Are you feeding authentic insights into your market segmentation strategy?
The ability to build personal relationships with customers through targeted and meaningful interactions lies at the heart of successful B2B marketing and sales.
Today, customers value – and are therefore more likely to trust – businesses that offer them authentic brand experiences that respect their needs, challenges and preferences.
To get this right, marketing and sales teams may need to rethink the way that they approach market segmentation. This practice needs to go beyond simply splitting the market into superficial personas, towards gathering insights that help to build a genuine, multi-dimensional understanding of each customer group.
What about data?
Quality data lays the foundation for an effective segmentation process. However, with such a vast ocean of data available today, how do marketers distil this information into actionable insights?
Advanced technologies, such as artificial intelligence, can certainly play a valuable role here. AI's power to predict consumer behaviour and crunch giant data sets has the potential to help B2B marketers make smarter segmentation decisions. However, research shows that only 10% of B2B marketing executives are currently using AI applications. And while AI adoption may well pick up pace in the future as the technology becomes more accessible and affordable – it’s important to remember that data mined from digital channels (such market trends or digital behaviour of individuals within an organisation, for example) is only part of the greater intelligence gathering effort that is required.
Smart segmentation relies on insights gained from all channels and all areas of marketing. Whether you have sophisticated tools or not, it’s about feeding your strategy with the right data and insight.
The importance of getting segmentation right
Before we go into detail on how to segment your market the smart way, it’s important to understand the immense value that effective market segmentation can offer your business.
Today, many marketers are aware of segmentation and its value. According to an Avention study, 58% of marketers said knowing who to target is important to maximise return on investment.
Here are just five of many good reasons to segment your market well:
- Optimise resources:
Avoid wasting time and money on irrelevant or ill-timed marketing or sales efforts. You’ll also have a solid foundation for realising better ROI on investments such as marketing automation and sales acceleration tools.
- Prioritise high-value prospects, increase sales opportunities:
The market segmentation process enables you to identify high-value prospects and convert these individuals into high-value customers. In other words, you can prioritise prospects with a greater propensity to buy. Being able to focus your resources where they matter most increases your chances of better response rates, sales and enhanced customer lifetime value. And once you’ve clearly defined the profiles of your higher-value customers, you can use this intelligence to source similar prospects.
- Build trust, win more business:
When you’re able to tailor your messaging and approach for each segment, you’re more likely to build rapport and gain customers’ trust – the foundation for successful long-term relationships. Also, better quality engagement is more likely to lead to repeat business and hopefully also referrals.
- A more competitive position in the market:
Deeper engagement provides insight that gives you a competitive edge in the market. It provides information about customer needs that informs product development and helps you differentiate your products.
- Enhance employee satisfaction:
Better quality, more rewarding interactions with clients improves your employee satisfaction, enabling you to retain skills in your business that drive success.
With all the advantages that smart segmentation can offer your business, it’s worth getting this right. And an important first step is to make sure that your data management strategy is aligned with your market segmentation goals.
Data rich – insight poor
Research shows that 76% of marketers are not tapping into the full potential of their data.
Thanks to the availability of data collection technologies, most B2B marketers have no trouble accessing customer data. What really counts, however, is your ability to translate this data into customer intelligence – by pulling out the insights that lie in and between the data points.
Data and insight are two very different things. Without insight, you’ll struggle to gain a clear picture of your market and develop well-rounded customer profiles. In other words: your segmentation decisions will be based more on conjecture than knowledge. Making assumptions or poor judgement calls about customers’ needs, goals, concerns, level of influence or propensity to buy can lay a very shaky foundation for market segmentation. This will lead to wasted resources, customer churn and even reputational damage.
If sales and marketing teams want to create high-quality customer interactions and experiences that feel authentic, they need to understand who their customers are and what they value.
Beyond firmographics to genuine insight
When segmenting your market, you may be tempted to go by industry, company size and other so-called ‘firmographics’. Of course, these factors do need to be considered. But most of the time, you need to drill down much further – and often, this requires real one-to-one conversations.
While technology has a valuable role to play in data gathering and trend-mapping, it is not able to plug all the gaps in your understanding. Qualitative phone-based surveys can incorporate bespoke profiling questions that enable you to gain deeper levels of insight into what really matters for both you and the customer. For example, what is the customer’s view of competitive products, how would they prioritise particular features/benefits, what are the main challenges their industry faces? This intelligence can also guide overall sales and marketing strategy. For example, the survey results could highlight areas of your proposition that are working well – and others that need attention.
Nurturing the human connection
In order to know your prospects well enough to qualify, profile and segment them – you need to establish personal connections with these people. Phone-based research is an ideal way to introduce the human connection that’s so often lacking from technology-driven prospect research processes. Engaging people in real conversations allows you to build rapport, personalise your interactions and unearth the nuggets of information that add life and colour to your data.
Regular voice contact, before and after customers have been segmented, can help you to understand their interests, perceptions, buying modes, working environments, reporting structures and much more. These are the details that help you to create a bank of market intelligence that shapes effective segmentation.
One-to-one contact also helps to lay the groundwork for relationship-building further down the funnel. According to a LinkedIn study on the B2B Buyer’s Journey, the most robust vendor-customer relationships are built on trust and personal connections. Trust (cited by 52%) and personal relationships (cited by 45%) ranked as the top two reasons for buyer-vendor relationships growing stronger, above quality improvements and value for money.
An ongoing discipline
Market segmentation is a long-term process, not a one-off project. It’s also an exercise that other functions across the enterprise can be involved in. Cross-company teams can support – and benefit from – sharing customer insights that are gathered through day-to-day business and customer interactions. This feeds the overall company strategy with valuable market intelligence and also makes sure that resources are aligned around market segments that will be most profitable for the whole business.
When key customer insights are gained – through proactive research, telemarketing or conversations while doing business – it’s important to have mechanisms in place for closed loop feedback between sales and marketing (and other departments if necessary). This keeps data refreshed and ensures everyone is contributing to and accessing a single view of the customer.
A smart market segmentation strategy is built on trusted data and a thorough understanding of your prospects and customers. This enables you to create strong, multi-dimensional personas that can drive:
- Meaningful and well-timed messaging
- Personalised interactions
- Value propositions that resonate
Furthermore, fine-tuning your market segmentation strategy with valuable, actionable insight through human interaction feeds profitability, competitiveness and brand reputation.
In the new GDPR era, brands need to be more authentic and communicate with integrity, in a way that is based on a genuine connection with their customers.
A reputable telemarketing and research team can support your data management and intelligence gathering efforts by building real, human connections with your customers at the same time as ensuring full compliance with the GDPR and any other regulatory requirements. Get in touch to find out how we can help.