B2B customer segmentation

Important considerations when segmenting business customers


Although customer segmentation certainly cannot be considered a new business practice by any means, the technique has experienced renewed levels of interest as newly introduced technologies have effectively made analyzing huge amounts of data a much quicker and easier task. Even though business-to-business (B2B) companies often times don't face quite the same avalanche of customer data as their business-to-consumer (B2C) counterparts, the process of partitioning business customers into groups with similar needs or characteristics continues to represent an important way to generate additional value for their customers. It's also not a bad way to gain a strategic edge over competitors that may be treating customers in a more "one size fits all" fashion.

The benefits for segmenting business customers traverse many functional domains within an enterprise, including both the demand side and the supply side. Because of the customer-facing nature of marketing and sales, those domains typically represent the early adopters of segmentation schemes to support both planning purposes and tactical operations. For instance, a marketing manager can dramatically improve a cross-sell campaign response rate when he or she knows exactly which customers have the highest propensity to purchase and understands which message or value propositions are most likely to resonate with the target audience. That manager can also make reasonable assumptions with respect to the greater market at large by using key insights from customer segmentation studies, putting these insights into action when it comes to designing new customer acquisition programs.

Zone=Data and analytics, Industries
ArticleTitle=B2B customer segmentation