four segments: power users (who use Slack extensively and frequently), regular users (who use Slack moderately and consistently), casual users (who use Slack occasionally and sporadically), and inactive users (who use Slack rarely or never). They then created different marketing campaigns and features for each segment. For example, they sent tips and tricks emails and push notifications to power users, testimonials and case studies to regular users, invitations and reminders to casual users, and reactivation and retention offers to inactive users. As a result, Slack was able to increase its user base and revenue by over 50% year-over-year.
5. Salesforce
Salesforce used tier-based segmentation to target different segments of the CRM software market based on their value and potential for the business. They identified four segments: key accounts (who have high revenue potential and high loyalty), growth accounts (who have high revenue potential but low loyalty), maintenance accounts (who have low revenue potential but high loyalty), and opportunistic accounts (who have low revenue potential and low loyalty). They then allocated different levels of resources and attention for each segment. For example, they assigned dedicated account managers and offered premium support and services to key accounts, invested in upselling and cross-selling campaigns and incentives for growth accounts, maintained regular communication and satisfaction surveys for maintenance accounts, and pursued low-cost and high-volume strategies for opportunistic accounts. As a result, Salesforce was able to maximize its customer lifetime value and profitability.
6. IBM
IBM used customer sophistication segmentation to target different segments of the technology market based on their level of knowledge and expertise. They identified three segments: innovators (who are early adopters of new technologies and solutions), pragmatists (who are cautious adopters of proven technologies and solutions), and conservatives (who are late adopters of established technologies and solutions). They then developed different products and solutions for each segment, as well as different marketing channels and messages to reach them. For example, they launched new products and solutions in niche markets and trade shows
for innovators, showcased success stories and best practices in mainstream media and industry events for pragmatists, and offered discounts and guarantees in mass media and direct mail for conservatives. As a result, IBM was able to capture a large share of the technology market across different adoption cycles.
7. Shopify
Shopify used needs-based segmentation to target different segments of the e-commerce market based on their needs and goals. They identified three segments: hobbyists (who sell online as a hobby or side hustle), entrepreneurs (who sell online as a full-time business or career), and enterprises (who sell online as a large-scale or global operation). They then created different products and plans for each segment, as well as different content and resources to inspire them and help them succeed. For example, they offered free trials and low-cost plans for hobbyists, customizable templates and integrations for entrepreneurs, and enterprise-grade features and support for enterprises. As a result, Shopify was able to serve over 1.7 million merchants worldwide.
TIP
A tip for B2B market segmentation is to use a combination of criteria to create more specific and relevant segments for your business.
B2B Market Segmentation Examples: How to Increase Global Demand in 2024
B2B market segmentation is the process of dividing a business-to-business market into smaller groups of customers based on their shared characteristics, needs, and behaviors. By segmenting the market, B2B marketers can create more personalized and effective campaigns that target the most relevant and profitable segments.
In this article, we will look at some examples of B2B market segmentation methods and how they can help increase global demand for your products or services in 2024.
Firmographic Segmentation
Firmographic segmentation is one of the most common and simple ways to segment a B2B market. It involves using criteria such as industry, company size, location, revenue, and number of employees to group similar businesses together.
For example, a software company may segment its market by company size, offering different solutions and pricing plans for small, medium, and large businesses.
Firmographic segmentation can help you identify the most attractive and profitable segments for your business, as well as tailor your marketing messages and channels to suit their preferences and needs.
However, firmographic segmentation alone may not be enough to capture the nuances and diversity of your B2B customers. You may need to combine it with other segmentation methods to get a deeper understanding of your target audience.
Needs-Based Segmentation
Needs-based segmentation is another popular way to segment a B2B market. It involves identifying the specific problems, challenges, goals, and desires that drive your customers to seek your products or services.
For example, a consulting firm may segment its market by the type of need that its clients have, such as increasing sales, reducing costs, improving efficiency, or enhancing innovation.
Needs-based segmentation can help you create more relevant and compelling value propositions that address your customers’ pain points and aspirations. It can also help you differentiate yourself from your competitors by showing how your solutions can meet your customers’ needs better than others.
However, needs-based segmentation may require more research and analysis than firmographic segmentation, as you may need to conduct surveys, interviews, focus groups, or other methods to uncover your customers’ needs.
Behavioral Segmentation
Behavioral segmentation is another useful way to segment a B2B market. It involves looking at how your customers behave in relation to your products or services, such as how often they purchase, how much they spend, when they buy, where they buy, and how they use your solutions.
For example, a cloud service provider may segment its market by the frequency of usage, offering different features and benefits for occasional, regular, and heavy users.
Behavioral segmentation can help you optimize your pricing strategies, loyalty programs, cross-selling and upselling opportunities, and customer retention efforts. It can also help you identify potential gaps or opportunities in the market based on your customers’ behavior patterns.
However, behavioral segmentation may require more data collection and tracking than firmographic or needs-based segmentation, as you may need to use tools such as CRM systems, web analytics, or email marketing software to monitor your customers’ behavior.
B2B market segmentation is a powerful tool that can help you increase global demand for your products or services in 2023. By segmenting your market into smaller groups of customers based on their characteristics, needs, and behaviors, you can create more personalized and effective marketing campaigns that target the most relevant and profitable segments.
Some examples of B2B market segmentation methods are firmographic segmentation, needs-based segmentation, and behavioral segmentation. Each method has its own advantages and disadvantages, so you may need to combine them to get a comprehensive view of your target audience.
FREQUENTLY QUESTIONS
Q1: What is B2B market segmentation?
A: B2B market segmentation is the process of dividing your target market into smaller groups based on common characteristics, needs, or behaviors.
Q2: Why is B2B market segmentation important?
A: B2B market segmentation is important because it helps you create more personalized and effective marketing campaigns that resonate with your potential customers and increase your conversion rates.
Q3: How do you segment your B2B market?
A: You can segment your B2B market using various criteria, such as firmographics, needs, behavior, tier, or customer sophistication.
Q4: What are some examples of B2B market segmentation?
A: Some examples of B2B market segmentation are Canon, MetLife, HubSpot, Slack, Salesforce, IBM, and Shopify.
Q5: How do you measure the effectiveness of your B2B market segmentation?
A: You can measure the effectiveness of your B2B market segmentation by tracking metrics such as customer acquisition cost, customer lifetime value, customer satisfaction, customer retention, customer loyalty, revenue growth, market share, etc.
References:
https://www.infosys.com/about/knowledge-institute/insights/Documents/future-customer-engagement.pdf
https://whatis.techtarget.com/definition/B2B2C-business-to-business-to-consumer
https://en.wikipedia.org/wiki/Special:BookSources/978-3-640-89316-4
https://archive.org/details/ecommerceformula00plan
https://peertopeermarketing.co/b2b-segmentation/
https://sopro.io/resources/blog/b2b-market-segmentation-guide/
https://surveysparrow.com/blog/customer-segmentation-examples/
https://leadsatscale.com/insights/b2b-market-segmentation/
https://www.adience.com/blog/how-to/how-to-conduct-a-b2b-market-segmentation
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