Richard Kellett, marketing director at SAS UK, explains how B2B marketers can use segmentation to boost campaign effectiveness
It’s easy to rely on demographics when making decisions about customer segmentation. But for B2B marketers this is dangerous territory. Businesses have different buying motivations and behaviours compared with consumers, making segmentation strategies evermore challenging.
Successful B2B marketers use analytics to gain deep insight into how various customers behave and buy, enabling them to create much more effective segmentation strategies with the potential to transform the bottom line.
I attended an event recently that discussed the role of segmentation for B2B marketers. One of the speakers, from a large alcohol conglomerate, discussed how the company re-designed its marketing strategy to specifically address what motivates different channels to market. What struck me most was the difference that the introduction of B2B segmentation made to that organisation’s sales.
Categorising its B2B customers by distributors, bars, restaurants, local retailers and supermarkets makes a lot of sense since each group is motivated by very different attributes. Using SAS analytics the company was able to quickly categorise its customers and spot new trends and patterns. For example, the project revealed that supermarkets are most interested in large volume discounts compared with local independent retailers who are mostly concerned with educating their children.
Offering promotional large volume discounts to the larger retailers and setting up university scholarship programmes for independent shops had an immediate positive impact on sales. Re-focusing on segmenting by groups with similar interests and attributes, rather than simply by geography, enabled the company to gain immense customer insight to really understand what motivates each group.
For B2B marketers there are a number of key factors to consider when it comes to segmenting customers including:
· Do different groups of customers exhibit different behaviour and consumption patterns?
· Do they have different preferences, and buying motivations?
· Do they have different attitudes?
· How much do they spend, do they have different contract requirements?
Looking at these questions will help enable marketers to identify relevant segments that can be used to better shape communication and marketing strategies. Crucially it will help identify the most profitable segments where work can start straight away.
Often B2B marketers forget that customers are after all people too and are susceptible to certain patterns in behaviours and motivations just like consumers. Pinpointing what those behaviours, motivations and needs are and categorising customers accordingly as well as by how much they spend, or could spend, can help B2B marketers to discover new opportunities and develop effective techniques for realising the potential of good customer segmentation.
By Richard Kellett