Segmentation as a Tool for Growth in B2B (Part 2 of 3): Do you Really Understand your Customers? – Milena Nazaruk
Posted by Milena Nazaruk
Segmentation is key to understanding and speaking with your customers. In my last blog, Segmentation as a Tool for Growth in B2B (Part 1 of 3): Why do Segmentation?, I discussed why you might need to take on segmentation work. Today, I want to focus on how to actually do segmentation. It’s important to consider that it’s often not about who your customers are from your point of view, because that is often a very small part of whom they really are. Instead, you need to know how they view themselves to be able to connect on their terms. Every client you have may operate in different industries with different priorities, business practices, communication styles, and needs of their vendors.
Here are some key ways to uncover who your customers really are and how you should relate to them.
1. Speak to your customers:
- Call them and ask about their business. It’s a great way to hear their perspectives on who they are, who their clients are, who they deal with, and what they need from their vendors or service providers. (Take a look at some benefits of qualitative data gathering).
- Survey them. Depending on your industry, you might want to conduct a survey to help identify segments and quantify buckets of opportunity. (Some tips for great surveys).
- There are different advantages to doing the research internally or working with external companies:
- Internal: Your customers may be excited that you care enough to reach out, and it may be a great marketing opportunity!
- External: You will often get more unbiased information. Many are willing to share more details – both good and bad – with someone external to the company. It is also beneficial to keep the survey anonymous to get better market-wide information and even competitive insights.
2. Speak to who they deal with:
- With client companies or individual clients, it’s important to understand who they deal with and how they are perceived by others. Who are their customers? Who do they partner with? What types of suppliers do they work with?
- This is a great way to understand your customers in the environment they deal with and what their preoccupations and challenges might be.
3. Look at your internal data:
- Take a look at what you already know about your customers. This should help identify any segments you may already know about. You can use proxies within your data to approximate which clients fit into which segments or to test hypotheses with different groups.
- You should look at trends in buying behaviour, purchasing patterns and cycles, product clusters, and geographic differences.
4. Conduct additional secondary research:
- It can also be useful to use secondary research to understand what the overall market looks like, allowing you to benchmark your current client base or further quantify opportunities.
Take a look at our latest white papers to understand how to do this well: Conversations with Purpose: Improving Decisions with the Power of Interview Research and Conversations with Purpose: Maximizing the Value of Interview Research. Doing segmentation is a lot of work, but having a 360 degree perspective on your customer is vital. You need to know who they are and how they want to be dealt with to maximize your opportunities. This will allow you to become a partner with your customer rather than just a service provider. Being viewed as an integral part in their process will not only grow their relationship with you, but also bring in other customers who want access to the same opportunities.
If you would like more information on customer segmentation, please call us at 416-598-4684 and ask to speak with Meredith Low.