Everything You Need To Know About B2B Market Segmentation

Everything You Need To Know About B2B Market Segmentation | Data Marketers Group

We all are in the era of 21st century where our requirements keep on growing & reflect the consumer markets & sales professionals. We must accept B2B landscape is continuously evolving over the time & it is important for the B2B marketers to adapt to the customer centric market any day. This could be achieved by Market Segmentation.

In earlier days, B2B marketers faced a lot of struggle in finding reliable target information about prospects & most importantly it was not freely available. But today, with comprehensive B2B database you can access detailed information, deliver personalized messages & plan B2B campaigns. Customer centric digital market is available to develop a buyer’s journey effective & engaging.             

“Market Segmentation is a natural result of the vast difference among the people.”- Donald A Norman

What is Market Segmentation?

What Is Market Segmentation | Data Marketers Group

Market segmentation is one of the strategies which involve the process of dividing your data into further sub groups based on shared characteristics, traits, facts or actions. In simple when you get a right customer, you show them content that they are excited about it. Here sub groups are classified based on the insights & highly focused on delivering personalized experience for prospects.

Why B2B Market Segmentation is important?

Without proper b2b market segmentation you’re missing the potential clients who should be given first priority. Here are the benefits of market segmentation:

Significance Of Marketing Segmentation | Data Marketers Group
  • Improves Overall Business Focus
  • Boosts Revenue
  • Helps To Achieve Annual Marketing Goals
  • Nurtures Product Development
  • Improves Campaign Performance
  • Expands Your Market Reach
  • Improves Brand Identity
  • Identifying New Market Streams
  • Understanding Current Customers

So here comes the big question what are types of Market Segmentation?

Below mentioned are widely used marketing segmentation which is accepted by huge audience base as well.

Type of Marketing Segmentation | Data Marketers Group
  • Demographic Segmentation
  • Firmographic Segmentation
  • Geographic Segmentation
  • Behavioural Segmentation
  • Psychographic Segmentation
  • Need based segmentation
  • Transactional Based Segmentation

Demographic Segmentation:

Demographic segmentation is the first & foremost step in creating customer profiles that helps marketers toproject top most products & close deals effectively. It is the process of dividing your market into a segment, based on factors like ethnicity, age, gender, income, religion, education & more as shown in the below figure. This is highly useful is targeting people who are likely to care about your products & services. And more importantly, brands can spend their advertising & market budget friendly.

Demographic Segmentation | Data Marketers Group

There are multiple demographic segmentation factors that can be picked as per the type of customers you have.

Ex A fashion brand would care about people gender & age, while a software company care about profit & income.

Demographic segmentation can be put to best use when your products or services are developed for different type’s market & itsatisfies the growing needs of the changing customers.

Benefits of Demographic Segmentation:

  • Better understanding of target audience
  • To group audience based on key factors
  • Business can determine the area to expand its functionality

Types of data used to determined demographic segmentation:

  • Age
  • Gender
  • Income
  • Education
  • Geography
  • Marital Status
  • Religion
  • Experience
  • And more

Firmographic Segmentation:

Firmographic Segmentation | Data Marketers Group

Based on the shared company attributes business to business customers can be classified and it is often referred as Firmographic segmentation. Such prospects have same organizational attributes. They are generally used to guide marketing, advertising, & sales for deeper insights & effective campaign management activities.

There are key variable that constitutes to the Firmographic segmentation, they are

  • Industry
  • Location
  • Company size
  • Status
  • Performance
  • Executive Title
  • Sales cycle stage

Key Benefits:

  • Enhancing Sales & Marketing Efficiency
  • Improve the revenue with larger base
  • Campaign optimization with priority leads
  • Reveal actual business insights
  • Boost Marketing ROI

Geographic Segmentation:

Geographic Segmentation | Data Marketers Group

If business divides the market on the basis of their location or geography, then it is referred as geographic segmentation. In simple, when you have a broad range of target audience & they are targeted based on the area where they are located you can call it as geographic segmentation.

For ex: A Hot beverages goes well in cold regions or countries that highly prone snowfall for the most the years.

Key factors used to determine the geographic segmentation:

  • Continent
  • County
  • Region
  • City
  • District
  • SIC/NAICS Code

Psychographic Segmentation:

If a market segment divides customer based on psychological characteristic which includes conscious & subconscious beliefs, motivation, personality traits, predicted behaviour of customer then we can call it as Psychographic segmentation. This helps marketers to empower & understand more about unarticulated needs & expectation of the customer or prospect. This segmentation builds relationship with customers by understanding them more of individual with personal values.

Psychographic Segmentation | Data Marketers Group

Behavioral Segmentation:

Though Firmographic & psychographic segmentation is highly focused on customer, based on their behaviour you can segment prospect on how they react. For example, you can track the details of what they purchased, timing, customer loyalty, engagement, satisfaction & more as shown in the below figure. Based on B2B campaign, prospects can be segmented how they react.

Behavioral Segmentation | Data Marketers Group

Benefits of using Behaviour segmentation:

  • Improves targeting efficiency
  • Gives better personalized experience
  • Able to shift focus from uninterested to interested prospects
  • Able to track insights
  • Helps to build brand loyalty

Need Based Segmentation:

Need Based Segmentation | Data Marketers Group

When you want to address particular group of people & their request, then it can be classified as Needs based segmentation. Customer sophistication is one the key factor that groups your audience base. So this this provides opportunities to tailor your audience needs with specific goal instead of splitting customers based on Firmographic or demographic information. This segmentation must have clean & enriched data as they can be approached as and when required.

Need based segmentation can be done in four categories which includes functional needs, problem solving needs & emotional needs. It is highly useful for tailoring your upcoming needs & support for new business initiation & product developments. This model works pretty well & helps to target different sets of prospects. And more importantly as current B2B prefers need based segments than others.

Transactional Based Segmentation

Transactional Based Segmentation | Data Marketers Group

This is highly useful to study about a customer based on their past transactions. Here organization or customer should spend time in analyzing patterns& group them based on business goals. This mainly used for strategizing planning, prioritizing marketing activity, forecast sales & returns.

Segmenting by decision maker Type & their Organization:

If you are highly focused towards messaging & communication strategy, then opting for segmentation by decision maker type is highly recommended. As a B2B marketer your communication must start with individuals at organization. This is the main reason why sales & marketing team tend to focus on individual level data. This gives a crystal clear idea of how easily you can network with executive professionals.

How to segment & what are best practices available?

When it comes to segmentation there are few basic principles & best practices that need to be carried out.

  • Flexibility is the first & foremost feature to adapt the changing needs as customer base grows.
  • As the market segment is developed, internal stockholder must be ready to accept the change & feel good as a part of migration.
  • Make good use of existing data as they are considered to primary source even there may be a future plan to conduct quantitative & qualitative surveys.
  • Segmentation is not about customers, even leads & prospects can be segmented under the market they fall. Later this can be used to roll out niche based campaigns.
  • With the right mix of quantitative & qualitative research, deep understanding of customer needs can be figured out with robust validation.


With the growing competition in B2B market, it is important for business to remember not all prospects & customer in your database are equal. Segmentation helps to shift focus from low performing areas to high performing areas with right statistics & details to improve revenue stream which is crucial for business. Hence, your B2B marketing should be planned with a clear strategy that completely depends on your business objectives & industry you’re residing & industry you want to explore. Always market segmentation keeps you ahead of your competitors in collaborating with customer in the ever changing market.

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