No two customers are quite alike. But dig deeper and you’ll find that some of your B2B customers share unique characteristics. Knowing these characteristics — a process called B2B segmentation — makes it easier to tailor your marketing and customer journey in a way potential customers will notice.
In marketing, generalized messaging isn’t always effective. General messaging talks to everyone and no one. There’s nothing that makes your customer stop in their tracks and think, “Hey, they really get me!”
That’s where B2B customer segmentation can help. While many marketers associate segmentation with consumer marketing, it also applies to business customers. Here’s how you can use this strategy to reach more customers and drive more sales.
Contents:
What Is B2B Customer Segmentation?
B2B Customer Segmentation Importance
What Is an Example of B2B Customer Segmentation?
Key Differences Between B2B and B2C Customer Segmentation
Methods for Effective B2B Customer Segmentation
Best Practices for Successful B2B Customer Segmentation
Implementing B2B Customer Segmentation in Your Business
What Is B2B Customer Segmentation?
B2B customer segmentation refers to how you divide your business’s customers into groups, or “segments.” These segments are based on shared characteristics, such as the products they purchase or the lead channels they came through.
For example, a business selling software might have customers in multiple industries. Companies might vary in size (e.g., startups, enterprise customers). Knowing these characteristics, you can tailor your marketing, sales, and product offerings to meet their unique needs. This might have an affordable solution for smaller companies and more advanced features for enterprises, for example.
You might also hear customer segmentation referred to as audience segmentation. Same thing.
Ultimately, B2B segmentation helps you target your efforts more effectively. You can put the right message in front of the right person via the right channel. This also helps you prioritize resources and find growth opportunities within different segments.
B2B Customer Segmentation Importance
The importance of customer segmentation cannot be overstated. Segmentation allows you to tailor your sales and marketing to different types of customers in ways that matter to them. They’re more likely to notice your campaigns when you speak directly to their needs.
It also gives you a more accurate picture of who your target customers are and what makes them buy from you. Segmenting is powerful for surfacing your competitive advantages, and you can build on these insights to attract more customers.
What Is an Example of B2B Customer Segmentation?
Let’s dig deeper into our software business example of B2B segmentation. Here are customer segmentation examples to put things into perspective.
Company size
Your customers might include small businesses, mid-size companies, and large enterprises. A B2B customer segmentation strategy might include:
- Smaller storage packages, basic features, and lower monthly fees for small businesses
- More storage, advanced features, and scalable pricing plans for medium companies
- Extensive storage, enterprise-level security features, dedicated customer support, and custom pricing for large companies
Industry
Companies of all industries rely on software for many aspects of their business. Knowing which industries you serve can help you better segment your customers and tailor your products to them.
Segmentation for B2B in this case might include the following:
- Technology firms might need fast, scalable solutions and integrations with other tech tools.
- Healthcare organizations focus on data security and compliance with regulations like HIPAA.
- Schools and universities could be interested in discounted pricing for educational institutions.
In this case, you’re looking at the characteristics that stand out to each type of industry. You want to align your messaging with what they think is important in a software solution.
Geographic location
Segmenting customers by geographic location is a common option for B2C marketing, but it can also apply to B2C.
Here’s how segmentation for B2B might look:
- Customers in North America may prefer local data centers and 24/7 customer support in their time zone.
- European clients might prioritize GDPR compliance and multilingual support.
- Businesses in the Asia-Pacific region might gravitate to flexible pricing and local partnerships.
Buying behaviors
Another option is to pay attention to your customers’ buying behaviors. Various customer behaviors can indicate their loyalty toward you and their willingness to buy from you in the future and refer you to others.
B2B customer segmentation examples in this case may include:
- New customers who likely need guidance early and often
- Long-term clients who might be interested in premium features or upsells
- Price-sensitive customers who prioritize cost over features and might respond better to discounts or special offers
Tip: Check out our Personalization at Scale Guide to discover how in-depth customer segmentation can help you create better customer experiences!
Key Differences Between B2B and B2C Customer Segmentation
There’s some overlap between B2B and B2C customer segmentation, but the differences between the two are worth mentioning.
Customer characteristics
In B2C, your customers are individual consumers. Marketers usually segment customers by demographics (age, gender, income), psychographics (lifestyle, values), or behavior (purchasing habits).
In B2B, other characteristics matter. Businesses are your customers, not the general public. You can segment customers based on things like company size, industry, revenue, or even job function.
The decision-making process
The decision-making process in B2B is often more complex and involves multiple stakeholders.
For instance, a purchase might require approval from a manager, finance department, and even the CEO. Because of longer and more complex buying cycles, marketers usually need to account for the roles and responsibilities of various decision-makers.
In B2C, the decision-making process is usually simpler — it typically involves just one or two people. Segmentation here might focus on individual preferences, emotional triggers, and buying motivations.
Purchase size and frequency
B2C transactions are usually smaller and more frequent. Segmentation focuses on purchase behavior, like how often someone buys a product or their average spend per transaction.
In B2B, transactions are larger in scale and the relationships are long term. Segmentation may focus on the frequency of purchases, contract size, or the potential for repeat business. For example, you might segment based on high-value clients versus occasional buyers.
Relationship focus
Relationships are critical in B2B. Businesses tend to build long-term partnerships with vendors or service providers. Therefore, B2B segmentation may focus on customer loyalty, relationship stage (new vs. long-term client), or the potential for upselling.
While relationships matter in B2C, especially for building brand loyalty, the focus is heavier on attracting new customers and encouraging repeat purchases. Segmentation might target loyal customers, first-time buyers, or those at risk of churning.
Methods for Effective B2B Customer Segmentation
The goal of B2B segmentation is to group your customers in a way that allows you to personalize your marketing to specific needs. These three B2B customer segmentation models can help you start uncovering potential customer segments.
Firmographic segmentation
Similar to segmenting by demographics, firmographic segmentation refers to dividing customers by company attributes. This could be company size, industry, revenue, or even the customer’s target customer.
Focusing on firmographics gives you insight into how a company operates and what their needs might be. You can better align your product offerings when you know their needs and preferences.
Tiered segmentation
Many companies offer their B2B services in tiers — multiple levels of service at varying price points. You might market to each tier in different ways.
For example, your lowest-priced tier might cater to small businesses or price-sensitive customers who prioritize value.
You can also peel back the layers of each tier to find sub-segments of each type of customer.
Needs-based segmentation
A needs-based approach focuses on finding the specific needs or pain points of your customers.
One option is to segment customers based on the challenges they face. For example, some businesses might prioritize cost savings, while others focus on improving efficiency or compliance.
Different customers might require different solutions. Segmenting by the type of solution they need — such as basic, advanced, or customized — can help you better meet their needs.
These are just a few types of B2B customer segmentation. As you explore different ways to group your customers, you’ll likely uncover multiple B2B customer segmentation characteristics that may prove valuable in your marketing.
Best Practices for Successful B2B Customer Segmentation
The challenges of B2B customer segmentation can prevent companies from taking full advantage of this opportunity: a lack of marketing data, complex buying cycles, and changing market conditions, for example.
To get the most from B2B customer segmentation, we recommend following these best practices.
Define clear objectives
Take a moment to clarify your marketing goals. Are you trying to increase sales, improve customer retention, or optimize your marketing efforts? Your objectives will guide the segmentation process.
Collect high-quality customer data
Make sure the data you’re using is reliable and up to date. You can check your CRM, sales data, and external sources to learn more about your customers and the relationships between them.
Consumer intelligence platforms like Meltwater can also help you find customer segments. AI-powered tools can find connections between data that might evade the human eye.
Start with simple customer segments
Segmentation doesn’t have to be overly complicated. Start small with basic, broad segments. Test these segments and adjust your approach before moving into more complex segments.
Create personas for each segment
There’s a difference between personas vs segments, and both can help you effectively market your business when done right.
Your segment is a group of customers who share similar characteristics. Of that group, you can create one or more “personas” that represent people within the segment.
Personas are helpful when designing your marketing messaging. The personas should represent the customers within the segment. You can ensure you’re speaking directly to your ideal customer and get rid of any messaging or tactic that doesn’t cater to their needs.
Test and refine your customer segments
As you develop your customer segments, make sure you test how well your marketing performs for each segment. Customer segmentation tools like Meltwater can help you keep the details of each segment in one place and track your efforts.
Implementing B2B Customer Segmentation in Your Business
Customer segmentation for B2B can help you maximize your marketing resources while minimizing the effort to reach the right audience. Meltwater can help you surface segments with ease, including those you might not have thought to explore.
Meltwater is an AI-driven data platform that lets you tune in to your customers across the web. We analyze billions of data points in real time, allowing you to keep tabs on conversations that matter to your business.
Discover more about your customers’ needs and what they’re saying about your products or industry, and get inside their minds so you can market to them more effectively.
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