Improve Your B2B Marketing by Targeting A Business Market Segment

Targeting a business market segment is as important for B2B businesses as for business-to-consumer businesses. But many B2B business owners have no idea about what to look for in a business market segment. They don't realize that the right business market segment can produce a group of businesses with shared interests and common behaviors that make them good potential customers.

While the most common type of market segmentation for business-to-consumer companies is demographic segmentation, the most common type of market segmentation for B2B companies is firmographics. Thus firmographics provide the best starting place when selecting a business market segment.

Both demographics and firmographics are facts. Firmographics provide facts about businesses that help to group them into target markets, just as demographics enable business-to-consumer businesses to select a consumer target market.

This article covers three broad categories of firmographics that provide numerous ways that you can select a specific business market segment to target. These include:

Selecting a Business Market Segment With Organizational Firmographics

Select a Business Market Segment by Financial Firmographics

Selecting a Business Market Segment With Industrial Firmographics

Select a Business Market Segment by Organizational Firmographics

Each business market segment differs by its size. Size includes the number of employees in the company, the number of stores, plants or branches it has, and the number of locations of these branches.

If the business is small with few employees and in only one location, the business owner probably makes most purchasing decisions. If the business is large with many employees and locations, an employee is most likely assigned purchasing. Thus, the size of the business reveals personal demographics that can enhance your B2B marketing and sales.

Each business market segment also differs by company age. Young businesses need different types of products and services than more established businesses. They usually have limited resources and less cash flow so they need vendors who will guide them in making good purchase decisions rather than just selling to them. By providing this service to new businesses, you can turn them into loyal customers.

The geographic location of a business market segment reveals regional characteristics that influence businesses. In addition, each location has different tax laws, regulations, and economic environments that make businesses different by location.

Knowing these organizational firmographics can help you to select the business market segment with the best long-term profit potential for your B2B business.

Selecting a Business Market Segment With Financial Firmographics

Financial firmographics include sales volume, profits and market share. They can help the B2B business owner to distinguish businesses by whether or not they have the financial means to buy a product or service. Financial firmographics also identify a business market segment that's sales volume demands more automated products.

For example, if you sell a machine that automates packaging products, it's more likely that businesses with large sales volume will purchase your machine than will smaller ones, whose small sales volume makes human packaging less expensive.

Ownership factors can also help you select the business market segment for your target market. You need to know whether the business leases or owns its office, plants, stores, warehouses, and equipment. By monitoring the relationship of ownership factors, you can determine relationships between these factors and the businesses needs and purchases.

By selecting a business market segment whose financial firmographics best match the benefits features and prices of what you sell, you can determine those businesses most likely to purchase your product or service.

Selecting a Business Market Segment With Industrial Firmographics

Industry provides another business market segment to help you determine your best target market. For example, businesses in information industries differ considerably from those in manufacturing and those in service industries. These differences make some businesses better potential customers than others and influence how, when, and why they will buy certain products.

Industrial firmographics influence not only a business' needs and desires, but also the kinds of customers they are.

Manufacturers differ in the equipment, components and supplies that are used in high-tech production compared to low-tech production. Their processes and facilities also differ.

Luxury market businesses need different production processes and buy different types of supplies than businesses who manufacture higher-volume, mass marketed products. Thus, one type will be a better potential customer for your B2B products than another.

A consultant is a business market segment in the information industry, but the consultant's business is very different from a major book publisher. Consultants' incomes are limited by how much they can charge for their time. Book publishers' incomes are limited only by the number of books they can publish and sell.

So knowing industrial firmographics of businesses, helps you to select those with industry characteristics that make them good potential customers.

Conclusions

You can improve your marketing and sales by gathering as much information as possible about each business market segment, and relating each to your past sales.

Thus, you should keep records of all contacts with present and potential business customers. Then categorize those records by business market segments so that statistics can reveal the best way to relate to a specific business market segment.

You will increase your changes of selecting a profitable target market for your B2B business if you use records and research to make business market segment selections.

About the Author

To discover more about marketing your B2B business, get Linda Morton's free report Marketing Your Small Business. You can also get her free report on Market Segmentation. This and other unique content 'business market segment' articles are available with free reprint rights.

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