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Customer Segmentation in B2B: A Great Marketing Tool for Customer Centricity

11.08.18

In B2B, and even more in industrial sectors, marketing segmentations are often poorly understood – and underutilized. The “PUSH” culture still thrives, usually driven by a product or service, rather than by the customer.

This way of thinking is understandable: B2B purchasing decisions tend to be more rational and technical, and often involve different departments within the purchasing company. In this context, internal teams may not understand that putting market participants’ attitudes and behaviors first will provide significant benefits. In fact, segmentation can bring a lot to industrial and B2B companies, placing the customer back at the center of their strategy.

Why Use Marketing Segmentation in B2B?

Segmenting your prospects and customers will allow you to expand your knowledge of their specific needs. It will also help identify the segments of your business that you can add value to, especially in the context of open and global competition.

Let’s take the example of flat glass, which may elicit very different expectations from a variety of customers. One group looking for windows or façades could be seeking high-performance systems, while another set could want the lowest price, and a third group might be expecting a good balance between price and performance. If so, each of these groups should receive their own marketing answer. For the first group, a premium offer with electrochromic glass and other performance options such as additional acoustic qualities may be offered. For the second, a simple marketing configuration answering basic norms might be appropriate; and for the third, marketing could focus on energy/solar performance and acoustic features, but with fewer options than the first group.

Accordingly, developing a marketing segmentation strategy is a way to encourage your company to raise the following questions:

  • What are the major categories of needs – segments – we can address?
  • What is the business potential and profitability opportunity in each segment?
  • Which segments should we address first, and which ones should we leave to our competitors?
  • What are the key ingredients for success on priority segments?

Segmenting an existing customer base is a good starting point, and will provide an initial understanding of the most interesting variables to factor in. However, it’s important to then expand the understanding to the overall market base by including prospects.

How to Conduct a Good Segmentation in B2B

From a methodological standpoint, B2B segmenting techniques differ little from B2C. The purpose of the work remains the same: identify the most differentiating criteria related to customers’ needs and behaviors. The combinations of these criteria will then define each customer segment. These criteria should be the ones showing the highest heterogeneity between the different customer segments, and simultaneously the greatest homogeneity within each segment.

At Ducker Worldwide, we implement a three-phase process:

  • Observation
  • Modeling
  • Validation

The segmentation process usually starts with an exploratory phase, during which our qualitative interviewers collect insights and develop a preliminary segmentation. Next, a quantitative questionnaire is conducted on sufficiently large samples by phone or online, incorporating questions around attitudes and behaviors. Finally, statisticians perform the data processing and statistical analysis, and identify the most relevant segmentation criteria and segments. Interviewing individuals from a B2B context requires a specific expertise, but when the approach is right, interviewees are happy to share their experiences, concerns and expectations, and find value in the exchange.

To learn how Ducker can support your organization in becoming more customer centric via marketing segmentations, development of persona, customer journey analysis, and other marketing strategies, contact us at:

Ducker North America: info@ducker.com, +1.248.644.0086 or +1.800.929.0086

Ducker Europe: info@duckereurope.com, or +33 1 46 99 59 60

 

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