The web is a powerful tool for direct marketing, but it isn’t a magic wand. The web generally makes things quicker and easier, but not necessarily better. An badly written marketing email will fail regardless of how easy it is to create and how cheap it is to send out By contrast, intelligent use of data reaps huge reward for the smart business.
So, fundamentally the web changes nothing. We still have to plan our marketing messages carefully, tailoring them depending on whether we are talking to the general public (“Business to Consumer” or “B2C”) or businesses people (“Business to Business” or “B2B”).
Within those two groups we need to subdivide if we are to be effective. This is what we call market segmentation. The methods of segmentation are different for B2B as opposed to B2C and that is what this article is about. By understanding the segmentation approaches which are appropriate to the markets we can create better performing marketing campaigns.
Some forms of segmentation are equally applicable to both B2B and B2C. Recency/frequency/value of previous sales is the obvious way of splitting an in-house mailing list, regardless of wether that list is business or consumer focused.
B2C marketers have many other ways to divide up their lists. This is because research tells us that similar people do similar things. So, if we know that certain people buy our products we would do well to find similar people and offer our products to them too.
Since people who live close to each other often lead similar lifestyles, we can segment a cold list by postcode. The ACORN classification system has been used by marketers to segment by postcode for decades. A real life example of this would be where a travel marketer who does well in St. Albans might choose to extend a campaign to include the town of Richmond upon Thames. Although not geographically close, both towns are in ACORN group 19 and therefore the people often behave in similar manners. Naturally this data changes over time so it is important to get up to date Acorn records when conducting a campaign.
Gender, age and number of children are pretty obvious segmentation vectors, but religious beliefs, political preferences and where people go on holiday are also powerful vectors. Obviously in a B2B setting, the holiday choice of a buyer is unlikely to be a relevant vector in the purchase decisions of a large business.
Slicing a market according to when people buy is also a good strategy. In B2B this can be particularly effective. Many compaies have their own accounting year and funds are more likely to be available at certain periods than at others. Knowing when these periods are for each potential customer can be the difference between success and failure. Sadly knowing the financial cycles of consumers as opposed to businesses is pretty much beyond most marketers, although seasonality in general should of course be factored in to marketing planning.