A word of caution, this topic can be very tricky as there are various schools of thought around what is a segment and how to segment, with Marketing Segmentation being the most well known in business circles. However, for the purposes of this article, I want to focus on an area that is less well known but equally important – Sales Market Segmentation with a particular emphasis on B2B sales.
Getting your sales market segmentation right is critical to getting the right traction fast because having a ‘splat’ strategy (going after everything that moves) in B2B sales is just as bad as trying to reach everyone and anyone in a B2C strategy – everyone ends up ‘spinning their wheels’. As Michael Porter, the grandfather of strategy says ‘Good strategy is what you leave out’.
The most common issue with B2B sales market segmentation
The most common issue we come across is that our B2B clients are using customer personas – the type of individual they want to sell too – as their starting point when it comes to Sales Market Segmentation. This creates confusion in the sales teams as they are told to focus on individuals to sell to when they are actually selling to businesses that usually have a range of individuals within them. Let me explain further.
The area of customer segmentation is tricky for everyone because it has traditionally relied upon traditional B2C marketing. Here is an explanation that hopefully goes some way to helping you and your business get this right for the right reasons.
Traditional marketing and B2C personas
Traditional marketing segmentation is focused on demographics – the social and economic factors of people – and is based on B2C marketing where you have huge groups of people you need to narrow down to get engagement with, usually using advertising strategies as a way to ignite interest – a one-to-many strategy that is much more cost effective. This is why we do individual personas in this space.
Focussing on B2C personas means that defining each persona is relatively uncomplicated as we are dealing with a type of person.
In the 1970/80s, B2C marketing noticed that certain types of people collected around brands i.e. people who drank Budweiser smoked a certain brand of cigarette and liked certain sporting events for example. This is where the sponsorship of events, usually sporting events started to take off. Brands like Nike started sponsoring athletes, and Rebook sponsored events. We can see this now with the likes of Red Bull and many others.
This information added a whole new layer to basic demographics and is super useful in B2C sales and marketing.
Segments and B2B Marketing and Sales
In B2B sales we are still talking to people; however, they are now representing businesses, not necessarily their own interests (as in B2C). It is true that some people will choose specific well-known brands to work with to save face and create a ‘safe bet’ based on the perceived reputation of that company; however, the people are now aiming to work with and make sales with are looking to solve business problems and realise business opportunities. Therefore B2B sales and marketing teams and their clients and prospects have to think about what is in the interest of the company.
We are no longer talking to people who are ‘married with 3 kids and a dog’ we are talking to and engaging with people who are doing business which adds a whole new level of complexity.
We are now talking to a group of people about the positives and negatives of business; looking at ways to improve performance or guard themselves against risks. The stakes are higher for B2B clients because more people are involved.
What we need to do in B2B sales is to have a more narrow approach to sales market segmentation and then to layer that out from there as it relates to different stakeholders.
For example in B2B sales we need to break down markets into specific segments, then into sub and micro segments, then into types of businesses and stakeholders in these businesses. Sales teams need to know the differences here as this can affect who and how they approach different types of clients and thus affect sales productivity and performance outcomes.
This is why B2B sales segmentation takes more time and more work to define. However, once defined sales teams are very clear about who they need to sell to, how and specifically ‘Why us’.
Finally, whatever ‘bell’ we are ringing it must be clear and customer facing, or we risk confusing everyone, buyers and sellers alike and that’s no good for anyone.