Arguably the hardest part of B2B marketing is understanding the audience you serve. While, in FMCG (fast-moving consumer goods) marketing, companies will differentiate target customers using demographic, psychographic (behavioural characteristics) and neighbourhood segmentation approaches, it is not uncommon for tech companies in B2B to focus more on their product/ solution characteristics than on the unique fit between their offering and a clear set of target customer needs. This poor definition of the companies that can reap the most value from the product, is further complicated for marketers by the complex buying groups involved in most purchases, the members of which change throughout the buying process. Often the ultimate user of the product is not the purchaser and is just one voice amongst many, something which differentiates B2B from B2C marketing. Sometimes, identifying B2B customers can feel like trying to find the proverbial ‘needle in a haystack'.
Segmentation: understanding the ideal customer profile
In the twenty-plus years I have worked for B2B Tech companies, only once have I witnessed an attempt to define a clear market position and a clear target audience, supported by data. Even on that occasion the company was in its 30th year of business and was doing this mainly because so many things had changed that were previously taken for granted – particularly digital disruption!
In most cases, the software companies I have worked for believe they will be limiting the size of the market opportunity they are addressing by being too specific about who their target customers are – and, as targets increase 20%-plus every year, that they limit their ability to achieve them. While this thought process is understandable, it is also a recipe for a shotgun-approach to sales and marketing, spraying resources randomly across a broad area in the hope of hitting something worthwhile.
While for B2B products (I use this term broadly throughout to cover IT products, software, SaaS and services), there are advantages in a competitive strategy based on lowest cost or relative differentiation (see explanation here of Porter’s competition model shown below) for software-as-a-service (SaaS) providers these go-to-market models fail to communicate a clear unique sales proposition (USP) that will maximise their chances of closing business. A focused approach to defining the target market, based on clear segmentation provides a strategic focus for business investment, and provides a rallying point for cross-functional collaboration. This in turn ensures that the message Marketing is putting out is the same one customers hear from Sales and that what is sold is eventually successfully delivered by Professional Services and Engineering.Too often it is this internal lack of focus, crystallised by the brand definition, that undermines the end-to-end customer experience.
Identifying target segments and your ‘ideal customer profile’ go hand in hand. Your ideal customer profile identifies the characteristics of a target customer – characteristics that can be determined from internal or external data sources, either structured or unstructured data (more on this in a future blog) – that represent the best fit with your company’s value proposition.
Typical segmentation criteria in B2B include:
· Company size (revenue/ employee numbers)
· Industry (SIC or other broader categories)
· Location (postcode, region, country)
These can also be referred to as firmographics, since they relate to the target company, to differentiate them from demographics, relating to an individual. Individual characteristics are only relevant in relation to the buying group for your product and are part of developing ‘buyer personas’ (see next section).
In addition to firmographics, ‘intent’ data is now being used to identify when a target company may be in a buying cycle for your product. This data can be owned (1st party) like order intake data in your CRM, bought (2nd party) from a provider of company data or determined from a range of digital behaviour (3rd party) demonstrated by the company and its employees. This is not strictly segmentation, as it is dynamic, but it adds a layer of insight about the companies in your target segment(s) if you can connect the ‘data dots’. We’ll look at this in a later blog when we consider marketing enablement.
In this blog on brand and messaging I talk about personas in the context of getting the right message out and how this is influenced by your brand proposition on the one hand and the buyer’s journey on the other. Here I want to talk in more detail about getting that message to the right person, in the context of their role in the buying group and the buying stage.
B2B buying cycles are long and complex as represented in the chart below.
Thinking additionally about the buyer’s journey and how it moves through different stages, it is clear that multiple people need to be engaged with your company messaging and content at different times according to their role and influence in the buying process. This and future blogs will refer to the buying cycle using the SiriusDecisions (a brand of Forrester Research) framework as a reference point. This version also includes the suggested intentions of the customer at each stage and a typical sales response.
The complexity of identifying, targeting, influencing and engaging with the multiple personas that are involved in the typical B2B buying decision is quite clear. In this inbound-led world, the ability to engage in close to real time with the range of unknown personas who may be actively educating themselves and/ or searching for a solution to their problem of the type you offer is critical. The chance that they will make themselves known to you by completing a form, is a function of how well you understand their information needs and have created compelling content in a form that they are happy to consume. Combined with a contnet strategy and technology platforms that can serve the right content based on how those personas are engaging.
This strategy of: targeting chosen segments in the B2B buying journey based on their buying characteristics; being clear on the known (1st/ 2nd party data) vs unknown persona contacts (see earlier) that you need to target; and interpreting the value of digital body language ensures marketing tactics are aimed at the right person.
Getting the right message to the right person (at the right time) is a shorthand for what marketing tactics are all about. As we have seen here, the complexity of the B2B buyers’ journey in today’s digital world makes this a real marketing headache. We long for the days when we could talk face to face with buyers at the annual industry event! (Indeed, Sales often just want more events targeted at different buying personas – a ‘breakfast briefing’ or ‘executive dinner’ anyone?) The world has changed and B2B Techmarketing strategies have to change with it.