Glossary of B2B Marketing Segmentation


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Thursday, August 26, 2021

B2B segmentation forms the foundation of marketing success. But the wrong approach can limit the scopes of your programs, causing poor conversion rates. To help you succeed, there are some key terms, concepts and acronyms you need to think about.

Article 6 Minutes
Glossary of B2B Marketing Segmentation

B2B Marketing Segmentation has become a pivotal tool for modern marketers, with over half (51%) of senior B2B marketers saying they struggle to obtain the right data to accurately segment their audience. A further 39% find not knowing which accounts to target a key frustration. This is according to our own research conducted among senior B2B marketing professionals in the Insights for Professionals community. Their first party findings, along with other industry insights, allow us to provide the know-how to approach B2B segmentation successfully.

Why is segmenting your audience so important?

Not having the right approach can result in:

  • Poor conversion rates
  • Low ROI
  • Missed opportunities

The "right data" is not only the right accounts, but the right approach in achieving results against that target segment. This is according to our report The Holy Grail of B2B Marketing Segmentation, full of first party insights exploring how businesses worldwide are approaching segmentation in their B2B marketing strategies.

How does B2B segmentation work?

Segmenting your audience is critical for the drive in ROI and enhanced target account list (TAL) it can produce. Obtaining the right data to accurately segment your target audience is key.

B2B marketers can develop their TALs to include more of the best fit accounts from their ideal customer profile (ICP). Using sophisticated digital technologies through AI and natural language processing (NLP), they are then able to identify their true total addressable market (TAM) specific to their brand.

Additionally, developing the approach to the decision-making unit (DMU) can see a significant increase in ROI, driving deeper segmentation and connections around authority level and position in the marketing funnel.

Leveraging B2B marketing segmentation to enhance performance

Micro segmentation should be at the heart of successful ABM; a strategy which targets key accounts individually and holds personalization at its core. 88% of senior B2B marketing professionals see an improvement in conversion rates when using ABM, while 99% of marketers agree that customer relationships are advanced by personalization.

This means that the requirement for an accurate micro understanding of target audience segments has gained prominence; one-size-fits-all messaging is simply unlikely to succeed. Supported by new digital technology, the ability for marketers to personalize at scale is now easier, quicker and more reliable than ever.

The future of the DMU

73% of millennials aged 20-35 are now involved in product or service purchase decisions for businesses. 75% of the global workforce is predicted to be made up of millennials by 2025. The workforce is changing and so are B2B buyer expectations. 81% of B2B buyers now expect a personalized online buying experience. The modern DMU and buying process is continuously evolving, thus creating accurate buyer personas is key to ensuring you are leveraging user insight and behavior to elevate your targeting efforts.

To help you master the world of B2B segmentation, here are some of the common key terms, concepts and acronyms that you’ll no doubt come across when integrating the approach into your B2B marketing strategy…

Audience Segmentation – a process of identifying subgroups within a target audience and dividing people based on defined criteria such as age, demographics and media use. Digital marketers segment audiences to deliver more tailored messaging for stronger connections – a key part of a targeted marketing strategy.

Behavioral Segmentation – based on patterns of behavior displayed by individuals as they interact with a company or brand, or make a buying decision i.e. whether they’re subscribed, submitting a form, visiting webpages and so on.

Benefit Segmentation – dividing a market into groups or segments based on the particular product benefit sought by each group. This is done based on the perceived values or benefits to the end customer.

Decision Making Unit (DMU) – a collection of all individuals who play a role in the buyer decision process. There are a number of key players; the user, initiator, influencer, decision maker, buyer. The marketing mix must address the needs of each and find suitable ways to communicate the marketing messages to each of them.

Demographic Segmentation – a market segmentation technique based on variables such as age, gender and income. It groups buyers together by focusing on these common traits for marketing activities to be aimed at.

DMU Personas – role profiles created for the purpose of replicating each type of buyer, to build accurate buyer views that can best inform your content strategy and help construct a customer-centric view.

Firmographic Segmentation – the process of analyzing B2B audiences and classifying them based on shared organizational characteristics such as industry, location, company size and performance. This can help guide marketing activity by providing enhanced business insights, leading to more effective targeting campaigns.

Geographic Segmentation – dividing your audience based on the region they work or live. This could be country, region, city or even postal code when real specifics are needed.

Ideal Customer Profile (ICP) – a view of the perfect or ‘ideal’ customer that your business aims to target. This is a fictional organization that possesses all of the qualities needed to make them a best fit for the offerings your company provides. An ICP is very useful for those leveraging ABM for how it allows focus on the most highly suited accounts.

Lookalikes (LAL) – this form of targeting focuses on audiences with similar demographics i.e. age, gender and location, and interests to those of your existing audience. This helps to reach and identify high-quality accounts who look and act like your target audiences.

Macro Segmentation – classifying the market based on high level customer data such as location, and language. This type of segmentation allows greater learning about communication requirements and culture and is always broader in scope than micro segmentation.

Market Segmentation – splitting your audience into unique target segments by identifying common characteristics, needs and behaviors. This allows more focused campaigns for a stronger connection with customers and potential buyers.

Micro Segmentation – focuses on customer specific data such as history with the brand, preferred products and time since last purchase. This approach looks to target a small customer base to identify high-potential audiences for specific products.

Psychographic Segmentation – a market segmentation approach which divides consumers into groups based on shared psychological traits such as subconscious or conscious beliefs, motivations and priorities. It focuses on how people think as well as consumption habits drawn from lifestyle and preferences, to explain and predict consumer behavior.

Target Account List (TAL) – a list of accounts you want your sales and marketing teams to focus their efforts on. These best fit accounts will have the highest revenue potential for your business and will often reflect your ICP.

Total Addressable Market (TAM) – the maximum revenue possible to a business from selling their product or service offering in a specific market, as if 100% market share was achieved. It helps understand the potential of an opportunity, for efforts to be prioritized accordingly.

Final thoughts

B2B marketing segmentation is only growing in uptake, and it’s clear to see why. With 64% of B2B marketers struggling to action on insights gathered from intent data, the need for understanding the best fit accounts and targeting those with the highest potential is evident.

91% of B2B marketers leverage content marketing to achieve their demand generation initiatives, while 88% aim to increase the amount of content they produce in 2021. It is only too apparent that content marketing strategies remain top of the agenda to ensure both the right quantity and quality of content is produced, to reach the right people at the right stages of the buyer’s journey. Consumers simply expect relevant content to be available on their preferred channels, and segmentation is key to achieving this.

Inbox Insight

Inbox Insight promote the best B2B content marketing practices enhanced by a data-driven approach. We believe putting audience insights at the heart of every digital campaign, drives superior experiences for both our business communities and clients.

It’s about continuously leveraging audience intelligence to understand what they want to hear, and translating this into thoughtful demand generation campaigns that resonate with decision makers across the full buyer journey.


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