Target audiences are strategically identified groups of customers who are interested in a particular product or service. They are the foundation on which every business is based.
Research and experience show us that "blanket" advertising or marketing doesn't work: You can't sell everything to everyone. Without dividing your potential buyers into segmented groups, there is no sales growth.
In today's competitive landscape, many B2B companies are reviewing their strategies, and that often includes a more careful segmentation of target audiences—both to sell more accurately and to budget more efficiently for marketing.
Therefore, it's important to understand segmentation in more detail and learn how to best carry it out to ensure increased sales.
Mistakes That Lose Sales
Offering goods or services to those who don't need them is a waste of resources. If you use a broad audience, you're going by the "if you're lucky" method.
For example, everyone needs windows, but for B2B marketers that original broad target group ("everyone") can be divided into architects/designers, builders, DIY stores, distributors, and developers. One window could be used for resale, the other for noise insulation and energy saving, the third for interior decoration, and so on.
The value of the same product is different for each segment of your audience. A broad audience must be broken down into narrower groups for ads and messaging to work.
Personalized Communication Supposes Segmentation
Once a customer makes a decision to buy, the task of the marketer is to build personal communication with the potential client. The company that knows the client better... wins.
Sales representatives should be able to assign their clients to one of the defined segments by their basic attributes while avoiding the possibility of having one client falling into several segments simultaneously.
By segmenting, marketers can develop ads that consider the problems, needs, and expectations of each group. They can create proposals with a suitable product mix to meet the needs of a particular segment. And they can use special events, promotions, bonuses, and discounts based on the behavioral and emotional characteristics of your target audience.
The key value of segmentation is this: Representatives of a core target audience are more likely to buy your product or service. If you attempt to reach a wide audience, you spend all your time guessing what a person wants when you could be selling to them.
Parameters for Target-Audience Segmentation
When dividing a business audience into segments, you must take into account the region where the business is represented; its capabilities, service-level expectations, and product requirements; its motivation; and, of course, its decision makers.
Here are examples of possible segmentation criteria; using them could well help you to build scores of segments:
- Industry: niche and place in the market (raw materials, manufacturing, construction, retail, distribution, design, etc.)
- Geography: location and network size (local player, federal network, global, etc.)
- Price policy: low budget, high end/premium, or a mix of the two
- Product performance: product mix and services required to execute
- Business size: number of ongoing projects, sales volume, annual revenue
- Personnel qualification: expertise, experience
- Capabilities: methods of production/processing, automation systems, etc.
- Behavioral parameters: level of urgency and volume of purchase
- Buyer profile: supplier loyalty, risk assessment
- Procurement steps: selection criteria, motivation to purchase
- Purchasing committee: key decision makers
- Beliefs: stereotypes, doubts, objections
- History with company: new, current, or returning customer
- Cooperation with competitors
Much of that information can be found in public documents and online searches, whereas some stats are more subjective and rely on focus groups.