Before we jump in, let’s start with the basics. Knowing your customers is one of the fundamentals of successful marketing – business to consumer (B2C), business to business (B2B), etc. Market segmentation is how we take this knowledge and put customers into distinct groups based around what they want and need to develop targeted campaigns and solutions – again this goes for B2C, B2B, etc.
Some might say that B2B market segmentation is an entirely different beast to B2C. B2B is more ‘rational’ and based around the hard facts – industry, company size, customers (or buyers) and product application. While B2C is more ‘emotional’ and based around consumer behaviour – products that make people feel good, safe or enhance their status, to name a few.
But, that’s not true. Effective B2B segmentation must take both ‘rational’ and ‘emotional’ criteria into account to understand the many influencer groups within a corporate customer.
In B2B, there are several decision makers to consider and engage during the sales process – procurement departments, executives, finance managers, etc – it’s different in every business. However what remains the same is each of these influencer groups make buying decisions based around a mix of rational and emotional drivers.
The biggest issue in B2B environments is when the rational argument and the emotional need of the approver do not align and customers then end up in a malaise of buying something that doesn’t fully satisfy either side.
This becomes particularly relevant now that executive positions are moving to Gen Xers and millennials are assuming the role of decision maker at a department or division level. Check out this post from Digital Marketing consultancy Green Hat that looks into the emerging trend of CX (customer experience) becoming a key competitive advantage in B2B, here.
To help you put your B2B strategy hat on, here are my top 5 things to consider:
- B2B buyers are consumers too
Yes, businesses buy products and services that demonstrate ‘rational’ features, which will increase profitability, reduce costs and ideally enhance productivity but they also want to feel good about the purchase and align themselves with a brand that ‘fits’ with their corporate image or values.
- Decision making is more complex in B2B markets
It’s not just up to any one person to buy products and services in a business. If you have a good relationship with one person – you’ve just got started. This is one step (an important one), but you’ll need to build good relationships with one, two or more people to get the sale over the line – and each of these people will have different drivers – cost, efficiency, innovation etc.
- Relationships, relationships, relationships…
When you approach a business, you need to have a clear idea of the benefits and features that will appeal to the many players/decision makers in that business. This could include a sales or buying team, technical or production specialists and financial or accounting managers – or department heads, procurement leads, CEO, legal, etc.
- B2B clients want detail and love industry jargon
Detail and jargon are important because it shows you know the industry and essentially, know what you’re talking about it. B2B clients want as much information as possible about your expertise and how your product and service differentiates itself from your competitors. Consumers largely want to be entertained and want deals, not detail.
- B2B involves longer sales cycles and usually longer contracts
Given all the players and decision makers involved it takes longer to secure a sale with a business however the good news is that generally means the contract is longer-term. A contract tends to last months or possibly even years, so all the legwork is worth it.
B2B market research specialists B2B international have some great videos that go into this topic in more depth, see here.
But, if you’d like to get the ball rolling sooner and get the conversation started with Cuckoo, give us a call. We’ve done a lot of work in this space and can tell you more about how B2B market segmentation can help your business.