Allison Thomas
Allison Thomas

We live in a hyper-competitive marketing ecosystem. Your competitors are clawing at the doors of every one of your prospects, and you need to get the right message to them at the right time to win them over. But how do you possibly ensure that you send perfectly-crafted messages to every prospect in your funnel? After all, there are millions of fish in the sea, and your marketers only have so much time and energy.

Fortunately, you don’t need to granularly craft clever campaigns for each prospect. Instead, you can use segmentation to break your prospects down into specific groups to maximize the efficiency and personalization of your campaigns. Here’s everything you need to know about B2B segmentation, and what types of segmentation strategies work best in today’s ad marketplace.

Why Is Segmentation Important?

Segmentation is the science and art of dividing prospects into specific groups. Typically, these groups are defined based on behavioral traits, demographics, business fit, priorities, needs, wants, and intent. In other words, segmentation involves taking a pickaxe to your massive chunk of potential prospects to find nuggets of gold. By segmenting customers, you gain quantifiable marketing and sales advantages. For example, you can cater marketing campaigns to each segment based on their need, qualify leads based on ability to purchase your product or service (i.e., “decision-maker” status), and spend the right resources on potential customers based on their overall intent to purchase.

Segmentation reduces marketing costs, improves marketing effectiveness, generates lukewarm cold calls, and boosts campaign results. And we’re not just blowing bubbles. According to research by Bain & Company, 81 percent of executives believe segmentation is a key component of their growth, and organizations employing impactful segmentation strategies enjoy 10 percent higher overall profits. Another survey by Mailchimp found segmented email campaigns improve open rates by 14 percent, increase clicks, lower bounce rates, and minimize spam reports. And McKinsey notes that segmentation increases new account growth by 10 percent in just one year.

You can find tangible, measurable growth through effective B2B market segmentation. But where do you start?

Common B2B Segmentation Strategies

Let’s take a quick look at the “big 3” segmentation strategies B2B businesses use to drive growth into their marketing ecosystem. However, before we continue, it’s important to note that segmentation isn’t a catch-all strategy. Every organization has unique segmentation needs based on their product, service, buyer’s journey, funnel, pipeline, and target audience.

1. Firmographics & Demographics (i.e., “Fit”)

The first, and probably most popular, method of segmentation is what we consider a “fit” segmentation. For most B2C businesses, demographics are the key consideration in fit. You want to find people whose demographic details (e.g., age, gender, income, etc.) fit your target audience. For B2G companies, firmographics are typically more important. You aren’t looking for anyone. You need decision-makers. The people who influence purchasing committees, act as consultants, and have the C-level authority to pull the purchase trigger are all primary targets.

Examples of firmographic data include:

  • Industry
  • Position
  • Company size
  • Company revenue
  • Consulting status
  • Location
  • Sales cycle stage (if possible)
  • etc.

2. Behaviors (i.e., “Intent”)

While firmographic data provides insights into an entity’s ability “fit,” it says nothing about their intent to purchase your product. For this, you need to rely on behavioral data. For example, you may target prospects who have viewed your blogs, downloaded whitepapers, or attended webinars. These are people with a measurable interest in your product, they just need a gentle sales nudge and some all-important nurturing to finally commit.

Examples of behavioral data include:

  • Pageviews
  • Downloads
  • Gated content form fills
  • Email opens
  • Social engagement
  • Videos viewed
  • Purchase history
  • etc.

3. Experience (i.e., “Ability”)

Intent and fit are incredibly important. But most B2B companies also need to understand “ability.” Is the person you’re attempting to target capable of understanding, using, and finding value in your product? Does the company actually need your product? And is the company aware of your product and how it works? All of these are important. For example, let’s say you sell SaaS accounting software. If your prospect already uses accounting software, you need to target them differently than a company still working with pen-and-paper. The message, tone, and value drivers of the content and ads you send to them should cater to their understanding and current position.

Examples of experience-based data includes:

  • Views of vs. content
  • Views of features content
  • Views on content about “why you need xxx”
  • Existing purchases
  • Current solution
  • etc.

Playing Devil’s Advocate: Segmentation Isn’t Everything

Before we dive head-first into some social media segmentation strategies, let’s quickly touch on one important point: segmentation has drawbacks. For starters, data can be misinterpreted, misused, and mismanaged. So, you may be sending targets the wrong type of content. For example, a form fill on a whitepaper doesn’t always mean interest. In fact, it could be coming from a competitor or market researcher. Segmentation also increases upfront costs. You have to create unique content for all of these B2B segments. While it should reduce long-term costs and provide unparalleled growth, any wrong moves can leave you with a bucket of costs and little to nothing to show for it.

Finally, segmentation requires a deep understanding of advanced marketing. If your segments are too narrow, you can drive up costs and reduce conversions. If they’re too large, you risk missing the objective completely. You need to combine multiple segmentation layers effectively to find value in segmentation, and many businesses dip their toes in the water without an air-tight strategy.

Segmentation Advice for Social Media

To help illustrate the value of segmentation in practice, let’s look at how segmentation works across multiple unique social platforms. Remember, segmentation isn’t restricted to social platforms. You can segment email campaigns, website data, etc.

1. LinkedIn

When it comes to B2B social media platforms, LinkedIn wears the crown. Eighty percent of LinkedIn’s audience drive business decisions, and they have 2x the buying power of other social platforms. Of course, this comes at a price. The average LinkedIn click costs $2, so you need to be savvy with your budget. Luckily, LinkedIn’s ad targeting capabilities are incredibly sophisticated and purpose-built for B2B brands. You can easily use the ad targeting tool to segment based on company connections, industry, size, and followers. You can also leverage degree data, age, gender, job title, years of experience, and even specific groups and interests of your prospects. In other words, building out firmographic data on LinkedIn is simple. Again, you still need to build out effective segments (this is the hard part), but putting those segments to work in LinkedIn is relatively straightforward.

2. Facebook

Similar to LinkedIn, Facebook offers a variety of demographic targeting capabilities. However, Facebook offers a more robust custom audience feature. You can use data from across your ecosystem (e.g., CRMs, SaaS apps, etc.) to set up custom audiences for each ad, and leverage Facebook’s built-in demographic targeting algorithms to build a bunch of hyper-niche campaigns. The big drawback of Facebook is its lack of Firmographic targeting (compared to LinkedIn), and its oversaturated user base filled with non-decision-makers.

3. Google Ads

As you’ve probably gathered, virtually every social media and ad platform offers segmentation. But Google Ads takes it to another level by allowing you to combine Google Analytics data from your website into your campaigns seamlessly. Technically, Google Ads probably offers the best website-based segmentation, but your targeting won’t be as dynamic as Facebook or LinkedIn — since Google doesn’t gather firmographic or demographic data at the same level as social media platforms. Generally, your Google Ads audiences will be primarily focused on data from your website.

Need Some Help?

In modern marketing, winning conversions borderline requires savvy segmentation. Unfortunately, that’s easier said than done. To win with segmentation, you need a deep understanding of data, analytics, marketing, platforms, and ads. Are you looking to make major wins with segmentation? We can help. At TAM, we bridge gaps between data and results. Contact us to learn more.

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