How to use B2B sales segmentation in 2023

As the SaaS business landscape becomes more competitive and unpredictable, B2B companies have to stay ahead of the game. However, to be successful, you don't only need a groundbreaking product. You also need to understand the customer needs, pain points, and priorities of your customer base.

This is because if you have the best product in the market, and you don't know how to approach your customers with it, seeing success will become incredibly difficult. That's where B2B sales segmentation enters the picture - a strategic move that can really turbocharge your sales.

Today, we will delve deeper into what B2B sales segmentation is, benefits of B2B market segmentation, and uncover the best tips for using B2B sales segmentation effectively. Keep reading.

What is Sales Segmentation and What are its Types?

At its core, sales segmentation is all about segmenting your target market into different groups based on specific criteria.

So, instead of using a one-size-fits-all approach for selling your products to all types of customers and target audience , B2B market segmentation allows you to tailor your sales efforts to each group's specific needs. The criteria for customers can range from industry, company size, where they're located, the number of employees, their purchase intent, whether they are decision-makers, their purchase decision, and their pain points.

Major types of B2B customer segmentation include the following:

• Firmographic Segmentation: Firmographic segmentation is a popular customer segmentation method for B2B companies, which classifies their customers according to certain company-related firmographic data, like industry, size, stage, employee count, revenue, and location.

• Demographic Segmentation: In this type of segmentation, we sort customers into cohorts based on their age, gender, income, education, and occupation. This includes personal information like names, email addresses, locations, employment histories, and skills. It gives you insights into your target audience's personal and geographical characteristics. It is a common type of B2C segmentation, however, some B2B businesses can also benefit from this data.

• Behavioral Segmentation: This type of segmentation is based on customer behaviors and actions performed on or within the product. It includes activities like viewing pricing pages, past purchases, frequency of purchases, brand loyalty, and how they interact with marketing materials.

• Technographic Segmentation: Technographic segmentation is about sorting B2B customers by their tech preferences and usage. It could be anything from the type of software, tools, and platforms they're using. It allows you to understand the technology landscape of your target audience and refine your selling strategies accordingly.

Importance of B2B Sales Segmentation

The importance of B2B sales segmentation can't be emphasized enough. With customers becoming ever more sophisticated and discerning, a tailored, customer-focused strategy is no longer a choice – it's a must if you want to succeed. Here are some of the reasons why B2B sales segmentation should be your top priority today.

1. Better Customer Understanding

With the help of B2B sales and customer segmentation, you can gain a more thorough insight into their individual issues, motivations, preferences, and buying process. With this extra understanding, you can tailor your marketing strategies to each section, making sure your marketing messages resonate with them more intimately.

2. It Helps You Gain A Competitive Advantage

It's essential to stand out from the competition in today's crowded market, and B2B sales segmentation helps you do it. By leveraging customer data in CRMs, firmographic data, demographics data, behavioral data, and offering tailored solutions to different segments, you can make your brand the go-to solution for your target audience in your industry.

3. B2B Sales Segmentation Boosts Your Sales Efficiency

Customer segmentation enables you to focus on the most profitable customer segments. You can make your sales process more efficient and ensure there are wasted efforts on leads that won't convert. This way, your sales team can improve their decision-making, and spend more time on B2B buyers with the most potential, increasing their productivity, and hitting their quota.

4. Improved Conversion Rates

With the help of sales and audience segmentation, you can tailor your sales tactics to the unique needs of your potential customers. This gives you a better chance of seeing a rise in conversion rates. Offering solutions that target their issues and provide real benefits will improve the odds of turning prospects into happy customers.

Top Seven Tips For Using B2B Sales Segmentation Effectively

Now that we get the significance of B2B sales segmentation let's jump into the top eight tips for using an efficient B2B sales segmentation strategy that drives actual results:

1. Stitch your disparate data sources

Stitch all user and account data across your first party data like product analytics, CRM, and billing with third-party enrichment from tools like Apollo, Clearbit, Zoominfo, and Slintel in order to segment across usage, role, demographics, and firmographics.

2. Set Clear Segment Criteria

Now, it’s essential to use all the data you collected to set up specific parameters for segmenting your B2B customers into different categories. These could be based on things like industry, company size, yearly income, where they're located, or what kind of buyer they are. But most importantly, measure indicators of product-usage that are highly correlated with specific outcomes that your sales and marketing teams care about.  Ensure these criteria are clear, relevant, and aligned with what you want to get out of this.

3. Segment Your Audience in Terms of Potential

It's important to know which segments show the highest propensity to convert or expand, so you can send them to your sales and account management teams to action on. Segment users based on product usage, billing, CRM, and third-party enrichment to find your champions, churn-risks, promising, and dormant users and accounts.

4. Leverage Behavioral AI

Here’s how companies like Canva and Vercel leverage behavioral AI to generate sales pipeline from their self-serve funnel using Toplyne:

• Step 1/7: Create monetization playbooks to surface conversion and expansion opportunities (leads most likely to convert to paying customers, and teams most likely to grow into larger teams)

• Step 2/7: Choose the right leads to target – users (individual users) or accounts (a group of users with an organization).

• Step 3/7: Select the frequency at which you would want leads synced in your GTM apps.

• Step 4/7: Define how many leads you want by either the number of leads or your expected win rate, depending on your sales capacity and GTM strategy.

• Step 5/7: Build custom segments - Build custom segments based on And/Or logic at the deepest level of sub-properties within your product analytics.

• Step 6/7: Validate your GTM strategy - Hold back some users as a control group to test your GTM strategy.

• Step 7/7: Sync your product qualified pipeline into your GTM destinations - CRMs, sales & marketing execution tools, and customer engagement platforms.

5. Craft Targeted Messaging for Different Segments

Once you've divided your audience, create a sales message that speaks to each segment's traits and issues. Steer clear of a generic approach and make sure your messaging is tailored to the specific problems faced by each group. This will enhance your SDR teams’ meeting booked, open, and reply rates.

For example, your sales and SDR teams should be personalizing their outreach based on your users’ and accounts’ activity within your product.

6. Use custom GTM channels for your segments

Different personas of users in your product may prefer different touchpoints. Developers are notoriously averse to e-mails from your sales teams, for example, and may prefer an in-app nudge instead. Across e-mail marketing tools like Outreach, Customer.io, Brevo, customer engagement tools like Braze, Appcues, etc., and CRMs like Hubspot, Salesforce, Pipedrive, etc., reach your users in the channel they prefer in order to convert/expand them.

7. Test, Measure, and Improve

Keep an eye on how your segmented sales and marketing activities are doing. Look at metrics like conversion rates, Net Revenue Retention (NRR), Meetings Booked Rate, Open Rates, and Reply Rates against control groups to validate the impact of your segmentation and GTM outreach.

Make the Most of Your B2B Sales Segmentation Today

Segmenting B2B sales can be a great way to build better relationships with clients and craft custom solutions that help everyone reach their goals. Doing your homework, setting clear standards, and using data analysis can help you build targeted segments that result in more tailored interactions, higher conversion rates, and better customer loyalty.

So, get ready to embrace the true potential of B2B sales segmentation and open the door to unparalleled success in your business ventures.