While I had understood the concept in theory, I had not grasped its practical impact on a company\u2019s go-to-market strategy. As I dove deeper, I found that 80% of companies<\/a> that employ customer segmentation techniques report increased sales. I consulted many organizations on how their customer-facing teams \u2013 marketing, sales, and customer success \u2013 subdivide their customer base<\/a> based on like-minded attributes, personalize their outreach, and classify their common challenges for effective engagement.<\/p>\n In this post, I\u2019ll explore what customer segmentation is<\/a>, provide examples, and share actionable tips to help you integrate segmentation into your strategy and enhance your customer experience.<\/p>\n In this article:<\/strong><\/p>\n <\/a> <\/p>\n <\/strong><\/p>\n Understanding this critical strategy \u2014 and the demographic, psychographic, behavioral, and other attributes your organization collects \u2014 can drive your go-to-market strategy. After all, to effectively address their requests, you need a structured way to organize your customers into meaningful categories.<\/p>\n Segmentation not only organizes your customer base but also reveals actionable insights about how to effectively market and sell to various buyer personas<\/a> within those sub-segments.<\/p>\n While the concept of B2B customer segmentation is easy to grasp, applying it to your total addressable market<\/a> (TAM) can feel like a significant undertaking, especially when realizing the number of mediums companies use for customer engagement.<\/p>\n When applying B2B customer segmentation, start by aligning it with your ideal customer profile (ICP)<\/a>. This ensures that your segmentation reflects the characteristics of your TAM. Often referred to as B2B market segmentation, this strategy equips your marketing and sales teams with the insights they need to deliver tailored value to prospective customers.<\/p>\n Below, I\u2019ll explore five key methods for B2B market segmentation. For reference, you can use this comprehensive template<\/a> to apply this strategy.<\/p>\n <\/a> <\/p>\n Geographic segmentation divides customers based on their physical location, making it essential for companies with a global or multi-regional presence. It enables you to tailor marketing campaigns and sales strategies to cultural preferences, regional challenges, and localized needs.<\/p>\n Common geographic attributes include:<\/p>\n Pro tip:<\/strong> From a customer success perspective, geographic segmentation informs workforce planning as your business grows in specific regions<\/a>, ensuring consistent support and a superior customer experience. This also provides an up-to-date record of customer count by region, providing insight to plan for headcount and expand your team appropriately.<\/p>\n Firmographic segmentation focuses on objective attributes that define a company\u2019s profile. This method is particularly useful for businesses targeting diverse industries, as it enables teams to tailor their approach based on company size, revenue, or industry specifics.<\/p>\n Much of this information can be found online or through customer data platforms<\/a>.<\/p>\n Key firmographic attributes include:<\/p>\n Source<\/a><\/em><\/p>\n Pro tip:<\/strong> This type of segmentation works for customer success teams who specialize in supporting specific industries or company sizes, improving their ability to address unique needs effectively.<\/p>\n Psychographic segmentation delves into more subjective factors such as customer needs, aspirations, and attitudes. This is the other side of your customer\u2019s firmographic attributes. These insights are typically gathered through forms, surveys, events (online or in-person), and customer interactions.<\/p>\n Since this information varies based on the contact you are talking to at a company, it\u2019s best to identify the key stakeholders within companies and target them via social media, paid ads, and tailored content.<\/p>\n Attributes include:<\/p>\n Psychographic data provides a deeper understanding of stakeholders\u2019 mindsets, enabling customer success teams to tailor strategies for customer adoption and engagement. Moreover, this gives your go-to-market teams the ability to understand the mentality of your key stakeholders as they adopt your products and services.<\/p>\n Pro tip:<\/strong> Psychographic segmentation is especially valuable in the B2B space, where sales cycles tend to be long and involve multiple decision-makers.<\/p>\n Behavioral segmentation focuses on customers’ interactions with your brand, products, and services. By analyzing this data, you gain insights into customer priorities, product usage patterns, expansion opportunities, and renewals.<\/p>\n You can capture this through your CRM<\/a>, marketing automation platform, website content management system, and product app.<\/p>\n Behavioral attributes include:<\/p>\n Pro tip:<\/strong> This segmentation is vital for companies scaling products with multiple features. Furthermore, behavioral attributes can give your go-to-market and product teams insight into widely used areas of your product, potential pain points, and opportunities for upgrades or enhanced usage.<\/p>\n Technographic segmentation categorizes customers based on the tools and systems they use, offering a clear view of their technology stack<\/a>. For products that address many use cases, understanding what technologies your customers have is worth understanding to better serve them.<\/p>\n By understanding a customer\u2019s tech stack, sales and customer success teams can recommend specific solutions, forecast renewals, and personalize marketing campaigns. Technographic segmentation also provides opportunities to position your product against competitors in the customer\u2019s ecosystem.<\/p>\n Technographic attributes include:<\/p>\n Leveraging these broad categories, your teams can move from market-level insights to applicable customer segmentation strategies. This can drive meaningful engagement and deliver value at scale for your customers.<\/p>\n Pro tip:<\/strong> This method is particularly useful for businesses whose products integrate with or complement existing technologies.<\/p>\n Source<\/a><\/em><\/p>\n <\/a> <\/p>\n Below are examples of B2B customer segmentation, and how they are applied in customer success.<\/p>\n Tier-based segmentation aligns with account-based marketing<\/a> (ABM) principles, grouping customers based on firmographic, behavioral, and psychographic attributes to ultimately assess fit and interest. Your resulting ABM tiers inform strategies your customer success team can prioritize their resources and engagement.<\/p>\n Pro tip: <\/strong>Tier-based segmentation is ideal for organizations with a large number of customers, enabling resource optimization while maintaining meaningful engagement from your customer success team.<\/p>\n B2B customer segmentation by industry leverages firmographic data to address industry-specific needs, use cases, and challenges. Customer success teams are aligned by industry expertise, enhancing their ability to deliver tailored insights.<\/p>\n Benefits:<\/strong><\/p>\n Pro tip: <\/strong>Industry-based segmentation is particularly effective for companies targeting specific industries with tailored products and services. Furthermore, this can help your CSMs specialize and optimize the customer journey<\/a>.<\/p>\n B2B customer segmentation based on region or geography groups customers by location and preferred language, offering a dual-layered approach that aids in resource allocation and planning.<\/p>\n Key features:<\/strong><\/p>\n Pro tip: <\/strong>Region-based segmentation is critical for organizations expanding into new regions or scaling within existing markets. Companies who implement this segmentation model can build further layers based on the customer profile in that region, resource allocation, and growth trajectory in those regions.<\/p>\n B2B customer segmentation by company size or annual revenue focuses on firmographic attributes to address their unique needs as they scale.<\/p>\n Using these segmentation examples, your customer success team can provide tailored experiences for specific groups while driving operational efficiency. Whether based on tier, industry, region, or company size, effective B2B customer segmentation ensures that resources are allocated strategically, growth opportunities are maximized, and value is constantly delivered to your customers.<\/p>\n Pro tip: <\/strong>This type of segmentation is effective when you have a scalable product, and cater to businesses of varying sizes \u2013 employee size or annual revenue.<\/p>\n <\/a> <\/p>\n B2B customer segmentation requires successful organization, patience, and persistence. The upside is that it enables you to engage with your customers effectively, regardless of the size of your book of business.<\/p>\n Here are some tips to help you succeed.<\/p>\n To execute a viable B2B customer segmentation operation, data cleanliness is essential. Beyond that, your data must be integrated into the rest of your technology stack, monitored, and routinely refreshed.<\/p>\n The importance of maintaining clean and up-to-date data cannot be overstated.<\/strong> 91% of organizations reportedly face common data quality issues, according to Barley Laing<\/a> from Melissa. Furthermore, integrating your data across platforms ensures that all teams access the same insights, leading to 1.7x higher customer retention<\/a>.<\/p>\n This principle has been a core aspect of my experience consulting with various companies, regardless of size, region, or target market. Clean data fosters clarity in decision-making and empowers teams to measure the success of their segmentation strategies.<\/p>\n While the theory behind B2B customer segmentation is simple, collecting the data can be challenging, especially if your organization already struggles with poor data quality and consistency.<\/p>\n To resolve data gaps quickly, companies can take a multi-pronged approach through their customer success teams:<\/p>\n Identifying and addressing gaps effectively enhances your segmentation approach. Infoverity reports<\/a> that 88% of CDP users observe improvements in realizing customer upsells. This allows your customer success team to drive meaningful growth by applying data-driven insights.<\/p>\n While I outlined a few examples of B2B customer segmentation, it\u2019s crucial to create multiple layers of segments.<\/p>\n The average company uses 3.5 segmentation criteria<\/a>, combining various methods to form segments tailored to the company\u2019s unique needs, products, TAM, and growth objectives.<\/p>\n Many companies I\u2019ve worked with employ multi-layered B2B market segmentation strategies, such as segmenting by region, tiers, and annual revenue. This approach helps your company structure customer success teams to align with specific segments, providing a scalable foundation for future growth while ensuring support where needed.<\/p>\n In the B2B space, it\u2019s vital to consider the psychographic attributes of the entire organization, not just those of your point of contact. While your primary contacts may influence purchasing decisions, they might have the final authority or the leverage needed to champion your solution internally.<\/p>\n Your customer success strategy should involve multiple stakeholders, addressing their unique needs, interests, and challenges.<\/p>\n Engaging multiple stakeholders strengthens your segmentation strategy and helps maintain a comprehensive understanding of the overall customer experience. As Gartner notes, the typical buying process in B2B organizations involves an average of 7 stakeholders<\/a> for companies with 100-500 employees, underscoring the need for a well-rounded engagement approach.<\/p>\n Applying your B2B customer segmentation strategy in real-time engagements is crucial for assessing its effectiveness in meeting your company\u2019s business goals.<\/p>\n However, it\u2019s equally important to continually analyze and iterate on your segmentation approach to keep pace with the evolving customer landscape. By not having a feedback mechanism, 72% of companies fail to gather the data needed to assess their customer journeys<\/a>.<\/p>\n This iterative feedback loop is a practice I advocate for when consulting on segmentation strategies.<\/p>\n It allows organizations to see firsthand how segmentation impacts outcomes, enabling data-driven improvements in areas like:<\/p>\n Refining these areas allows companies to enhance both their internal processes and customer satisfaction.<\/p>\n![\"\u2192](\"https:\/\/no-cache.hubspot.com\/cta\/default\/53\/e83d6c8a-ba35-453b-b152-c92bbc81074a.png\")
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B2B Market Segmentation Methods<\/h2>\n
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<\/p>\nMethod 1: Geographic Segmentation<\/h3>\n
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Method 2: Firmographic Segmentation<\/h3>\n
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<\/p>\nMethod 3: Psychographic Segmentation<\/h3>\n
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Method 4: Behavioral Segmentation<\/h3>\n
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Method 5: Technographic Segmentation<\/h3>\n
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<\/a><\/p>\nExamples of Customer Segmentation<\/h2>\n
Tier-Based Segmentation<\/h3>\n
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<\/p>\nIndustry-Based Segmentation<\/h3>\n
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Region-Based Segmentation<\/h3>\n
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Company Size or Revenue-Based Segmentation<\/h3>\n
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Tips for Customer Segmentation<\/h2>\n
Tip #1: Ensure your data is clean, connected, and up-to-date.<\/h3>\n
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<\/p>\nTip #2: Identify data gaps for better segmentation.<\/h3>\n
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<\/p>\nTip #3: Create multiple customer segments.<\/h3>\n
Tip #4: Engage multiple stakeholders.<\/h3>\n
Tip #5: Use segmentation to optimize your customer journey.<\/h3>\n
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