B2B Audience Segmentation Strategies that Work

As companies develop buyer-centric communication, one of most important questions is – how do we effectively group buyers into segments? We perceive that somewhere between the one-size-fits-all dinosaur and the unicorn-like “market of one” exist segmentation strategies that work better than others. But which ones? The secret is discovering self-identifying groups.

 
Great segments are built around groups that have naturally formed and are already connected.
 
For B2B marketers, the most effective audience segmentation strategies are vertical industry (e.g. hospitals, banks, retail), job function (e.g. CFO, head of HR, VP of Analytics), and geography (e.g. location, language, culture). In some cases, communities of interest can also be valuable. Communities of interest evolve around passions and may exist only online.  Examples of communities of interest relevant to B2B marketers may include those interested in security or privacy or a tech company’s installed base. These attributes are ones that buyers will not only easily recognize about themselves but tend to be the stimulus for group formation.
 
Using self-identified groups as a primary segmentation strategy has two huge benefits.
  • Content will be more relevant and can be leveraged and streamlined. Self-identifying groups such as the ones described above respond to the same value propositions. They tend to have similar opportunities and/or problems. They will have similar compelling reasons to buy and are served by similar solutions. They tend to have similar business models, organizational structures, and environmental conditions. They share a common vocabulary. They ponder the same questions. They read the same editorial. They understand the same stories; respond to the same examples and analogies. They react to the same warnings. You can create highly relevant, effective, content and sales messages for these groups and that content will work hard.

  • The social network will market and sell for you. People with the attributes described above (vertical industry, job function, geography, communities of interest) are connected in social networks.  They go the same trade shows and recruit each others’ executives. They respect the same experts and analysts and use the same suppliers. Social media has revealed to the world what we all know from our own buying experience – people rarely make big decisions by themselves. We seek help and advice from those we trust. We look for stories about how “people like me who have had this problem” have succeeded or failed. We collaborate with like-minded adventurers to try something new.  Imagine your message as a small marble. Throw your marble onto a Kansas wheat field.  Throw another. What are the chances that those two marbles will hit each other? Now imagine throwing your marbles into a shoe box. They bounce into one another with the slightest jolt.  Already connected groups create an echo chamber that can dramatically extend your own outreach effort
 

Consider company size, buying role, and risk profile as secondary audience segmentation strategies.

 
  • Buying role and risk profiles are very useful but used alone are insufficient. Within the overarching audience segmentation strategy, you may want to create sub-segments such as different kinds of buyers and influencers (e.g. financial buyer, technical buyer, decision-maker, researcher, or advisor) or risk profiles (e.g. early adopter, majority, conservative).  Content will be less relevant and you will get virtually no support from the social network. Both of these segmentation strategies are helpful. Buying role helps identify the different objectives and questions that must be answered by content. Risk profile is useful for content tone.  For Early adopters tend to respond well to opportunity-oriented messages (“look how great you can be!”) whereas conservative companies tend to respond well to risk-avoidance messages (“look how much pain you won’t feel!”). However, unless you are a very large company with brand dominance and a horizontal solution, these strategies are less effective by themselves for winning new business than those described above.

  • Company-size segments help sales but not marketing. Dividing buyers into tiers defined by company size such as enterprise accounts or small and medium sized business (SMB) may be a useful strategy for some business decisions. It informs sales management tasks such as territory definition, quota setting, and sales methodology selection. Company size is also useful for pricing strategies. However, Wal-Mart and GE have little in common other than size and complexity. However, company size provides almost no support for audience messaging.
 

For B2B audience segmentation strategies, your ideal group is the triple crown of vertical, functional role, and geography, or in some cases, communities of interest.  Your particular situation may have some unique requirements.  However, whatever segmentation approach you consider, make sure it passes the litmus test – self-identify as a group that experience similar problems and shares a social network.

The Smartest Marketers Don’t Want Straight “A’s”

If tech marketers as a group were to be identified as a persona, one of our attributes would be “over-achiever”.  While in school, we strove mightily to get A’s, win awards, be the champions.  Our drive to be the best is our great strength.  But its over-application can also be a great weakness.

Under today’s conditions getting straight A’s is impossible.
 Tech marketing has never been the kind of job you can leave at the office at 5:00 (and who leaves at 5:00 anyway?). On the positive side, you get to work on the exhilarating cutting edge, with fascinating problems to solve, with smart, interesting, people all over the world. But the C-Suite and sales people are never satisfied. Results from our work are often ambiguous. You learn to just accept that your work will never be done. 

However in recent years, that persistent mania has kicked up a notch. To the day-to-day, add the time it takes transforming marketing to the self-educated buyer and the digital world.  Add the pressure of doing more with less budget (IDC’s Tech Marketing Benchmark shows that marketing budgets have never really recovered from the 2008 bust).

Let’s face it, as human beings we have limits.  With so many demands, you physically do not have time, energy, or attention to get “A’s in everything. This is not school. Attempting straight “A’s” in real life gets you mediocrity and failure.

I’m here to tell you that it is okay to get a “C” sometimes. It’s not only okay – it’s better
The secret is to deliberately choose when to get a “C”.  Here’s a little tool to help you decide where getting a “C” is okay.  I adapted this decision tool by flagrantly stealing from Stephen R. Covey’s Seven Habits of Highly Effective People (Habit 3: Put First Things First) and Geoffrey Moore’s model on core and context from Dealing with Darwin.  A decision grid like this lets you compare tasks by considering their relative risks and rewards.

Quadrant 1: High Risk, High Reward – Focus your “A” efforts here. Now.
You decide what really makes a difference (to your customers? To your revenue? To your career? To your family? To your happiness?)

Quadrant 2: High Risk, Low Reward – Settle for a “C”.
 You can’t avoid these tasks without penalty but there is no upside for being exceptional – so why put in the extra effort?  I put admins-trivia in this category and I’m sure you will find other things (wink).

Quadrant 3: Low Risk, High Reward – Focus your “A” effort, but you can take more time.
I call this category of things “the gifts to your future self”.  Life will keep getting better if you put at least a little time into these things.

Quadrant 4: Low Risk, Low Reward – Why put any effort into these things?
We all have some dumb tasks on our plate. Here’s the litmus test.  Pick a task you find tiresome. Stop doing it for a couple months and see if anyone screams.

We are all human. We must make choices about how best to spend our limited time, energy, and attention. If you don’t make those choices strategically, then you risk failing at the important things.  You’ll get best results if you give up the school-kid attitude of feeling like you have to be great at everything. Get a few “C’s” and you will be more successful.

The Secret to Marketing to the Line-of-Business Executive

Many technology companies have directed their marketing and sales teams to look for business beyond the traditional IT customer.  The secret to marketing to the line-of-business executive is to think like they do. Huh? Is this a secret?

Imagine you have a cute little terrier that you love dearly but who chews up everything in sight.  You fear that you will have to give the dog away if he keeps wrecking things.  As a super-busy person you rarely have time to read articles, however, one of the articles below will stop you in your tracks. Which one?
       a) Animals around Our Home
       b) Dogs: What do they do every day?
       c) Why We Love Terriers
       d) How to Stop Terriers from Destroying Your Home

You know that the answer is D.  And if each of the authors had a dog training business, which one are you most likely to contact?

Everyone gravitates toward things that they believe are made “just for me” and ignores things that are made for “someone else”.  It doesn’t matter if you are trying to get the attention of the Chief Marketing Officer, the Vice President of Human Resources, the head of pediatric medicine, or a  terrier owner. The more completely you enter to your customer’s world, the more likely you are to be successful with them.

Do the Work
It’s a matter of simple economics.  As the busy owner of the errant terrier, you do not want to waste your precious time reading articles that are of marginal value (Animals around Our Home?).  Nor are you willing to do the heavy cognitive lifting needed to mine a useful nugget from a broader purpose article (Why We Love Terriers?). 

If you want to attract and serve the line-of-business customer, then YOU (or at least someone in your company) must do the heavy cognitive lifting learning about your customer’s world. YOU must spend your precious time (and money) to customize your offerings and messaging for them.  There is simply no other way.  Someone has to build the cognitive bridge between your world and your customer’s. Your customer will not do it – so that leaves only you.

Avoid the “Vertical Slap”
Line-of-business customers will feel annoyed and betrayed if you evade the work of customization by using a technique that I call the “vertical slap”. The “vertical slap” gets its name for the unfortunate practice of slapping a picture of a nurse on a regular, old, horizontal, campaign and claiming that you market to the healthcare vertical. 

Don’t be superficial. Do the work. At least one person on the campaign team has to bring direct experience in the line-of-business focus area. Alternatively, at least one person has to acquire this deep knowledge. (HINT: in addition to understanding the line-of-business, you may also need to invest in understanding the differences between the worlds of different executive levels – for example, a CMO thinks differently than a Director for Marketing).

Don’t be cheap. Spend the time and the money. You can either pay up front for customizing content and offerings – or you can pay down the line with low conversion rates.

Actually, the secret to marketing to the line-of-business executive is not a secret. It just takes work.