Target A Business Market Segment to Improve B2B Marketing
Targeting a business market segment is as important for B2B businesses as for business-to-consumer businesses. But many B2B business owners have no idea about what to look for in a business market segment. They don’t realize that the right business market segment can produce a group of businesses with shared interests and common behaviors that make them good potential customers.
Do you know what firmographics are and how to use them to select the best business market segment for your target market?
Both demographics and firmographics are facts. Firmographics provide facts about businesses that help to group them into target markets, just as demographics enable business-to-consumer businesses to select a consumer target market.
This article covers three broad categories of firmographics that provide numerous ways that you can select a specific business market segment to target. These include:
Using Organizational Firmographics To Select a Business Market Segment
Select a Business Market Segment by Financial Firmographics
Select a Business Market Segment by Industrial Firmographics
Selecting a Business Market Segment With Organizational Firmographics
The first organization firmographic to consider in selecting a business market segment is size. You separate potential business customers into sizes by considering how many employees they hire, how many plants, stores or branches they include at where they are located.
If the business is small with few employees and in only one location, the business owner probably makes most purchasing decisions. If the business is large with many employees and locations, an employee is most likely assigned purchasing. Thus, the size of the business reveals personal demographics that can enhance your B2B marketing and sales.
Age distinguishes businesses in other ways. For example, young businesses need more help in choosing the right products and services for their businesses. They will respond best to marketing directed at helping them to make good decisions, rather than just selling to them. Older businesses are more likely to know what they need, but those needs may require customized products and services.
Location also helps to select the best business market segment because their needs, business cultures, economic influences, regulations and tax laws all differ by location.
Organization firmographics such as size, age and location can help you to separate the best business market segment from all the others so that you can concentrate your marketing efforts on businesses most likley to provide good return on your marketing investments.
Select a Business Market Segment by Financial Firmographics
Financial firmographics include sales volume, profits and market share. They can help the B2B business owner to distinguish businesses by whether or not they have the financial means to buy a product or service. Financial firmographics also identify a business market segment that’s sales volume demands more automated products.
For instance, if you sell an accounting system capable of handling thousands of transactions a day, a business with small sales volume is not in your target market because a simple, readily available, accounting program will handle its needs.
Ownership factors can also help you select the business market segment for your target market. You need to know whether the business leases or owns its office, plants, stores, warehouses, and equipment. By monitoring the relationship of ownership factors, you can determine relationships between these factors and the businesses needs and purchases.
B2B business owners can determine which businesses are most likely to purchase their products or service by knowing how financial firmographics influence purchasing decisions.
Using Industrial Firmographics To Select a Business Market Segment
Selecting a business market segment by industrial firmographics requires understanding different industries’ regulations, standards, inspections and expectations. These industrial differences cause businesses in one industry to want and need different types of products and services than a business in another industry. Selecting an industry where firmographics create a market for what you sell helps to pick your best target market.
The following example illustrates how industrial firmographics influence what businesses need and want and what kinds of customers they will be.
For example, a high-tech manufacturer uses different equipment, different components and supplies than a low-tech manufacturer.
A business that produces high-end items for the luxury market will use different components than one that produces in mass for discount stores. The former will spend more for quality components and buy add-ons to upgrade features.
Similarly, consultants and books publishers are both in the information business, but they have different needs and their income base is different. Book publishers earn based on the number of books they sell and how the price those books. Publishers basically sell an information product. On the other hand, consultants sell an information service and their incomes are limited to how much they earn per hour.
So knowing industrial firmographics of businesses, helps you to select those with industry characteristics that make them good potential customers.
Conclusions
You can improve your marketing and sales by gathering as much information as possible about each business market segment, and relating each to your past sales.
Your ability to select the best target market for what you sell is enhanced by good record keeping and research. Good records help you to recognize which business market segment provides the best customers within each type of firmographic.
With such records, and an understanding of different firmographics, you can select your target market from the most profitable business market segment.