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What is B2B customer segmentation?

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Definition of B2B customer segmentation

B2B customer segmentation is the practice of identifying and classifying customers based on their shared characteristics. Breaking down a big customer base into smaller segments for marketing purposes allows you to offer a more tailored service to your customers.


Everything you do in customer success revolves around finding new and unexpected uses for your products that benefit both you and your customers. Using a B2B customer segmentation model helps you narrow your focus by splitting your portfolio into similar accounts.

B2B market segmentation and customer segmentation are different concepts. B2B segmentation can be created based on factors such as size, relative value, industry, location, requirements, or license evaluations.

What is B2B customer segmentation?

What are the 4 types of B2B customer segmentation?

Customer data gathered from numerous segment types is utilized by B2C marketers. Given our focus on B2B marketing, here are four critical segments and their relationship to B2B customer segmentation.

Firmographic segmentation

Firmographic data is the inverse of the demographic data stated above. It is used as a benchmark for categorizing wholesale clients according to B2B demographic segmentation features.

  1. Scale
  2. Industry type
  3. Geo-location
  4. Status
  5. Performance
  6. Revenue

 

  • You’ll divide your B2B client base into groups with similar characteristics based on the six qualities described above and any other attributes you choose.
  • Then, you may develop a strategy for approaching and promoting the product/service based on the usual features of the customers in each category.

 

However, B2B marketers should be mindful that the firmographic data does not always provide accurate customer data as it should be. Customers categorized into a category may not always have the same needs as predicted. As a result, figmographics alone will not suffice for the right segmentation strategy.

Geographic segmentation

Geographic segmentation enables the marketing team to segment customers based on their geographic location. This might be as specific as a city and zip code or as vast as Australia or the Eastern European region.

Geographic data points worth considering for B2B customer segmentation include country, city, and timezone. Why is this important?

You can combine this information with demographic and behavioral data to better target your strategic marketing initiatives. For example, you’ll know the optimal time of day to send emails to maximize open rates.

Segmentation of need and demand

Needs and demands are major determinants of B2B market segmentation. Companies may ultimately determine their customers’ needs and demands through marketing channels like websites and customer surveys. This study is also referred to as behavioral segmentation in B2C marketing (retail customer segmentation).

You may categorize customers based on their needs for your product/service. All business segmentation data pertaining to these features that clients want would be a wonderful contribution to developing appropriate strategies.

B2B customer segmentation based on needs begins with what draws prospective customers to your business in the first place. For example, If you’re a software (SaaS) company and a site visitor contacts you after reading a blog post on file sharing, you may realize that the visitor demands an easier way to share files. As a result, you may choose to target that prospect with further information on that subject in order to move the user through your sales funnel.

On the other hand, the major disadvantage of this strategy is that it is difficult to ascertain the precise wants of clients. Because they do not know what they need most.

Behavioral segmentation (purchasing behavior)

Companies may ultimately determine their customers’ needs and demands through marketing channels like websites and customer surveys. This study is also referred to as behavioral segmentation in the marketing world.

In business marketing (B2B), purchasing behavior is regarded as the most important behavioral segmentation method. Therefore, B2B marketing experts have discovered three distinct customer behavior patterns based only on purchasing behavior.

Complicated purchasing behavior

A B2B buyer is actively and thoroughly involved in the purchasing process, spending time learning about the features and considerations to consider, narrowing down possibilities, and eventually making a choice.

Comparative purchasing behavior

A B2B buyer is actively involved in the purchasing process but is unaware of substantial brand differences. Therefore, they will not be able to compare products. They will make a purchase quite simply, but will request confirmatory validation following the transaction. This may occur in B2B when a customer is evaluating a new product and discovers that rival goods provide comparable features.

Habit-based purchasing behavior

A B2B customer has limited control over the purchasing process and buys out of habit. By the way, it is not something that is frequently encountered in B2B transactions. In B2B markets, everybody is replaceable.