All You Need To Know About Segmenting Customers for B2B Businesses

Idongesit Inuk

Content Marketer

Managing B2B businesses might be challenging, especially if you don’t know how to correctly segment your customers. A lot of your well-intentioned efforts could be focused in the wrong direction. You may waste resources targeting the wrong customers or investing in ineffective marketing strategies. This can cause more problems than solutions for your business. 

In this article, you’ll learn all the information you’ll need, including the best practices to try when segmenting customers for B2B businesses. 

Factors to Consider When Segmenting B2B Customers

Since people are looking at customer behaviour in marketing, coming up with the best strategies can be challenging because things can become ambiguous. 

Behaviour is hard to understand, mainly if you’re relying on it to develop strategies you think might work for your business. 

The criteria you use to segment B2B customers can vary a lot depending on your market, goals, and the service or product you offer. Even so, some of the most common factors to consider are the following:

• The roles and processes involved in the people who buy your offers.
• People’s problems and how you could solve them. 
• Growth, size, location, and revenue of your target audience. 
• Interactions, reactions, and actions regarding your product. 

Creating a B2B Customer Persona

You need buyer personas if you want to identify your target audience and turn them into your loyal customers. 

Firstly, you must understand your potential customer’s needs. What is their problem and how can you help them?

During this stage, you and your team should focus on finding top-tier solutions that help you clearly define your ideal customer and their pain points. Furthermore, the options you offer customers should be straightforward instead of challenging or complicated to understand. 

It’s been shown that many customers believe solutions are very challenging to comprehend, which often stops them from going back to the business they got them from. 

If you want your buyer persona to be loyal, you need to provide them with straightforward and innovative options to solve their problems.

The second step is to ask specific business questions. You’ll have to find out a lot of information about your buyer persona, for example, their industry’s trends, job titles, buying triggers, favourite social media platforms, preferred modes of communication, and more. 

With a live chat app like Chatway you can talk directly to the customers on your website and get insights about their needs, pain points, and interests. Nonetheless, you can also look for data online, use surveys, read comments on social platforms or get market data from third-party providers. 

Once you gather information, it’s time for you to create your buyer personas. Make a fictional but accurate description of the type of client you’ll cater to, and you’ll be ready to go. 

Different Types of Customer Segmentation

Separating your customers into different groups is essential, particularly when you want to create the best strategies to turn them into loyal customers.

However, there are different ways to separate your buyer personas into groups. Here are some of the most common criteria: 

1. Demographic

Gender, age, family size, occupation, education level, and ethnicity are some demographic factors that you can rely on to separate your buyer personas.

When you rely on the demographic approach, your company will be able to develop marketing efforts that specifically cater to people with similar characteristics. 

You could, for example, separate your buyer personas to only target millennials or baby boomers and offer them your products or services. 

2. Geographic

It consists of dividing your buyer personas into different segments considering the place they reside in. 

When you use geographic segmentation, you could divide people depending on the country, region, state, or neighbourhood they’re in. 

Even though geographic segmentation can be very powerful, it could be much more useful if you combine it with other strategies, such as using a chat app like Chaty to communicate with your customers on social channels like Whatsapp, and LinkedIn to learn more about their preferences.

3. Firmographic

It’s a type of demographic segmentation that only considers the characteristics of firms or companies. Generally, getting access to these is not expensive.

You could rely on firmographic segmentation if you want to target specific businesses, for example, small ones. 

4. Psychographic

With this method, you’ll be able to categorize customers depending on their psychological traits. Some of these include personality attributes, interests, preferences, behaviors, and beliefs. 

The psychographic method focuses on people’s internal motivations. To follow it, you’ll have to rely on surveys and other approaches to study the psychology of your customers. 

Over the years, the psychographic approach has gained a lot of fame because people are demanding more personalized options. Therefore, it’s the ideal alternative if you want to create a relationship with your customers and make sure they’re loyal to your brand. 

Lastly, with the psychographic approach, you’ll be able to build various buyer personas. It’s a fantastic option since you’ll have a different customer profile depending on the population you’re targeting. 

5. Needs-based

It’s similar to the previously mentioned method, but in this case, you’ll only be looking at people’s needs and requirements instead of their beliefs, motivations, and personality. 

When you rely on a needs-based approach, you’re supposed to create products that will fulfil those requirements. Therefore, your business must be very flexible and willing to offer new options to your clients. 

Marketing managers often start a needs-based segmentation by looking at different aspects of consumer data, such as psychological traits, consumer behaviour, and demographics. 

The idea is to be able to divide the market into specific customer categories. Since you can define as many of them as you want, it’s a very versatile option. 

Best Practices for Customer Segmentation

Effectively separating your customers is possible, but you must rely on different options, such as utilising data from a live chat app, finding out information about your target audience, and more. 

The following are the six most crucial guidelines you should follow. Take a look at how to put them into practice. 

1. Collect the Information You’ll Need

You can’t make effective segmentation if your data is inaccurate or incorrect. On the contrary – getting the most precise pieces of information is probably the first thing to check off your list. 

Overall, you must first make sure you have enough information to have a correct sample size. Otherwise, your conclusions won’t be accurate. 

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Moreover, you must make sure that you’re only collecting high-quality information. To do this, you have to rely on some top-notch options or reliable data sources. 

2. Keep Your Data Current and Accurate

You won’t be able to correctly segment your customers unless you’re relying on precise and updated data. 

Unfortunately, the world of digital marketing is constantly changing. Therefore, old information won’t work much – you’ll have to update it. 

However, there are ways to solve this. You could use various apps to make sure you’re always relying on your customers’ updated information (for instance, use an automated card updater service). 

3. Focus on Specific Data

Even though you’ll need a lot of information about your customers, you most likely won’t use it all. 

Instead, you must put all your efforts into specific data – the one that will help you grow your revenue.

For example, If you’re developing apps for math students, for example, you will need the overall number of people you’ll be working with. However, you only need to know how many of them study math. 

4. Sync Your Information with the Best Workflows

You must put theory into practice once you have all the data you need. After you get the number of math students you need, what will you do with that?

Something you could do is offer a trial version of your app for free. You might also give them a free version of it, and it’ll allow you to have some people test it and leave out reviews, which will also help you grow. 

5. Fill Out the Right Buckets

As the article mentioned, there are many different types of segmentations. Nonetheless, you must focus on the most convenient ones for your business. 

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Demographics and geographic information are often useful. However, in most cases, you’ll have to combine these external aspects with more personalized ones, such as psychological characteristics. 

6. Optimize Customer Journeys

The best part of relying on B2B customer segmentation is that you can incorporate it into your customers’ journeys. 

Whether you’re attracting new customers or implementing loyalty programs to maintain their relationship with your brand, client segmentation will be immensely useful. You just need to take advantage of the information you have. 

Conclusion

Customer segmentation is one of the most crucial aspects of managing a B2B business. If you do it correctly, you’ll be able to make your company thrive!