What is firmographics?
Firmographics are the compilation of attributes to segment the target markets and identify ideal potential customers. Such data helps classify companies according to geographic location, industry, customer base, type of organization, technologies used, etc. With this information, you can plan a more effective sales prospecting strategy and improve your sales activities.
Firmographics enable B2B companies in segmenting their target markets by categorizing customer companies according to key factors. Similar to how B2C organizations segment their clients based on demographics and psychographics, B2B enterprises can gain a better understanding of their target markets and potential customers by segmenting them.
Definition of firmographics
Firmographics define target B2B markets by segmenting particular corporations according to important factors. B2B companies can find customers that are likely to purchase by grouping companies through this methodology.
Any knowledgeable sales expert will recognize the value of any additional information on a prospect. Due to the fact that this data can be used to direct a sales pitch, it’s unsurprising that some organizations invest substantial sums in the collection of firmographic data. As we will see, the firmographic data is largely self-sustaining.
Firmographics vs demographics
Firmographics and demographics —used in B2C marketing— are similar concepts. The difference between these concepts is that demographics group consumers, while firmographics classify companies. In other words, demographics are concerned with people, yet firmographics deal with businesses.
Target market and customer segmentation
Focus on the firmographics data of your ideal customer profile to find an accurate answer to this question; Which industrial markets or segments are the right places for you to sell your products?
Target market segmentation clarifies whether your products precisely appeal to which industrial segments. Therefore, a data classification like firmographics is required in industrial sales and marketing. It can help you a lot, especially when you have multiple product types that may address different industry segments. In this case, you need both target market and firmographic customer segmentation.
B2B segmentation approach
B2B market complexity frequently necessitates multidimensional target market segmentation techniques that use a variety of characteristics in order to accurately reflect or illuminate market structure. As a result, good outcomes demand that a segmentation approach be tailored to a set of unique strategic market objectives and target market conditions.
You should evaluate the similar group of companies or industry segments your brand appeals, by using firmographic data sources. You will need this to position your products to each one effectively. The benefit of target market identification is picking the right approach to any potential customer in any industry segment.
Major firmographic data types
Following are the principal firmographics industrial vendors use as their industrial market segmentation indicators.
Industry firmographics refer to the activities of a company. Companies usually focus on specific industries due to their product types or customer demands. The industry type is a natural market segmentation attribute for companies. Grouping those potential customers allows you to adjust and modify your prospecting approach for each industry segment.
This improved approach will provide more productive results than prospecting in the same way to every industry segment. Instead of reaching various companies across all industries, you can narrow your targeting and increase your chance of getting more valuable leads.
Location firmographics refer to the location of the potential customer. As a segmentation attribute, companies may be classified by city, industrial zone, state, region, country, or continent. As another option, you may target leads according to their distance from a central spot, like your company’s warehouse or facility location.
Location firmographics may have great importance, especially for industrial zones. Many industrial companies operating in the same industry segment usually gather in the same zone. This gathering provides you an excellent advantage to target multiple companies close to each other simultaneously.
Size firmographics refer to the relative size of a potential customer. In firmographics, company size comprises two variables: annual revenue and employee count.
Within firmographics, revenue is a crucial indicator. Your products have to be affordable by your leads. For example: If your product is premium-range and expensive, only focus on high-revenue companies. Low revenue companies most probably cannot afford your products.
The employee count of a company is a good indicator of its current position. Is it a small, local business or a multinational organization? This information directly affects your prospecting approach. A local mid-level company’s requirements and procurement behaviors will differ from a global holding.
Status and structure
Status and structure firmographics refer to one company’s relation to another or refer to its legal status. Industrial establishments may be classified as:
- Individual companies
- Subsidiaries of larger organizations
- Standalone entities
- Limited liability corporations
- Privately held companies
- Publicly-owned companies
You now have firmographic data on the key customers. What happens now? It’s critical to define your ideal customer, which I’m sure you’ve already done. Analyze current customer data to identify which accounts are the most and least active.
Your best customers are generally your greatest customers for a reason. What are those justifications? Certainly, there are customer oddities, invisible social links, and other data that you will never have. But this is data that is not able to generalize and thus worthless to know.
With firmographics, you already possess the data necessary to begin producing excellent, tailored content. Firmographic segmentation has a number of significant benefits, including higher revenue and return on investment. Market and customer segmentation is quite effective in generating top-of-funnel leads.
If you know for which type of organizations your product is of value, you can directly aim at those company types. This knowledge significantly increases the effectiveness of your prospecting activities.
Firmographics help you understand and evaluate your target market. The better you evaluate your target industrial markets, the more specific the value proposition you can offer. In this case, your proposal results in purchasing action most probably.
Please spend some time thinking about your target industrial segments and prioritize them according to possible levels of benefit that they may get from your products.