What Is Market Segmentation: Types & Examples

91% of organizations reportedly face common data quality issues, according b2b segmentation examples to Barley Laing from Melissa. Using these segmentation examples, your customer success team can provide tailored experiences for specific groups while driving operational efficiency. B2B customer segmentation by industry leverages firmographic data to address industry-specific needs, use cases, and challenges. Your resulting ABM tiers inform strategies your customer success team can prioritize their resources and engagement.

Attitudes can be a bit complex considering that everyone has a unique worldview, but it is still possible to categorize customers by their attitudes. For instance, Vans managed to make their shoes highly popular by positioning the shoes to appeal to people with an interest in skateboarding. For instance, five star hotels focus majorly on luxury experiences and quality of service when marketing themselves. How you market your products and services will depend on the social class you are targeting. Customers want to purchase products that are well aligned with their lifestyles, and therefore, when marketing to each lifestyle group, you need to show how your product or service will enhance their lifestyle.

As a result, integrating psychographics into target market segmentation strategies helps B2B marketers identify and profile individual personas primarily through the focus on IAO variables (interests, activities, and opinions). By focusing on these variables B2B marketers can develop a better understanding of which companies provide more investment potential, then create campaigns to fit. Firmographic market segmentation data refers to the analysis of whole industries and the companies which operate within them to determine whether they have the potential to become high-value clients. This approach is fundamental to ensuring that each campaign’s core messaging is personalized correctly. Demographic data is simple to record and due to its static nature, is generally more stable than other data types, plus the type of information it provides is often actionable.

To implement RFM analysis effectively, you need a system for scoring and acting on the data. Instead of a one-size-fits-all approach, you can tailor your communication to match a customer's value and engagement level. The strategic value of RFM analysis lies in its ability to create highly specific and profitable marketing actions for each segment. RFM analysis is a quantitative, behavior-based method that segments customers based on their transaction history. Geographic segmentation divides customers based on their physical location, including country, state, city, climate, or even neighborhood. The real advantage of behavioral segmentation is its ability to trigger timely, relevant, and automated communication.

How to segment your market

It can be effective to utilize a combination of market segmentation methods and a myriad of data variables to create a complete picture of prospects, their respective organizations, and how they can be organized. This approach improves targeting, increases engagement, and helps teams allocate resources more effectively. By the end, you’ll understand how segmentation helps B2B teams improve targeting, generate higher-quality leads, and build stronger customer relationships. Personalized messaging addresses specific needs and challenges, making your efforts more relatable. This refers to the specific problems, challenges, goals, or desires that a company has and that your product or service can solve.

These factors can include any one or more of the segmentation techniques mentioned above. Some important metrics to consider are purchase frequency, feature usage, and website engagement. The high-value segment could include frequent flyers, possibly those who travel frequently for business and purchase more expensive seats and upgrades. With a needs-based analysis and market segmentation approach, marketers can deliver messaging that resonates with their audience on a much deeper level. Whether it’s a customer relationship management (CRM) platform, a website CMS, or a niche-specific software tool, utilizing technographic segmentation can help enhance sales and marketing efforts.

Method 4: Behavioral Segmentation

Although B2B customer segmentation is better understood today, it still poses several challenges. This research will help you see what your customers need, where you stand compared to the competition, and how well you’re doing. You can do this really easily by using a TAM calculator, but if you’re not sure where to start, use our Identify Your Total Addressable Market Playbook. The trick is to align your approach with where your prospects are. By listening to your prospects and making them feel heard and valued, you will get a better idea of their needs.

Creating detailed buyer personas gives you the ability to craft content and messaging that truly connects with your audience. When you know your audience's specific pain points and preferences, you can craft messages that resonate instead of generic content that gets ignored. When you have well-defined target audience types informed by strong research, you can stop waiting for buyers to stumble upon your brand and start actively pursuing them with precise messaging. These companies may have different audience segments for other targeting efforts. Psychographic data for this specific audience could include worrying about lost resources throughout a supply chain, wanting to eliminate redundancies or being skeptical of flashy new technology. For example, if you’re promoting a B2B SaaS solution, your specific audience may be made up of men and women ages who earn more than $100,000 annually.

The principle of niche marketing is to promote and sell a product or service to a specific, often smaller, and unique section of the market. To successfully position products and services companies must ensure that they know and understand their clients, have analyzed their competitors and are able to effectively communicate the uniqueness of their own brand. Online tools such as Google’s SimilarWeb platform offer ways for companies to track promotional KPIs such as traffic, engagement rate, keyword ranking, and more for any website, including competitors’. As products have real and perceived value, companies need to consider the buying power of organizations with target markets and proceed accordingly. The influence of location is important to consider when building strategies and campaigns to reach prospects effectively as it may contribute to external factors that affect a buying group’s decision-making.

From age and gender to income level and education, companies can use these details to better understand who’s buying from them. Demographic customer segmentation is like separating a bag of jelly beans by color — it's all about categorizing customers based on their characteristics. They included a discount to encourage customers to open the email and make a purchase. Their marketing automation software is trusted by many industries, but the company also runs industry-specific PPC ads, like the one below.

Five techniques of B2B demographic segmentation

With the rise of data-driven marketing and the death of the hard sell, B2B market segmentation is essential to ensuring that sales and marketing campaigns yield positive results. The brand found food and humor influencers who could connect with customers based on location and interests. If you’ve ever explored a big city on foot, you know how different neighborhoods have unique vibes. They’re not always as obvious, and you’ll need to do some digging and truly get to know who your customers are and what they care about. These elements allow you to build emotional connections and show who you are behind the brand. Millennials are a perfect example — some spend their time exploring and mastering the latest technological gadgets while others are busy building million-dollar startups.

• If companies share similar needs, consider pivoting to firmographic segmentation based on business size or industry.
• You’ve got legacy tools and internal policies to think about.
• Among all B2B segmentation methods, needs-based segmentation is often the most accurate for targeting.
• Value-based segmentation categorizes customers based on the total profit they are expected to generate for your business over their entire relationship, known as Customer Lifetime Value (CLV).
• No matter which department your customers are dealing with at any time, they need to get the same engagement and positive, personal messaging.
• But dig deeper and you’ll find that some of your B2B customers share unique characteristics.

Basing your plan on a proven framework and presentation template can accelerate the process, help maintain the proper structure, and offer ideas for designing and organizing various slide types. You need a go-to-market strategy whenever you introduce a product or service into the market. It ensures that your product targets the right customer segments with the right messaging through the right channels at the right time.

Behavioral segmentation

It’s also a good idea to include customer lifetime value in your calculations. Lead scoring assigns value to prospects according to their move from expressing initial interest to revealing purchase intent. Tier-based B2B market segmentation involves categorising prospective customers based on their potential value to the business. You can scrape their website to find out what tools or software a company uses – but this is a little harder to do in this age of the Internet. By analysing technographic data, you can gain insights into the tools, software, and platforms utilised by their target audience.

Slack used behavior-based segmentation to target different segments of the collaboration software market based on their usage and engagement. As a result, HubSpot was able to attract and retain customers across different stages of growth and maturity. They then created different products and pricing plans for each segment, as well as different content and resources to educate them and guide them through their buyer journey. As a result, MetLife was able to reduce its customer acquisition costs by $800 million. For example, they offered discounts and rewards for loyalists, personalized recommendations and testimonials for switchers, educational content and free trials for shoppers, and low-cost plans and guarantees for price-sensitive customers. MetLife used behavioral segmentation to target different segments of the insurance market based on their purchasing behavior.