Adopting an Anticipate, React, Adapt B2B Strategy
Targeting B2B Customers into Relevant Groups
| Check out the remaining segments of this six-part series |
|---|
| Part 1: Setting or Following Construction Trends to Build Your Business |
| Part 2: Cutting the B2B Gordian Knot |
| Part 3: Adopting an Anticipate, React, Adapt B2B Strategy |
| Part 4: Et Tu Trends? |
| Part 5: “Other” Factors Influencing What You Think Increases Sales |
| Part 6: “Other” Factors Influencing What You Think Decreases Sales. |
Alexander the great (besides cutting the Gordian Knot) was a master of strategy. He followed three principles: anticipate, react and adapt. This strategy can be followed for segmenting your customers into relevant groups as a result of the fragmentation going on around us.
Below are some key approaches to group and target your diverse customers:
By Behavior.
Segmenting customers based on their behaviors, such as purchasing patterns, digital engagement, and loyalty is an effect way to shape your communications. For example, you can implement and use analytics to track customer interactions across multiple channels, identifying patterns such as frequency of purchases, average order size, and engagement levels with content (e.g., webinars, white papers).
One company uses reverse IP lookup to understand how engineers interact with their website. They can capture the “journey” of the visit based on their company’s IP address, and then going to the visitor’s website, make a fairly accurate estimate on “who” is downloading the specification. Cross tabulating with another database, the company can identify the exact project that the engineer is seeking their products for in the specification. The result is arming the sales representative with powerful information so that when he makes the sales call, he treats the engineer as a VIP (see earlier discussion).
Website behavior is only one example of targeting relevant customers on behavior (in this case, digital behavior). Besides, segmenting customers who regularly engage in digital content but have long sales cycles also provides valuable feedback on “how often” that firm is engaging with the websites. Remember, long-sales cycles are vastly different from those who rely on direct sales calls and shorter decision timelines.
By Firm Demographics.
Another method for dividing customers into relevant groups is to segment based on firm characteristics such as company size, industry, revenue, and location. This is a more traditional way of approaching your customer file, but is nevertheless very relevant, as big companies act differently than little companies.
In fact, if you examine your customer file, it probably follows the 80/20 rule not only in sales, but in these types of demographics (that is, 80% are small to medium size and only 20% are larger). Besides, grouping small and medium enterprises (SMEs) separately from large corporations makes sense as their procurement processes, budget priorities, and product needs are significantly different. Relevant strategy means deciding if you sell to a group or individual. This blog — Should I Sell to a Group or an Individual? – contains an excellent discussion (and actually is served up by Google if you ask, “should you sell to a group or individual” as the number one link (after their AI answer of course!).
To do this, you will need to collect and analyze data on target companies’ demographics using CRM systems, third-party databases, or direct research. Many B2B companies face an almost insurmountable problem: diverse systems that don’t talk to each other (i.e., accounting doesn’t talk to billing which doesn’t talk to marketing). The way to solve this problem is to integrate these databases using Middleware, or if that is cost prohibitive, decide on systems like Salesforce, Apptivo, Sugar or others you can find listed as “best CRM software” on various websites.
By Needs.
Segmenting customers based on their specific needs, challenges, or pain points is yet another way to approach your strategy and determining which if any trends you should consider. This falls in line with what you know about value chain participants in our prior discussion (i.e., contractors have different pain points than architects).
One of the most important ways to achieve such segmentation is to conduct customer interviews, surveys, and data analysis on the results to understand the unique needs of different groups. You may think you know them, and your sales people may think they know them, but third-party verification often exposes gaps in understanding.
For example, one client believed his product was “totally understood” by his target market: airports. The product, a monitor for water, connected directly to the building automated control system. In our research it became immediately clear that airport managers (the target) were unable to “see” the benefit of monitoring water usage. Even if we embarked on explanations of water savings, run-on notification, etc. can benefit the facility, the targets simply didn’t see the monetary advantage such knowledge would mean to them.
This was because water was not a critical event in their opinions. It’s a “nice to have” rather than a “must have” technology as far as monitoring it was concerned. And like all technology, it has to be used before it is accepted as “normal” or with a clear benefit that’s easy to understand. The result of the research enabled our client to prepare a complete “education” program for this targeted group.
You can proceed by mapping out pain points related to operational efficiency, regulatory compliance, technology integration, or supply chain resilience to your targeted groups, and then look for commonalities across the audiences. It might be as simple as repeated exposures through marketing for the “break-through” moment.
By Persona.
This type of segmentation is interesting because it forces us to create detailed profiles of different buyer personas within a target group, such as decision-makers, influencers, and end-users. And while generalizations are sometimes dangerous, creating personas gives you clues on how to narrow your focus when you talk to the people.
Personas can be developed on a variety of people types, including job roles, responsibilities, motivations, and pain points. You should consider factors like seniority, department, and influence on the purchasing process sometimes as well.
For example, “consumers” is a wide segment and trying to build one persona for a “consumer” impossible. However, within “consumers” are demographics such as income levels, age, etc. “Architects” is just as wide a segment as consumers, but within “architects” are filters such as commercial, residential, specializing in education, or data centers.
One client wanted to know if his product (anti-dandruff chemically enhanced shampoo for beards) would be used by bearded men? 97% of men with beards said yes they would in our research. But more important, it didn’t matter what level of income the respondent was at; men from $50K to $200K per year would use it. Without drawing up personas and breaking down by income level ahead of time, this finding would have totally missed the mark.
By Lifecycle Stage.
Segmenting customers based on lifecycle stage for your company, from awareness to decision and post-purchase, is still another way to slice your data. In B2B, “lifecycle” may mean the product’s lifecycle, not the targets’. For example, the installed based of any product is probably quite large, and there will be a mean-time-between-failure rate. Calculating such rates on the product’s lifecycle can mean sales opportunities.
For example, one client using reverse IP lookup noticed someone from a large campus of a major pharma company with many buildings visited their website and took one specific PDF file for a one product – nothing else. The product – a Concealed Vertical Rod Exit Device for a glass door – was probably one of many that the company had on their campus of buildings with many, many doors. The client held a sales meeting and we suggested contacting the VP of maintenance and to conduct a “door audit.” The audit would be comprised of going through all the facilities, documenting doors, their hardware, etc., and the producing a report. When the client asked what they could charge for that much less if the company would allow it, we replied: “Charge nothing.” The client was in disbelief, until we told them the strategy: Knowing when the products were installed, and doing a mean-time-between-failure study to anticipate replacement will intrigue the VP of maintenance, whom we had found on LinkedIn. Besides the “someone” who looked up that piece of information on a Saturday night wasn’t the VP, but someone who WORKED for the VP. There is no other possibility. So when the audit is finished, we told our client to simply present the audit which documents how often and when each component had to be changed to prevent failure. The company would then ask about the other hardware on doors not fitted with our client’s hardware. We told our client to say, “We’d be happy to replace them, but we don’t have that information.”
I’d like to say that our client got the deal and ended up replacing all of the door hardware, but that didn’t happen. Our client (no longer out client) didn’t pursue the solution because it was out of his “sweet spot,” which was simply selling through distribution.
Often lifecycle analysis reveals such opportunities, and as the saying goes, “He who hesitates is lost.”
By using behavioral, firmographic, needs-based, and other segmentation methods, businesses can effectively target fragmented customers, ensuring that their marketing, sales, and service efforts are relevant and resonate with diverse audiences.
We would be happy to help you. Contact us, or read Part 4 in this series: Et Tu Trends? that discusses now that you have your market segments lined up, your strategies in place, what’s next? And if you’d like a convenient pdf of the entire series, email inquiries@a-i-m.com. Thanks for reading!