Segmentation: Streamlining Your Focus to Grow Revenue

By Jamie Montoya, Client Engagement Manager

Most marketers are familiar with the Pareto 80/20 Principle. 80% of your revenue comes from 20% of your business.  It is important B2B marketers understand which leads are lucrative and high priority versus those that are likely to see a lower return on investment.

Segmentation is a great tool to help laser your focus on that magic 20%. It is the process of separating your target audience into groups based on the certain traits or factors. Segmentation helps efficiently use your marketing strategy by hitting those customers who will mostly likely engage with your product or service.

Benefits to Segmentation

• Boosts revenue
• Optimizes the user experience
• Assists with marketing strategy development
• Creates stronger, more impactful marketing messages

Popular Types of Segmentation

1. Firmographic: Firmographic segmentation is the B2B equivalent of demographic segmentation. Firmographics are factual descriptors that separate companies into groups based on industry, location, company size and revenue generated.
2. Technographic: Technographic segmentation profiles target audiences based on their technology stack. What hardware or software is a company using? Do they have tools in place for marketing automation? What about CRM tools? These are important questions to consider if your target market is technological savvy enough to require your service or product.
3. Behavioral: Behavioral segmentation focuses how your target audience uses or behaves with your product or service. How can you reach specific customers when they’re more inclined to buy?
4. Psychographic: Psychographic segmentation divides your target audience by values, pain points and opinions. What problems are your ideal customer trying to solve? What use cases do they value in a product

How to Build an Effective Segmentation Strategy

1. Identify your Ideal Customer Profile (ICP)

Terminus says it best.  “An ideal customer profile (ICP) is a description of the company—not the individual buyer or end user—that is a perfect fit for your solution.” Your ICP takes company firmographic and technographic segmentation as well as employee demographics and builds them into an complete picture of your perfect client. Your ICP should be a thoughtful list of who would be the best fit to do business with you.

2. Create persona profiles

Personas act as a guide that will direct content, format and messages your target audience will most likely consume.  Luckily – there is no wrong answer to what you can include in your persona profiles. The more information you arm your teams with, the better. Check out our recommendations to building great buying personas.

3. Align Your Sales & Marketing Teams

Socialize your ICP and Persona profiles to your sales and marketing teams to ensure alignment of your segmentation strategy. It is important to gain consensus, so each team knows how to effectively target your customers and prospects.

B2B marketing is all about generating relationships with your customers. Segmentation allows your business to deliver purposeful and effective communication to those that are the most likely to engage with your brand. Get a deeper understand of your customer needs and combat the 80/20 rule by focusing your marketing efforts where they will matter most.