Marketing is both a science and art.
It takes a certain amount and quality of skill to effectively communicate your message or solution to your audience. It doesn’t just happen by chance or luck. You need to work on it. You need to be efficient with it to make sure that your marketing spend will go as far as possible.
Many businesses often claim that their product is the best and that it’s for everyone— without hesitation. But if you think about it, even multinational companies adjust their products and services to specific demographics and personality traits in specific places. For example, the international fast-food chain, McDonald’s. In Asian countries like Japan and the Philippines, they offer rice meals. However, in Western countries like the US, they usually don’t.
We may not realise it yet, but segmentation is important. We need to personalise our offering to target the right audience effectively.
Lead segmentation allows you to divide your clients into categories based on criteria like age, geography, and behaviour. Segmenting B2B audiences creates the framework for providing a more personalised customer experience by targeting your audience with solutions tailored to their needs which increases the likelihood of a sale.
When you segment your leads and clients, you can do a lot more than just get closer with them. You can build stronger relationships and help them feel at ease. When clients feel at ease interacting with your brand, sales, loyalty, and long-term engagement also increase dramatically.
Customer segmentation, in its broadest sense, aims to answer the following key questions:
- What are the key customer categories that our company caters to?
- Who are our most lucrative and least profitable clients?
- Which features of our products/services do our customers find most appealing?
- What are the requirements of our customers?
- What can we do to make our products/services more helpful to our customers?
- What can we do to improve our services so that our customers are more satisfied?
- What are the most effective ways to communicate with our customers?
- What is the efficiency of the various sales channels that we employ?
Why is it important to segment customers?
Even the most intelligent marketing strategy may not produce the desired outcomes if you use a one-size-fits-all approach. Your marketing efforts, no matter how successful they are with certain people, may fail with others. Customer segmentation comes into play in this situation. It can provide various benefits for companies if done correctly:
- Differentiate between customers to concentrate on the people who matter more
Talking to your potential (and real) consumers as if they’re all the same is the worst thing you can do. It’s not only inefficient. It can also be a waste of resources. Which customers do you spend the majority of your time with? Which ones should you get back in touch with? Which consumers do you aim to please and go above and beyond for? Which ones are you ignoring and avoiding? Knowing the differences matter. Because it is in differentiating that you can properly allocate your time and effort.
Even without financial resources involved, you don’t want to waste your energy on people who won’t see value in what you have to offer. It’s one thing to use targeted advertising and promotion, but it’s another to tailor your product strategy and corporate philosophy to certain customer demographics. However, either way, you’ll boost your chances of selling and converting your prospects in both circumstances.
- Identify new areas in which to expand
You can’t afford to take any chances when it comes to expanding. It gets tricky and you can be stretching yourself too thin if you don’t research properly. On the other hand, if you know where your customers are ( geographically, demographically and financially), it will be easier to cater to their needs. When you segment your leads, your company will have a better understanding of what your potential customers might be interested in. As a result, new products and services that are relevant to your target audiences will be developed.
- Make your pricing plan more effective.
Finding the sweet spot in pricing is all about striking a balance between profit and value. Prices have an impact on the types of people you attract, how much money they’re willing to pay, and how your product is viewed. Knowing where your consumers stand decreases the risk of making a mistake and gives you an idea of how far you can go before being unreasonable.
- Improve customer service.
Do you want to improve your customer service? Begin segmenting your data. Having carefully designed profiles for each customer you have can give you a wealth of information and context. This helps you to solve issues before they become a problem and make each customer support session unique and valuable.
- Create data-driven decisions with the whole organisation
Marketers aren’t the only ones who can use customer profiling. Data-driven information, including customer input, should be used to inform and make decisions. By allowing everyone in your organisation to have the freedom to make judgments based on the needs of the consumer, you’re making product decisions based on facts rather than assumptions, which results in better business outcomes. Segments provide a solid foundation for you to stand on when it comes to customer data. Even if it has no bearing on your operations or strategy, there will always be a compelling reason to make a change, no matter how minor.
Four distinct forms of segmentation
demographics
Buyers are segmented based on their age, gender, religion, degree of education, and income. Businesses can segment B2B audiences and design items to match different segments of the population through targeted marketing, resulting in increased sales.
location
Geographic segmentation divides customers into groups based on where they live: city, state, country, or continent. You can offer things to them based on what events or seasons are taking place in their immediate location. Furthermore, certain products are more popular in some locations than in others.
psychographics
Individuals are classified into psychographic segments based on their personality, hobbies, aspirations, values, and lifestyles. Because it focuses on individual tastes and attitudes, it is a more realistic way to segment B2B audiences. However, the disadvantage is that if you want to group buyers precisely, you’ll need a lot of data.
behaviour
Behavioural segmentation divides your customers into categories based on their buying habits and behaviours, as well as how they rank their purchases.
How to Segment your B2B Audience
1. Set goals
Segment your customers for a certain reason. Don’t be haphazard about it. Do not do anything simply because everyone else is. You shouldn’t copy what everyone else is doing. Look at your long-term and short-term goals. Focus on your own company and determine how segmenting your customers can help you reach your goals.
2. Sort your customers into categories based on their preferences.
After you’ve stated your reasons for segmenting, it’s time to identify which factors you’ll use to divide your customers. Your objectives and the types of people you want to serve will determine this as well.
3. Identify and reach out to certain customer groups.
You must now select how to best reach your target market after defining your target market. You must create materials that appeal to them and can capture their attention. Email, pop-up messages, descriptive films, and even blog postings could be used. The idea is to focus on pathways that are most suitable for that particular demographic.
4. Examine your consumer segmentation and make any necessary changes.
It’s important to remember that customer segmentation isn’t a one-time event. It’s a continuous process. You need to evaluate it from time to time. Take a step back and look at how segmentation has aided your company’s growth. Ascertain that the new sales generated are due to segmentation rather than any other factor.
Customers themselves can be a source of information via survey forms and questionnaires.
Outcomes of Lead Segmentation
- More effective marketing campaigns
Customer segmentation allows firms to create more targeted marketing messages that are tailored to each segment. Segmenting your customers can increase interest and have a 74% higher click rate on average.
- Improved services
When you have a good understanding of who your customers are and what they expect from your business, you can optimise your products and services better. You’ll be able to match your consumers’ wants and expectations, resulting in increased customer satisfaction.
- Increased revenue
Spend less time, money, and marketing efforts on less profitable customer segments and more time, money, and marketing efforts on a company’s most profitable customer segments. As a result, revenue, profitability, and sales will all increase.
The Key takeaway
There are billions of people on the planet. Each of them has their own likes, personalities, values, and goals. As such, it’s important to understand which category your clients fit into.
Customer segmentation aids businesses in identifying their most valuable customers (how they interact with their product offering) in order to attract more of them. It targets high-rollers, power users, large spenders, and everyone else you can think of!
You’ll be able to deliver targeted messages, route, and escalate requests depending on a certain client group if you have the right profiles in place. It’s helpful, and it will be easier to generate more leads with it.
If you would like to talk further with BoomNow about how we can assist please submit a contact form and we will be in touch.
